Tapestry’s stock tumbled after missing analyst’s expectations in its most recent quarter.
The fashion house, home to Coach, Kate Spade and Stuart Weitzman, reported fourth-quarter and year-end results for fiscal year 2019 Thursday before the bell, improving on top-line sales at all three brands. But that wasn’t enough to deter investor fears — nor were the smaller-than-expected income figures — which sent shares down more than 8 percent during pre-market trading Thursday morning.
Net sales for the three-month period ending June 29 were up to $1.51 billion, compared with $1.48 billion the year before. But income for the quarter was $149 million, down from $212 million the prior year.
“Fiscal 2019 was a year of meaningful evolution for Tapestry,” Victor Luis, chief executive officer of Tapestry, said in a statement. “We experienced ongoing strength in our business internationally, while navigating a volatile backdrop in North America. Importantly, we made significant progress on our strategic initiatives, most notably building the foundation of our distinctive multibrand platform. We generated the anticipated synergies from the successful integration of Kate Spade into our portfolio, which funded, in part, material investments in systems as well as our international development through distributor acquisitions and new store openings in key regions. We also made key additions to Tapestry’s leadership team. Taken together, we believe these actions will underpin our near and long-term growth objectives.
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“Most broadly, we remain steadfast in our strategic vision and focused on maximizing the benefits of our global, multibrand platform, while continuing to drive strength in our core Coach brand,” Luis added.
The company also repurchased 3.4 million worth of common stock during the quarter for approximately $100 million.
Luis added that Tapestry will hold back on opening a number of new stores.
“Looking ahead, we are revising our outlook for fiscal 2020 to reflect the current trends in our business, notably at Kate Spade,” he said. “We believe this is prudent, particularly in light of the uncertain environment in North America, and as we build the brand’s global awareness. That said, we understand it’s critical to act swiftly and decisively, applying our learnings, to drive positive change.”
Tapestry’s stock, which closed down 6.4 percent Wednesday to $25, is down more than 51 percent year-over-year.