Coach parent Tapestry’s earnings and guidance fall short of consensus

The FactSet consensus was for EPS of 97 cents and sales of $1.653 billion.

Chief Executive Joanne Crevoiserat highlighted the Capri deal in the earnings release and reiterated that it would be immediately accretive to adjusted earnings.

“By bringing together six iconic brands with a heritage in design and craftsmanship, and leveraging our modern consumer engagement platform, we will drive greater innovation, consumer connectivity, and cultural relevance, creating superior value for our consumers, employees, communities, and shareholders around the world,” she said.

Capri is also parent to Versace and Jimmy Choo.

See also: Tapestry’s bond spreads widen on news of mostly debt-funded deal to buy Michael Kors parent

Tapestry said revenue grew at its international markets in fiscal 2023 including China, despite COVID-related pressures in the first half. U.S. revenue fell 2% in the year, however, and was down 8% in the fourth quarter, weighed down by softer consumer demand in the inflationary environment.

Direct-to-consumer revenue was up 3% in the fiscal year on a constant currency basis, led by a mid-single-digit increase in stores.

Digital sales represented almost 30% of revenue in the fourth quarter, or about three times more than prepandemic levels.

The company is now expecting fiscal 2024 EPS of $4.10 to $4.15 and for revenue to approach $6.9 billion. The FactSet consensus is for EPS of $4.22 and revenue of $6.9 billion.

The stock has fallen 10% in the year to date, while the S&P 500
SPX,
-0.06%
has gained 15%.