<\/p>\n
\n\tCoach continued to chug along in the first quarter, pushing Tapestry Inc. to a strong start for its fiscal year \u2014 which is building off big growth last year.<\/p>\n
\n\tNet income for the quarter ended Sept. 26 increased 30.9 percent to $360 million, or $1.76 a diluted share. Adjusted earnings tallied $1.82 per share \u2014 easily beating the $1.56 analysts forecast.<\/p>\n
\n\tSales rose 12 percent to $1.9 billion, excluding the impact of Stuart Weitzman, which was spun off to Caleres last year. That topped the $1.85 billion analysts forecast.<\/p>\n
\n\tCoach sales continued to leap, increasing 16 percent to $1.7 billion. Kate Spade, which is retrenching in order to grow back from a stronger base, was down 10 percent to $233 million for the quarter.<\/p>\n
\n\t\u201cWe\u2019re bringing new customers into our brand and into the category,\u201d crowed Joanne Crevoiserat, chief executive officer, in an interview with WWD. \u201cWe delivered revenue margin growth ahead of expectations and we saw strength of the world, including a beat in North America.<\/p>\n
\n\t\u201cWe\u2019re growing the market and we\u2019re growing,\u201d Crevoiserat said. \u201cAnd what\u2019s really notable is not just what we delivered, but it\u2019s really how we\u2019re delivering it. The capabilities and culture that we\u2019re building are durable competitive advantages and those are on display.\u201d<\/p>\n
\n\tTapestry has been building around what it\u2019s dubbed the \u201cAmplify growth strategy\u201d \u2014 a three-year plan that was laid out last year, although its revenue targets were hit in Year One.<\/p>\n
\n\tThe strategy is focused on four key tasks.<\/p>\n
Building emotional connections with consumers.<\/p>\n
Fueling fashion innovation.<\/p>\n
Delivering compelling experiences.<\/p>\n
And leaning into the power of the company\u2019s workforce.<\/p>\n
\n\tSuch strategies \u2014 whether they have three parts or five or more \u2014 are commonplace in the world of corporate fashion and tend to all sound very similar. But few plans produce the results Tapestry has enjoyed.<\/p>\n
\n\tThe company said it acquired 2.6 million new consumers during the quarter, 35 percent of them from Gen Z, while demand from existing customers rose.<\/p>\n
\n\tAverage unit retail prices on Coach handbags increased at low-double-digit rates in the quarter. Coach sales in North America, its largest market, rose 7 percent, backed up by 30 percent growth internationally.<\/p>\n
\n\t\u201cWe\u2019re driving our growth through our direct business, through new customer acquisition and through our core leather goods category,\u201d Crevoiserat said. \u201cWe\u2019re doing that in North America, comping the growth that we saw last year, and we\u2019re doing that around the world. And I do believe that the way that we\u2019re building growth at this scale is differentiated in the market.<\/p>\n
\n\t\u201cWe see an opportunity to welcome more customers into the category. It\u2019s a place where we have always played. Coach at its inception brought more customers into the category with high-quality leather goods, with high emotional resonance with the consumer and really grew the category. At the same time, it grew share. And we are continuing to do that.\u201d<\/p>\n
\n\tCrevoiserat said the idea is to \u201cearn the right\u201d to be Gen Z\u2019s \u201cfirst luxury bag purchase.\u201d<\/p>\n
\n\t\u201cIt is important to us that the value delivery is there,\u201d the CEO said. \u201cWe spend a lot of time getting to know these customers and understanding what\u2019s important to them, but we\u2019re also bringing the magic. This understanding and turning insight into impact through our teams.\u201d<\/p>\n
\n\tCoach racked up $6.9 billion in sales last year and Crevoiserat said the $10 billion mark \u201cis in our sights and I think there\u2019s even growth beyond.\u201d<\/p>\n
\n\tTapestry nudged up its outlook for the full year.<\/p>\n
\n\tRevenues are expected to rise 6 percent to 7 percent to $8.5 billion to $8.6 billion, moving the range up $100 million from the initial forecast.<\/p>\n
\n\tOn top of sales of nearly $8 billion last year, which represented a 17 percent expansion, adjusting for currency and Stuart Weitzman, this is a slower, but significant move higher.<\/p>\n
\n\t\u201cWhat you\u2019re seeing is compounding growth,\u201d Crevoiserat said. \u201cWe\u2019re delivering growth on top of the growth that we delivered last year. And our view is that our [total addressable market] is massive and we have an opportunity to continue to grow our share and grow our business in North America, our largest market, but also in international markets where we\u2019re relatively underpenetrated.\u201d<\/p>\n
#Tapestry #TPR #Earnings #Top #Estimates #Sales #Grow<\/p>\n","protected":false},"excerpt":{"rendered":"
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