Tapestry beats Capri. At least during the last quarter of 2022. Yet Ralph Lauren too recorded great results, as far as US competitors go. Tapestry’s products (perceived as more interesting for younger generations) and the lower dependance on large US malls are, according to market analysts, the two factors that allowed the group that owns Coach, Kate Spade and Stuart Weitzman to obtain better results compared to its main local competitor (Versace, Jimmy Choo and Michael Kors).
Why Tapestry’s quarter outperforms Capri
“Coach is a very strong brand when we talk about the product”, states Jessica Ramirez, senior analyst of Jane Hali & Associates to Reuters, also adding that Tapestry offers products that are more interesting for you consumers, compared to Capri’s brands. Tapestry claims that nearly half of its new 2.6 million North American clients are Gen Z and Millennials. Tapestry, say analysts, is also less dependent on US malls because it places more focus on the retail channel. Another pain point for Capri is the increase in prices enacted by Michael Kors. Prices went up, on average, by nearly 25% ever since the company started touching up the price list in 2019, said Capri’s president John idol. As of lately, these prices weren’t welcomed by Michael Kors’ clients, and as a consequence the luxury brand decided to suspend them.
Tapestry beat Capri because from October to December, even though its revenue dropped by 5% (for 2.03 billion USD), earnings per shares were 1.36 USD, higher than the 1.27 USD estimated by analysts. Estimates for the entire fiscal year have now been increased from 3.60-3.70 to 3.70 to 3.75 USD EPS.
Ralph Lauren beat Wall Street’s expectations for the October-December quarter. Revenue was up 1% to 1.83 billion USD, while analysts had forecasted 1.76 billion (according to Refinitiv IBES / Reuters). The company stated that its brands have gained market shares in North America. Moreover, speaking with analysts and contrary to what claimed by Kors, Ralph Lauren’s CEO Patrice Louvet, assured that the brand will continue to increase its average retail prices even if at a more moderate pace (compared to the last two years), according to Bloomberg. That’s because the 10% increase applied in the last quarter of 2022 didn’t discourage customers, said Louvet.