Tapestry has swung to a first quarter profit as sales beat forecasts, thanks to sales growth in its Coach and Kate Spade brands.
The fashion retail and manufacturing company, which owns Coach, Kate Space as well as Stuart Weitzman, said net income for the first quarter ending September 29 rose to $122.3 million (£94.89 million), compared with a loss of $17.7 million (£13.7 million) a year ago.
Meanwhile, net sales increased seven per cent to $1.38 billion (£1.07 billion), ahead of market forecasts of $1.36 billion, and comparable store sales increased four per cent.
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Tapestry said results were boosted by continued growth at Coach and a higher demand in Kate Spade handbags.
However, at Stuart Weitzman delivery delays put pressure on sales and margins.
“Production levels and shipments have now stabilised, reflecting the investment in talent and processes as well as added manufacturing capacity,” chief executive Victor Luis said.
“As a result, we remain on track to achieve profitable sales growth in the holiday quarter.”
Tapestry estimates revenues for the current financial year to increase at a “mid-single-digit rate” to somewhere between $6.1 billion and $6.2 billion.
It added that it forecast operating income growth rate to “exceed the revenue growth rate”.
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