NEW YORK, United States — Tapestry became the latest consumer-facing company to sound a wider alarm, citing “an increasingly volatile macroeconomic and geopolitical backdrop” as it missed both its own and analysts’ expectations in the latest quarter and cut its guidance.
The owner of Coach and Kate Spade projects earnings per diluted share in the range of $2.55 to $2.60 this fiscal year, down from the $2.75 to $2.80 it saw previously.
The company is competing with Capri Holdings, formerly known as Michael Kors, to build the American answer to Europe’s luxury conglomerates. So far, traction has been slow: Coach same-store sales rose 1 percent globally in the second fiscal quarter, slightly missing analyst expectations.
China is becoming an increasingly important market for Tapestry. It’s hedging concerns about Chinese spending abroad by going directly to shoppers on their own turf, where it says it’s seeing “traction” driven by domestic demand.
Kate Spade remains a work-in-progress after years of excessive flash sales trained shoppers to expect lower prices. Global same-store sales for the Kate Spade brand tumbled 11 percent in the latest quarter.
Shares fell as much as 11 percent as of 6:57 am before the start of regular trading in New York. They’d climbed 16 percent this year through Tuesday’s close, outpacing the S&P 500.
By Kim Bhasin; editor: Anne Riley Moffat.