During September and October, the company completed the buybacks of the Kate Spade operations in Singapore, Malaysia and Australia, as well as the Stuart Weitzman business in Southern China. The company said its plans to acquire the Stuart Weitzman business in Australia from its distribution partner should close next summer.
For the three months ended Sept. 29, the company said net income was $122.3 million, or 42 cents a diluted share, versus a net loss of $17.7 million, or 6 cents, a year ago. On an adjusted basis, earnings per share for the quarter was 48 cents, compared with EPS of 42 cents a year ago. Net sales rose 7.2 percent to $1.38 billion from $1.29 billion.
Wall Street was expecting adjusted EPS of 45 cents on sales of $1.35 billion.
Victor Luis, chief executive officer of Tapestry, said, “At the one-year anniversary of establishing Tapestry as our new corporate identity, our results continue to reflect the benefits of our diversified, multibrand model.”
The ceo said there was continued growth at its Coach brand, where comparable-store sales rose 4 percent. Its Kate Spade brand contributed to the company’s overall performance, with Luis noting, “We were delighted by the very positive editorial and trade reception to creative director Nicola Glass’ inaugural collection presented at the brand’s spring 2019 New York Fashion Week runway show in September.” Luis added that the company anticipates a return to positive comps for the brand in the “second half of the fiscal year when the full collection launches globally.” At the Stuart Weitzman brand, Luis noted that there were still some development and delivery delays impacting sales and margins, but added that production levels and shipments have now stabilized. “As a result, we remain on track to achieve profitable sales growth in the holiday quarter,” he said.
The company guided fiscal year 2019 EPS to $2.75 to $2.80, up from the prior range of $2.70 to $2.80.