Coach parent Tapestry tops earnings estimates, shares jump 4.7% premarket

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Tapestry Inc. shares rose 4.7% in premarket trade Thursday, after the parent of the Coach, Kate Spade and Stuart Weitzman brands posted better-than-expected earnings for its fiscal first quarter, despite the “unprecedented and challenging backdrop” of the pandemic. Tapestry said it had net income of $231.7 million, or 83 cents a share, in the quarter to Sept. 26, up from $20 million, or 7 cents a share, in the year-earlier period. Adjusted per-share earnings came to 58 cents, well ahead of the 22 cents FactSet consensus. Sales fell to $1.17 billion from $1.36 billion, but were ahead of the FactSet consensus of $1.07 billion. “We drove a meaningful sequential improvement in topline trends, supported by strength in Digital and China,” Chief Executive Joanne Crevoiserat said in a statement. “At the same time, we expanded gross margin by deliberately reducing promotional activity and raising AUR, while also tightly controlling SG&A expense.” Sales at Coach fell 9% to $875 million, sales at Kate Spade fell 21% to $240 million, while sales at Stuart Weitzman fell 35% to $56 million. The company is not offering guidance because of the uncertainty caused by the pandemic. Shares have fallen 21% in the year to date, while the S&P 500 has gained 1.3%.
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