Tapestry’s (NYSE: TPR) Q3 earnings surpassed market expectations, while revenue fell short of the estimates. Shares of Tapestry soared about 15% in the pre-market trading hours due to the earnings beat and the company’s announcement of $1 billion share repurchase plan. Tapestry reported earnings of $0.42 per share on revenue of $1.33 billion. Analysts had expected the company to post earnings of $0.41 per share on revenue of $1.34 billion.
Commenting on the $1 billion stock buyback plan, CEO Victor Luis said, “We’re also excited to announce the approval of a $1 billion share repurchase authorization, demonstrating our confidence in driving long-term, sustainable growth and value.”
On a GAAP basis, Tapestry’s net income decreased to $117.4 million or $0.40 per share in Q3 from income of $140.3 million or $0.48 per share in the prior year quarter. On a constant currency basis, sales from Coach, Kate Spade and Stuart Weitzman brands, increased 1%, 5% and 4%, respectively. On a reported basis, Coach sales was down slightly, while Kate Spade and Stuart Weltzman rose 4% and 2%, respectively.
Tapestry expects to deliver positive comps at both Coach and Kate Spade along with profitability improvements at Stuart Weitzman, both in the fourth fiscal quarter and in the years ahead. The company maintained its EPS guidance for fiscal 2019 and outlook for double-digit operating income and EPS growth in fiscal 2020.
The New York-based retailer expects fiscal 2019 revenues to increase at a low-to-mid-single-digit rate from fiscal 2018. Non-GAAP earnings per share is expected to be in the range of $2.55 to $2.60.
Tapestry stock, which plunged to a 52-week low ($30.05) last month, had declined 9% since the beginning of this year and dropped 32% in the past 52 weeks.