Tapestry posts flat earnings, marginal rise in Q2 net sales

For its second quarter to December 29, 2018, Tapestry, Inc. recorded net sales of 1.80 billion dollars, an increase of 1 percent on a reported basis and 2 percent in constant currency. Net income for the quarter was 255 million dollars on a reported basis, with earnings per diluted share of 88 cents compared to 63 million dollars with earnings per diluted share of 22 cents in the prior year period. On a non-GAAP basis, net income for the quarter was 310 million dollars, with earnings per diluted share of 1.07 dollars compared to 306 million dollars with earnings per diluted share of 1.07 dollars in the prior year period.

Commenting on the results, Victor Luis, Chief Executive Officer of Tapestry, Inc., said in a statement: “During the second quarter, our sales and gross profit rose, successfully anniversarying the strong holiday results of the prior year. That said, this performance fell short of our expectations in the face of an increasingly volatile macroeconomic and geopolitical backdrop.”

Review of Coach, Kate Spade and Stuart Weitzman results

Net sales for Coach were 1.25 billion dollars compared to 1.23 billion dollars in the prior year, an increase of 2 percent on a reported and constant currency basis. Global comparable store sales increased 1 percent, including a benefit of approximately 100 basis points driven by an increase in global e-commerce.

Net sales for Kate Spade were 428 million dollars for the quarter compared to 435 million dollars in the prior year, a decrease of 1 percent on a reported and constant currency basis. Global comparable store sales declined 11 percent, including the positive impact of approximately 200 basis points from global e-commerce.

Net sales for Stuart Weitzman totalled 124 million dollars for the quarter, an increase of 3 percent on a reported basis and 4 percent in constant currency.

Tapestry updates full year outlook

The company expects revenues for fiscal 2019 to increase at a low-to-mid-single-digit rate from fiscal 2018. In addition, the company projects earnings per diluted share in the range of 2.55 dollars to 2.60 dollars.

“In light of our second quarter results and the uncertain global environment, we are updating our outlook for the balance of the fiscal year revising our adjusted earnings per diluted share outlook for FY19,” added Luis.

Picture:Coach via Business Wire