Tapestry Inc. (NYSE: TPR) saw its stock price advance markedly on Thursday following the disclosure of second quarter financial results that outperformed expectations. This leather goods and accessories holding company, owning brands such as Coach and Kate Spade, reported substantial revenue gains, earnings per share (EPS) above market estimates, and revised its annual projections higher.
For the three-month period, Tapestry achieved total revenue of $2.5 billion, representing a 14% increase compared to the same quarter in the previous year. This figure surpassed analyst expectations, which were pegged at $2.32 billion. The company also posted EPS of $2.69, ahead of the consensus estimate of $2.22 per share.
In a detailed presentation, Tapestry specified that over half (56%) of its sales stemmed from handbag products, underscoring the category's pivotal role in driving revenue. Accessories accounted for 27%, while footwear contributed 6%.
The North American market emerged as a notable growth driver, delivering more than 60% of total sales. The company attributed this strong performance partly to a younger consumer base within this geography. Regarding channels, sales through physical store locations comprised 57%, with digital transactions making up roughly 30%.
Encouraged by these outcomes, Tapestry revised its full year guidance upward. Adjusted EPS is now forecasted to range between $6.40 and $6.45, compared to the earlier estimate range of $5.45 to $5.60. Similarly, full year revenue expectations were raised to approximately $7.75 billion from the prior guidance of $7.3 billion, notably above the market's $7.4 billion estimate.
Following the earnings release, Tapestry's shares appreciated by 4.66%, trading around $135.98 at the time of reporting, reflecting investor optimism on the company's demonstrated resilience and growth trajectory.
These strong quarterly results illustrate Tapestry's ability to capitalize on its product portfolio and demographic trends, chiefly in North America. The balance between physical retail presence and e-commerce contributed significantly to revenue diversification.
While the outlook is positive, investors should consider potential operational risks including the company’s reliance on handbag sales, shifts in consumer preferences in accessory and footwear segments, and the implications of evolving retail channel dynamics on sales mix.