X
<

Key Investor Takeaways from Tapestry’s 1Q18 Earnings

PART:
1 2 3 4
Part 2
Key Investor Takeaways from Tapestry’s 1Q18 Earnings PART 2 OF 4

Lower Coach Brand Sales Drive Tapestry’s 1Q18 Top-Line Miss

Tapestry’s 1Q18 top line misses expectations

Tapestry (TPR), formerly known as Coach, reported its first-quarter results on November 7. The company’s revenue rose 24% YoY or year-over-year to $1.29 billion. This improvement was mainly due to the integration of Kate Spade into the company’s business. Sales from Tapestry’s Coach brand, however, fell 3% YoY during the quarter. The company missed consensus expectations by $10 million.

Lower Coach Brand Sales Drive Tapestry’s 1Q18 Top-Line Miss

Interested in DTN? Don't miss the next report.

Receive e-mail alerts for new research on DTN

Success! You are now receiving e-mail alerts for new research. A temporary password for your new Market Realist account has been sent to your e-mail address.

Success! has been added to your Ticker Alerts.

Success! has been added to your Ticker Alerts. Subscriptions can be managed in your user profile.

What drove down Coach’s 1Q18 sales?

Coach brand sales were negatively impacted by natural disasters (hurricanes in North America and typhoons in Asia), inventory mix challenges, China’s calendar shift, and a stronger U.S. dollar during the quarter.

Coach’s North American sales fell modestly while growth in the international business remained flat on a reported basis. On a currency-neutral basis, international sales improved slightly, driven mainly by strength in Europe, Greater China, and Japan.

Global coach comparable-store sales fell 2% during the quarter, driven by a similar fall in North American comps. Europe and Mainland China, however, continued to post positive sales comps.

Kate Spade adds $269 million to Tapestry’s top line

Kate Spade sales totaled $269 million for the quarter. Compared with the pre-acquisition period, sales were down 4% YoY, reflecting Tapestry’s strategic decision of reducing wholesale disposition and flash sales for the brand.

Kate Spade’s global comparable store sales fell 9%, impacted mainly by the planned reduction in promotional sales online.

Stuart Weitzman posts 10% growth in sales

Stuart Weitzman’s 1Q18 net sales totaled $96 million, compared to $88 million in 1Q17. This 10% increase was driven by growth in wholesale channel sales and total direct sales.

Investors looking to invest in TPR through ETFs can choose to invest in the WisdomTree Dividend Ex-Financials Fund (DTN). Tapestry has a weight of approximately 1.1% in DTN.

Read the next part of this series for a view of the company’s margins and profitability in 1Q18.

X

Please select a profession that best describes you: