Thanks to the strong growth in its core brand Coach, the American fashion group Tapestry Inc. was able to present surprisingly strong results for the second quarter of the 2024/25 financial year on Thursday. In view of the positive development, the company increased its annual forecasts.
In the second quarter, which ended on December 28th, the group turnover reached a height of almost $ 2.20 billion (2.12 billion euros). This corresponded to an increase of five percent (currency -adjusted +5 percent) compared to the same period in the previous year.
The group benefits from strong growth in the core brand Coach
The growth driver was the label Coach, whose revenues increased by eleven percent (currency-adjusted +10 percent) to $ 1.71 billion. The clear plus was enough to drop in the smaller group brands more than to make up. Kate Spade’s turnover fell by ten percent (currency -adjusted -10 percent) to $ 416.4 million, Stuart Weitzman’s revenue shrank by 15 percent (disabilities -16 percent) to $ 69.7 million.
Thanks to a higher gross margin, the operating result rose by ten percent to $ 492.8 million. Due to the repayment of a loan that the group had accepted for the now failed takeover of competitor Capri Holdings, the proof of net profit decreased by four percent to $ 310.4 million (299.5 million euros). Adjusted for special effects, the quarterly surplus rose by 19 percent to $ 450 million.
Management sets higher goals for the current year
The current figures prompted management to raise the annual forecasts. In sales, growth is now expected by about three percent to $ 6.85 billion. Previously, only an increase of one to two percent was promised to $ 6.75 billion.
The goal for the diluted profit per share, which had been adjusted for special effects, which had previously been $ 4.50 to $ 4.55, has been increased to $ 4.85 to $ 4.95. That would mean growth by 13 to 14 percent compared to the previous year.