Tapestry, the group that owns the portfolios of Coach, Kate Spade, and Stuart Weitzman, issued a revision to its annual sales projection on Thursday, with analysts citing a downturn in demand for its handbags and footwear across the United States.
While Tapestry reported a 6 percent uptick in first-quarter revenue on a comparable basis to 2022, the net sales figure of 1.51 billion dollars fell short of market forecasts. The outcome prompted a downward adjustment to the company’s annual forecast. Coach’s shares reportedly slid 1.7 percent following the announcement, compounding a 30 percent loss for the year, said Reuters.
In the backdrop of these financial shifts, Tapestry is currently in the process of acquiring Capri Holdings, the parent company of Versace, a transaction anticipated to conclude in 2024.
Joanne Crevoiserat, CEO of Tapestry, said in a statement: “We achieved record first-quarter revenue and EPS as we continued to successfully advance our strategic growth agenda against a dynamic external backdrop. Our strong and consistent results demonstrate the power of brand building and customer centricity, underpinned by the creativity of our talented global teams and disciplined execution.”
The struggle for Tapestry lies in the sales performance of its “accessible luxury” offerings, encompassing shoulder bags, apparel, and footwear. This sector has grappled with challenges arising from persistent inflation and escalating borrowing costs in the United States, placing strain on consumer budgets, as reported by Reuters.