Tapestry Inc. (TPR) must have some tricks in its purse with its latest earnings beat.
The banner formerly known as Coach reported $1.07 in earnings per share in the second quarter of 2018 on Tuesday, Feb. 2, exceeding Wall Street forecast of 89 cents. Net sales totaled $1.79 billion, a 35% uptick, or $1.32 billion, from the same period last year and again topprf analysts' expectations of $1.77 billion. Adjusted income for Tapestry fell in the second quarter because of one-time charges under the new tax law.
"Our second-quarter performance exceeded our expectations, driven by a return to growth for Coach, sales gains at Stuart Weitzman and the contribution of Kate Spade as we continued to make progress on the brand's integration," CEO Victor Luis said in a statement. "Importantly, Coach comparable store sales rose globally, led by outperformance in North America."
Global comp sales for Tapestry's Coach brand rose 3% in the second quarter, totaling $1.23 billion. Kate Spade, meanwhile, posted a comp sales decline of 7% and Stuart Weitzman reported a 2% increase.
In its earnings report, Tapestry announced that it will expand its control of all three brands in China and Taiwan to "maximize the opportunity with Chinese consumers," Luis said.
"Overall, we remain focused on capitalizing on the opportunities for Tapestry across all of our brands, leveraging our successful experience in global business development, brand-building and best-in-class supply chain," Luis added.
The company expects an EPS in the range of $2.52 and $2.60. Shares were down more than 2% in premarket trading to $44.97.