Coach-Owner Tapestry Falls Short of Earnings Expectations in Fiscal Q4

Following several positive earnings reports, Tapestry Inc.’s fiscal fourth-quarter numbers fell short of analysts’ expectations, as lowering consumer demand in North America and a disadvantageous currency exchange rate affected the company’s overall outcome. The conglomerate, which owns Coach, Kate Spade and Stuart Weitzman, also forecasts that its fiscal 2024 figures will tally below expectations.

In fiscal Q4, Tapestry reported sales of $1.62 billion USD, down from last year’s $1.625 billion USD and even further behind Wall Street’s estimate of $1.653 billion USD. By brand, revenues for Kate Spade fell by 10% to $309.5 million USD, and Stuart Weitzman’s sales dropped by 13% to $62.6 million USD. Coach, however, managed to secure a 5% increase in sales, reaching a total of $1.25 billion USD.

Despite Tapestry’s mostly-lowered numbers, the company did achieve a 50% increase in sales in Greater China and Japan in the fourth quarter. Additionally, the company saw direct-to-consumer sales grow by 2%.

Across the year, Coach’s revenues increased by 1% to $4.96 billion USD; while Kate Spade’s sales fell by 2% to $1.42 billion USD, and Stuart Weitzman’s revenues declined by 11% to $317.7 million USD.

Looking ahead, Tapestry forecasts adjusted earnings in the range of $4.10 USD and $4.15 USD per share in fiscal 2024, marking a decrease from analysts’ estimates of $4.24 USD. Further, the company expects to rake in net profits of approximately $6.9 billion USD across the year, which is also down from industry forecasts of $6.93 billion USD.

The results come one week after Tapestry announced that it would officially purchase Capri Holdings, owner of Versace, Jimmy Choo and Michael Kors, in a deal valued at approximately $8.5 billion USD. The acquisition is expected to close in 2024.

See Tapestry’s full fiscal 2023 Q4 financial report here.

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