Tapestry, the group behind popular fashion brands such as Coach, Kate Spade, and Stuart Weitzman, has revised its annual sales projections due to a decrease in demand for handbags and footwear in the United States. Although the company saw a 6% increase in revenue for the first quarter of the year, the net sales of $1.51 billion fell short of analysts’ expectations. This led to a reduction in the company’s yearly projection and a 1.7% decrease in Coach’s stock following the news.
Despite these financial changes, Tapestry is in the process of acquiring Versace’s parent company, Capri Holdings, in a transaction expected to be completed by 2024. Tapestry’s CEO, Joanne Crevoiserat, highlighted the company’s record first-quarter revenue and EPS in a statement, attributing its success to the advancement of its strategic growth agenda. However, the company continues to face challenges in selling its “accessible luxury” products, including shoulder bags, clothes, and shoes, due to consumer budget strains caused by ongoing inflation and rising borrowing prices in the US.
The struggle to sell “accessible luxury” products in the US has contributed to Tapestry’s decision to reevaluate annual sales projections and has impacted the company’s stock performance. Despite these challenges, Tapestry remains committed to its strategic growth agenda and is moving forward with plans to expand its portfolio through acquisitions.
