Tapestry shares jump premarket after narrower-than-expected loss and sales beat

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Tapestry Inc. shares jumped 2.9% in premarket trade Thursday, after the parent of the Coach, Kate Spade and Stuart Weitzman brands posted a smaller-than-expected loss and better-than-expected sales for its fiscal fourth quarter. The company swung to a loss of $294 million, or $1.06 a share, in the quarter to June 27, after income of $149 million, or 51 cents a share, in the year-earlier period. The company’s adjusted per-share loss came to 25 cents, better than the 56 cents loss per share consensus of FactSet analysts. Sales fell to $715 million from $1.51 billion, but were also ahead of the $670 million FactSet consensus. “While the backdrop remains volatile, it has not changed our long-term objectives,” Interim CEO Joanne Crevoiserat said in a statement. “Rather, it has been a catalyst to accelerate our strategic agenda. Through our Acceleration Program, we are transforming into a world-class consumer centric organization that is more agile and data-driven with a digital-first mindset.” The company returned to positive growth in Mainland China in the quarter and reopened the majority of its directly owned stores. It ended the quarter with $1.4 billion in cash, including $700 million from a revolving credit facility. The company expects to return to topline growth in the second half of fiscal 2021 and to achieve bottom line growth in fiscal 2021, 2022 and 2023. Shares have fallen 42% in the year to date, while the S&P 500 as gained 4.6%.
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