Tapestry is aiming to increase market relevancy and emotionally engage its consumers as its Stuart Weitzman brand fell short in the fourth quarter.
In its earnings report released on Thursday, Tapestry noted that its footwear label saw a 13 percent drop in net sales in Q4 to $62.6 million, down from $71.9 million the same period last year. For the full year, Stuart Weitzman reported a net sales decline of 11 percent to $281.6 million, down from $317.7 million in 2022.
Companywide, Tapestry posted net sales of $1.62 billion for the fourth quarter, in line with the same time period last year. For the full fiscal year, Tapestry recorded net sales of $6.66 million, down from $6.68 million in 2022. The numbers come a week after the company struck a deal to acquire Capri in a deal valuing the business at $8.5 billion.
Today’s results sparked concern for some analysts. Neil Saunders, managing director of GlobalData, said in his note to clients that Stuart Weitzman and Kate Spade were “going backward” at Tapestry while Coach is “chugging along nicely.”
“It does not help that both brands are more exposed to the challenged North American market,” Saunders said. “Their exposure to categories where there is more cutting back is also unhelpful.”
The analyst went on to state that the Weitzman’s assortment “went off the boil” during the quarter and some of the new releases “did not inspire” the consumer in the way previous seasons have done. “Despite some interesting collections earlier in the year, such as the collaboration with KidSuper – products were a little timid and easily overlooked,” Saunders said.
On the company’s earnings call on Thursday, Tapestry CEO Joanne Crevoiserat told analysts that the shoe brand was “significantly” impacted by the difficult external backdrop in China and North America, which have been weak spots for many companies. “Improvement in the back half did not fully offset the impact of a slower China business in the first half,” Crevoiserat said. “Despite these pressures, we focused on our long-term potential, maintaining brand health, which was underscored by gross margin expansion.”
As for highlights in the quarter, the CEO said that Stuart Weitzman’s low pumps and booties continued to perform well in keeping with the broader consumer shift to casual and wear to work styles. Specifically, Crevoiserat noted the brand’s SoHo and Stuart collections as its top footwear performers in Q4.
Looking ahead to fiscal 2024, Crevoiserat told analysts on today’s call that the company is focusing on driving growth in Stuart Weitzman’s core and iconic categories while adding depth to underpenetrated classifications that represent significant opportunity. This includes the launch of an extended sneaker assortment planned in the second quarter as well as expanded offering of flats, specifically trend-right ballet styles.
The CEO also said that Tapestry plans to accelerate the brand’s growth in China and expects to benefit from the recovery of this “highly profitable region” this fiscal year, which represented nearly 40 percent of the brand sales in fiscal year 2021.
“Building on our strong foundation, we are focused on the future,” Crevoiserat added. “We remain steadfast in our commitment to deliver revenue and profit gains across our current portfolio where our runway is significant.”
