Benefitting from a strong performance by Coach and the recently acquired Kate Spade brands, sales climbed 31% to $1.48 billion.
“Kate Spade fourth quarter results exceeded our expectations from both a top- and bottom-line perspective with both sales and operating margin increasing from reported prior year results. In its first year within Tapestry, Kate Spade delivered double-digit earnings per share accretion, despite the strategic pullback in online flash and wholesale disposition,” said Tapestry CEO Victor Luis.
The luxury apparel retailer said its adjusted earnings jumped 21% annually to $0.60 per share in the June quarter
Sales of Coach, Tapestry’s biggest brand, grew 5%, with global comparable store sales gaining about 2%. Kate Spade sales were $312 million. Meanwhile, sales of Stuart Weitzman declined 17%, hurt by continuing execution problems such as delivery delays.
The management said its primary focus in the future will be on execution and strategic investments to support the long-term goals of double-digit operating income and earnings growth by 2020. Kate Spade will undergo a revamp next year when the brand will be expanded to global markets, mainly China, and the Creative Director Nicola Glass’s new collection will be launched.
During the quarter, Tapestry declared a quarterly cash dividend of $0.3375 per share, which is payable on October 1, 2018, to shareholders of record on September 7, 2018.
For the whole of 2019, the company expects revenues to grow at a mid-single-digit rate to between $6.1 billion and $6.2 billion. The forecast for earnings per share is in the range of $2.70 to $2.80.
Tapestry shares gained about 7% since the beginning of the year, all along witnessing significant volatility. The stock gained about 10% in early trading Tuesday following the announcement.