Tapestry raises annual profit forecast on Coach brand strength

Tapestry Inc. raised its full-year profit forecast on Tuesday, citing sustained demand for its Coach brand, which has successfully drawn younger shoppers to its accessible luxury products.

The parent company of Coach, Kate Spade, and Stuart Weitzman now expects adjusted earnings per share of $3.20 to $3.30 for the fiscal year ending June 30, up from its prior guidance of $3.00 to $3.10. The upward revision reflects stronger-than-anticipated sales momentum, particularly in North America and Asia, where Coach’s accessible price points and trend-driven designs have resonated with millennial and Gen Z consumers.

Analysts had projected adjusted EPS of $3.15, according to a Refinitiv consensus. Tapestry’s shares rose 3.2% in premarket trading following the announcement.

The company reported adjusted EPS of $2.86 in the third quarter, beating estimates of $2.72, as revenue increased 10% year-over-year to $1.74 billion. Coach’s same-store sales grew 11% globally, outpacing Kate Spade’s 2% decline and Stuart Weitzman’s flat performance.

Tapestry’s Chief Executive Officer Joanne Crevoiserat attributed the performance to Coach’s strategy of balancing affordability with aspirational appeal. ‘Coach’s ability to connect with younger demographics while maintaining its core luxury positioning has been a key driver of growth,’ she said in a statement.

The company also reaffirmed its full-year revenue guidance of $6.5 billion to $6.7 billion, though it cautioned that macroeconomic uncertainties, including inflation and shifting consumer spending patterns, could impact near-term performance.

Tapestry’s shares closed at $42.10 on Monday, up 1.8% for the year to date.