Tapestry Inc. shares declined 6% in premarket trading on Thursday after the parent company of luxury brands Coach and Kate Spade reported a quarterly earnings miss and lowered its full-year guidance.
The New York-based group posted adjusted earnings per share of $1.02 for the quarter ended June 30, below the $1.10 forecast by analysts polled by Refinitiv. Revenue totaled $1.65 billion, missing the $1.67 billion estimate. Same-store sales, a key metric for retail performance, fell 2% year-over-year.
Tapestry also revised its full-year outlook, projecting adjusted earnings per share in the range of $4.20 to $4.30, down from its prior guidance of $4.40 to $4.55. The company cited weaker-than-expected consumer demand, particularly in North America and China, as the primary driver for the downward adjustment.
Chief Executive Officer Joanne Crevoiserat stated that while the company remains committed to its long-term strategy, near-term challenges in discretionary spending are impacting performance. "Consumer sentiment remains cautious, and we are seeing a more pronounced slowdown in key markets," Crevoiserat said in a statement.
The guidance cut follows a series of lackluster earnings reports from major U.S. retailers, including Macy’s and Nordstrom, which have also flagged concerns over consumer spending trends. Analysts at Jefferies downgraded Tapestry’s stock to Hold from Buy, citing the weaker outlook and potential margin pressures.
Tapestry’s shares have declined 12% over the past three months, underperforming the S&P 500’s 4% gain in the same period. The stock was trading at $42.10 in premarket deals, down from Wednesday’s close of $44.80.
Investors will be watching closely for signs of stabilization in consumer spending as Tapestry navigates a challenging retail environment.
