Tapestry ups full-year guidance, shares jump

Luxury handbag firm Tapestry reported a jump in first-quarter revenues as it upped full-year guidance on Thursday, despite persistent supply chain issues.

The US owner of Coach, Kate Spade and Stuart Weitzman reported net sales of $1.48bn in the three months to 2 October, up 26% year-on-year and ahead of analyst expectations for $1.44bn. Operating income rose to £295m from £202.2m.

Sales of Coach where ahead 15% year-on-year, at $1.1bn, while Kate Spade eased 2% to $299.5m and Stuart Weitzman declined 23% to $66.5m.

Chief executive Joanne Crevoiserat said: "We delivered another quarter of solid performance, reflecting strong customer engagement and increased demand for our brands. Importantly, revenue trends accelerated compared to pre-pandemic levels, driven by North America, as well as continued growth in digital and China, two key drivers of long-term opportunity.

"While supply chain challenges persist due to the global pandemic, we’re remaining agile and taking deliberate actions to meet growing consumer demand."

Kate Spade and Coach source a portion of their handbags from Asia. However, Crevoiserat confirmed Tapestry was lifting its revenue and earnings per share outlook for the full year, despite supply chain issues, "reflecting our first-quarter performance and strong underlying business trends".

Full-year revenues are now expected to be close to $6.6bn, compared to previous guidance for $6.4bn. Earnings per diluted share are expected to come in between $3.45 and $3.50, up on a previous forecast for between $3.30 and $3.35.

The firm also announced on Thursday a $1bn share buyback programme.

Shares in New York-listed Tapestry rose 5% in pre-market trading.