Tapestry on Thursday raised its annual sales forecast after reporting better-than-expected second-quarter revenue, driven by strong demand for its pricey Tabby bags and suede boots in North America and China.
Shares of the New York-based company rose nearly 8% in trading before the bell.
Tapestry’s Coach brand is seeing strong demand for its Tabby crossbody bags and Coachtopia leather handbags from young shoppers given their immense popularity on social media sites.
In contrast, rival Michael Kors‘ Capri gave a weak forecast a day earlier as its grapples with a turnaround plan after a failed $8.5 billion merger with Tapestry last year.
Tapestry posted net sales of $2.20 billion for the quarter ended December 28, compared with analysts’ estimates of $2.11 billion, according to data compiled by LSEG.
The company now expects revenue of about $6.85 billion for the fiscal year 2025, compared with its prior target of more than $6.75 billion. Analysts on average estimated revenue of 6.76 billion, according to data compiled by LSEG.
Under Armour on Thursday raised its annual profit forecast again after topping quarterly results, as the sportswear maker reaps the benefits of dialing down on discounts and a recovery in demand in North America and Asia.
Reuters
Since returning as CEO in April, founder Kevin Plank has kept a tight leash on inventory of some products, pushed for fewer promotions and slashed its workforce.
Under Armour also introduced products such as Phantom Fore Golf shoes to fend off competition from newer brands including Roger Federer-backed On and Deckers Outdoor’s, opens new tab Hoka.
“Although the goal of resetting the brand to a more premium positioning while narrowing the focus to core fundamentals could prove to be a meaningful catalyst over the longer term, we believe it will take time to unfold,” said Sharon Zackfia, analyst with William Blair.
Under Armour expects annual adjusted earnings per share to be between 28 cents and 30 cents, compared with its prior forecast of 24 cents to 27 cents.
Shares of the company rose as much as 5% at $8.65.
Revenue in Under Armour’s North America segment, a major revenue contributor, fell 8% in the third quarter, after declining 13% in the prior quarter and 12% in the same period a year earlier.
In contrast, Nike, opens new tab in December forecast muted sales as the company scrambles to regain market dominance.
Meanwhile, Baltimore, Maryland-based Under Armour said the latest U.S. tariffs were not expected to have a significant impact.
It said about 3% of its goods imported into the U.S. come from China, and even less from Mexico. It has no manufacturing relationships in Canada.
Under Armour’s quarterly gross margins expanded by 240 basis points to 47.5%, with some support from lower raw material and freight costs.
Revenue fell 5.7% to $1.40 billion in the quarter ended Dec. 31, compared with analysts’ estimates of $1.34 billion, as per data compiled by LSEG.
Adjusted earnings per share of 8 cents, beat estimates of 4 cents.
Canada Goose Holdings trimmed its annual profit forecast and missed quarterly revenue estimates on Thursday due to choppy sales in key luxury goods market China, sending its U.S.-listed shares down 6% in premarket trading.
Canada Goose
Weak consumer spending in China, which is grappling with youth unemployment and a property crisis, has been a major concern for the luxury goods industry and has slowed demand recovery in the region, significantly impacting brands such as Canada Goose.
U.S. luxury retailer Estee Lauder, which bet on China, expanded a restructuring plan on Tuesday that involves up to 7,000 job cuts as the cosmetics giant grapples with persistent demand weakness, especially in Asia.
Toronto, Ontario-based Canada Goose saw revenues in Greater China drop by 4.7%, compared to the previous quarter’s 5.7% jump.
It expects fiscal 2025 adjusted profit of flat to low-single-digit percentage growth, compared to its previous forecast of a mid-single-digit rise.
The company’s third-quarter revenue fell to C$607.9 million ($423.59 million), from C$609.9 million a year earlier.
Analysts on average had expected revenue of C$620.9 million, according to data compiled by LSEG.
Excluding one-off items, Canada Goose posted a profit of C$1.51 per share, compared with an estimate of C$1.54 per share.
M&S delivered a shock leadership team update on Thursday — well shocking to outsiders as the company has apparently been working on the moves for a while — with news that John Lyttle, formerly CEO of Boohoo Group, will be joining on 3 March as MD of Clothing, Home & Beauty in a planned succession. He takes over from Richard Price who’s been in the role since 2020 and is “leaving M&S to pursue a portfolio career, following a handover period”, at the end of April.
M&S said Lyttle has “extensive retail and transformation experience, spending five years at Boohoo and nine years at Primark as COO”.
Maddy Evans, currently director of Womenswear, will also take on a broader role including Lingerie, becoming director of M&S Woman. Charlotte Davies, its director of Lingerie who recently joined from Hunkemöller where she was chief product officer, will report to Evans.
And David Brittain will join as director of Home & Beauty at the end of April from Amazon. He’s currently business development director, Amazon Fashion, Europe.
Additionally, Heidi Woodhouse, who’s director of Home, Furniture & Beauty will be leaving M&S after a handover period with Brittain.
CEO Stuart Machin said that “thanks to Richard’s leadership, the Clothing, Home & Beauty business is now on a much stronger footing with improved product. Style perceptions have increased consistently and our lead on quality and value has extended, driving growth in sales and market share. Richard leaves the business as a long-standing friend of M&S and we wish him the very best.
“That said, there remains much to do and so much opportunity in this next phase of our plan to reshape M&S for future growth. Changes under way to embed strategic sourcing partnerships, a modern planning platform and an efficient logistics network are nascent and there is lots to do to develop a truly omnichannel Clothing, Home & Beauty business.”
He also said that Lyttle “brings extensive experience in driving strong volume-based growth and supply chain transformation across store-based and pureplay retailers. His down-to-earth leadership style fits with our sleeves rolled up, ‘tell it as it is’ culture.
“John will be supported by a strong leadership team. Maddy Evans is transforming our Womenswear proposition and I am delighted to broaden her remit to include our trusted heartland of Lingerie. Bringing all of our Womenswear categories together will further improve our customer proposition and style credentials, and this change builds on the progress Charlotte Davies has already started to make.
“David Brittain is a great addition to the leadership team with a strong track record across Fashion, Home & Beauty in stores and online.”