Shares of Tapestry Inc. (TPR, Financial) jumped after reporting fourth-quarter earnings per share of 60 cents on revenue of $1.48 billion, a 31% year-over-year increase. The company beat earnings estimates by 3 cents and revenue expectations by $10 million.
“Our strong fourth quarter results capped an excellent fiscal year 18 performance for Tapestry which demonstrated the power of our multi-brand model," CEO Victor Luis said. "We achieved our annual sales and operating income guidance, driving significant growth while earnings per share outpaced our forecast. It was also a year of many milestones, as we completed the acquisition of Kate Spade and evolved into a true House of Brands, establishing Tapestry as our new corporate identity. Our company is built on shared values and a common operating platform while our brands retain their distinctive personalities, individual narratives and unique positioning.”
Net sales were $1.48 billion, up 31% from $1.13 billion in the prior-year quarter. The gross profit was $1 billion, while the gross margin was 67.6%. On a non-GAAP basis, the gross profit totaled $1.01 billion, while the gross margin was 68%.
By segment, net sales for Coach were $1.10 billion, a 5% increase from $1.05 billion in the year-ago quarter. Gross profit totaled $762 million, while the gross margin for the quarter was 69.3%.
Net sales for Kate Spade totaled $312 million, taking into account the consolidation of the joint ventures for Mainland China, Hong Kong, Macau and Taiwan.Ă‚ Gross profit totaled $205 million, while the gross margin was 65.5%.
Net sales for Stuart Weitzman totaled $73 million, down from $88 million in the prior-year quarter. The gross profit was $37 million, while the gross margin was 50.3%.
Moreover, the board of directors declared a quarterly cash dividend of 33.75 cents per common share, an annual rate of $1.35.
Looking ahead, the company expects revenues for fiscal 2019 to increase at a mid-single-digit rate to between $6.1 billion and $6.2 billion.
Further, it expects the operating income growth rate will exceed the revenue growth rate, reflecting synergies from the Kate Spade acquisition, which will have cost savings from synergies of about $100 million to $115 million.
Disclosure: The author holds no positions in any stocks mentioned.
