Strong sales from Tapestry, Lee maker show clothing rebound
Strong sales results from Coach’s parent as well as from the maker of Wrangler and Lee jeans offer the latest evidence that shoppers’ spending on fashion and accessories is rebounding to pre-pandemic levels.
Tapestry Inc. on Thursday reported fiscal third-quarter results that beat Wall Street estimates as spending on luxury goods rebounded from a deep malaise last year. The company, which also makes Kate Spade and Stuart Weitzman products, swung to a profit from a year-ago loss and reported a 19% sales increase for the period ended March 27.
“While the environment remains volatile, we see encouraging signs of recovery as vaccination efforts progress, resulting in increased consumer confidence, strong demand for our categories, and improving in-store traffic trends,” said Joanne Crevoiserat, CEO of Tapestry, in a statement.
Wrangler and Lee maker Kontoor Brands Inc., meanwhile, offered a better-than-expected annual profit outlook after reporting strong fiscal firstquarter results. The company swung to a profit from a year ago and enjoyed a 29% increase in sales for the period.
CEO Scott Baxter told The Associated Press that the pandemic is accelerating the casualization of dressing, and the Greensboro, North Carolina-based company is benefiting from that. After being homebound for a year, newly vaccinated shoppers are going out and want to stay comfortable. They also will be heading back to offices that will have a hybrid work schedule, warranting a casual dress code, he added.
“I think it is here to stay,” he said, referring to comfort dressing. “It’s not a short-term trend.”
Tapestry reported fiscal third-quarter net income of $91.7 million, or 32 cents per share, compared with a loss of $677.1 million, or $2.45 per share, in the year-ago period. Earnings, adjusted for asset impairment costs and non-recurring costs, were 51 cents per share. The results surpassed Wall Street expectations. The average estimate of 10 analysts surveyed by Zacks Investment Research was for earnings of 30 cents per share.
Tapestry posted revenue of $1.27 billion in the period, which also topped Street forecasts. Seven analysts surveyed by Zacks expected $1.23 billion.
Kontoor Brands Inc. reported firstquarter net income of $64.5 million, or $1.09 per share, for the latest period. That compares with a loss of $2.71 million, or 5 cents, in the year-ago period. Earnings, adjusted for restructuring costs, were $1.43 per share. The maker of Wrangler and Lee apparel posted revenue of $651.8 million in the period.
Kontoor expects full-year earnings in the range of $3.70 to $3.80 per share. Analysts expected $3.67 per share for the year, according to FactSet analysts.
Tapestry shares have increased 42% since the beginning of the year. The stock has more than tripled in the last 12 months. Tapestry’s shares slipped about 4% in Thursday trading.
Kontoor shares have risen 71% since the beginning of the year. The stock has more than tripled in the last 12 months.