Luxury and lifestyle brands group Tapestry Inc., formerly known as Coach Inc., on Aug. 14 provided its fiscal 2019 outlook as the company reported fourth-quarter earnings that beat expectations.
For fiscal 2019, the New York-based company forecasts non-GAAP EPS in the range of $2.70 to $2.80. Tapestry projects its revenues to increase at a mid-single-digit rate from fiscal 2018 and to come in between $6.1 billion and $6.2 billion.
The owner of the Coach and Kate Spade brands said its non-GAAP EPS for the fourth quarter ended June 30 rose to 60 cents from 50 cents in the year-ago fourth quarter. The S&P Global Market Intelligence consensus estimate for normalized EPS was 57 cents. Net income for the quarter rose to $176.1 million from $141.7 million.
The company's gross margin for the three months was 67.6%, up from 66.5% during the prior year. Net sales also recorded an increase of 31% to $1.48 billion from $1.13 billion in the previous year.
For the full-year fiscal 2018, Tapestry reported non-GAAP EPS of $2.63, up from $2.15 in the previous year. The S&P Global Market Intelligence consensus estimate for fiscal 2018 normalized EPS was $2.60. Full-year net income totaled $759.9 million, up from $609.3 million in fiscal 2017. The company's net sales for the full year came in at $5.88 billion, compared to $4.49 billion in the previous fiscal year.
Net sales at Coach for the full year was $4.22 billion, compared to $4.11 billion in the previous year. Kate Spade, which Tapestry bought in 2017, reported net sales of $1.28 billion. Kate Spade's global comp sales fell 7%, a drop the company blamed on the "strategic pullback in wholesale distribution" at the brand. Net sales at the Stuart Weitzman brand were flat at $374 million.
Tapestry said it has agreed to acquire Kate Spade's operations in Singapore, Malaysia and Australia along with Stuart Weitzman's business in southern China.