Tapestry Up as Earnings Lifted by Digital and China

Tapestry more than doubles analysts' adjusted-earnings expectations for the first quarter.
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Shares of Tapestry jumped on Thursday after the luxury-goods company reported first-quarter earnings and sales that topped analyst estimates.

The parent of Coach, Stuart Weitzman and Kate Spade reported net income of 83 cents a share against 7 cents in the year-earlier quarter. The latest adjusted earnings were 58 cents. Revenue for the period fell 14% to $1.17 billion from $1.36 billion. 

Analysts were expecting Tapestry to report earnings of 21 cents a share, or an adjusted 22 cents, on revenue of $1.07 billion. 

"We delivered strong profit growth across our portfolio of brands in the face of an unprecedented and challenging backdrop. We drove a meaningful sequential improvement in topline trends, supported by strength in Digital and China," Tapestry Chief Executive Joanne Crevoiserat said in a statement. 

Tapestry shares at last check were rising 11% to $23.65. Through Wednesday, the stock was trading in the middle of its 52-week range between $10.18, set in early April, and $30.40, set in early February.

The company said its growth in China was due to enhanced marketing and expanded reach across direct channels and third party online distribution. 

Net sales for the Coach brand totaled $875 million for the first quarter compared with $966 million a year ago. Coach's gross margin was 73.7% with a profit of $645 million. 

Meanwhile, net sales for Kate Spade totaled $240 million, compared with $306 million in the prior-year period. Kate Spade had gross profit of $154 million.