“We are rather disappointed”: Tapestry’s quarterly revenues below expectations (+1%), while Kate Spade gasps

Tapestry has been growing, very little though, in the second quarter, which ended on 29 December 2018. “Such performance did not live up to our expectations, in view of a macroeconomic and geopolitical scenario which is getting more and more volatile”, sharply remarked Victor Luis, chief executive officer of the US group, while openly disclosing his disappointment. The group’s net sales amounted to 1.80 billion dollars, therefore increasing by 1% at current rates of exchange and by 2% at fixed currency rates. Operating profits amounted to 381 million dollars, therefore decreasing compared to the previous year: in the same period, they had reached 346 million dollars. Likewise, the business trend of the portfolio’s brands was quite flat, except for Kate Spade, who negatively lost some ground. More specifically, Coach’s turnover reached 1.25 billion dollars (+2% at fixed rates of exchange), while Kate Spade’s revenues amounted to 428 million dollars (-1%). As for Stuart Weitzman, the brand gained 124 million dollars, therefore increasing its earnings by 3% at current rates of exchange and by 4% at fixed currency rates. Looking ahead, the American group expects 2019 revenues to rise by 1% only. Kate Spade is mostly watched by CEO Victor Luis: “Sales in comparable stores went below our expectations, as they were jeopardized by the lack of distinctive innovation in the final collections made by the previous team of designers”. In contrast, he is happy about Stuart Weitzman: “We achieved our goal, as our business expansion is gearing up again”. Overall, in the first six months of the year Tapestry’s sales augmented by 4%: “We would like to emphasize that we are still confident about our long-term road map, whose aim is to get back to operating incomes in double figures and profits, through a progressive increase in the dilution of stocks, in 2020 financial year”, wrapped up Tapestry chief executive officer.

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