NEW YORK (AP) - Tapestry Inc.’s shares lost nearly a quarter of their value Thursday after the upscale handbag and fashion company said that it would have an unexpected drop in profit and revenue in the current quarter.
The New York-based company, which owns the Coach, Kate Spade and Stuart Weitzman labels, said it expects its revenue in its fiscal first quarter will be slightly below the same three-month span last year and its earnings will decline. Its business is most notably being dragged down by the Kate Spade brand, which it bought in 2017 and has yet to see a turnaround.
Tapestry’s stock ended Thursday down $5.55, or 22%, at $19.45.
During a conference call, Tapestry’s CEO Victor Luis said the company needs more time to revive the Kate Spade brand.
“We acknowledge that there are opportunities and are addressing those areas with a sense of urgency,” he said.
Kate Spade had sales of $332 million in the fiscal fourth quarter, compared to $312 million in the prior year. Global sales at stores opened at least a year fell 6%.
Tapestry reported fiscal fourth-quarter earnings of $148.9 million, down from $211.7 a year ago.
On a per-share basis, the company said it had profit of 51 cents. Earnings, adjusted for costs related to mergers and acquisitions and non-recurring costs, were 61 cents per share. That matched expectations of Wall Street analysts polled by Zacks Investment Research.
The company posted revenue of $1.51 billion in the period, which fell short Street forecasts. Nine analysts surveyed by Zacks expected $1.53 billion.
For the year, the company reported profit of $643.4 million, or $2.21 per share. Revenue was reported as $6.03 billion.
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Elements of this story were generated by Automated Insights (http://automatedinsights.com/ap) using data from Zacks Investment Research. Access a Zacks stock report on TPR at https://www.zacks.com/ap/TPR
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