Overall, Tapestry’s net sales totalled US$1.32 billion for the third fiscal quarter against US$995 million in the prior year, up +33% on reported basis. Gross profit stood at US$909 million, while gross margin for the quarter was 68.7% compared with 70.9% in the corresponding quarter of 2017. Net income for the quarter was US$140 million. These results include the contribution of the Kate Spade brand, acquired by the Group on July 11, 2017.
On a reported basis, net sales for the Coach brand totalled US$969 million for the third fiscal quarter, up +6% from US$915 million in the prior year. Global comparable store sales rose +3%, including a benefit of approximately 100 basis points driven by an increase in global e-commerce, according to Tapestry. The brand’s solid performance is said to have been driven by the North American market.
Global comparable store sales for premium leather handbags brand Kate Spade declined -9%, with net sales totalling US$269 million in the period, “reflecting, in part, the strategic pullback in wholesale disposition and online flash sales, partially offset by the consolidation of the joint ventures for Mainland China, Hong Kong, Macau and Taiwan.”
Hit by production delays, the Stuart Weitzman brand recorded total net sales of US$84 million, against US$80 million reported in the same period of the prior year (+5%). Victor Luis, CEO, Tapestry, said the results were “negatively impacted by execution issues including production delays and lower sell-through of key carryover styles, which pressured sales and margins”, adding that some of these issues are expected to continue through the next season.
Tapestry said it expects sales for fiscal 2018 to increase about 30%, with the Kate Spade acquisition adding over US$1.2 billion in sales.