Tapestry Inc. continued to grow in its fiscal second quarter — setting the scene for a much bigger expansion later this year when it plans to scoop up competitor Capri Holdings.
While the company’s net income for the quarter slipped to $322 million from $330 million a year ago, the bottom line looked better when special items were factored out.
Adjusted net income gained 14.2 percent to $377 million, with earnings per share of $1.63 — 17 cents ahead of the $1.46 analyst had penciled in, according to FactSet.
Sales for the Coach, Kate Spade and Stuart Weitzman parent grew 3 percent to $2.08 billion for the quarter ended Dec. 30.
“During the key holiday season, our passionate teams delivered for our customers, fueling brand magic through innovative product, engaging storytelling, and operational excellence,” said Joanne Crevoiserat, chief executive officer.
“We have an unwavering commitment to deliver sustainable growth and shareholder value,” Crevoiserat said. “We will continue to put the consumer at the center of everything we do, building our brands for the future and harnessing our data-driven, customer engagement platform to enhance creativity, speed, and agility.”
Tapestry nudged up its outlook for the year and is now projecting EPS of $4.20 to $4.25, up from the $4.10 to $4.15 seen in November.
Revenues are slated to rise 1 percent to about $6.7 billion.
Tapestry said its on plan to close its buyout of Capri, parent to Michael Kors, Versace and Jimmy Choo, this calendar year.
The company took on $6.1 billion in debt in November to help fuel the transaction, but remains committed to getting its gross leverage ratio below 2.5x debt/adjusted EBITDA within two years of the deal’s closing.
Regulators in China approved the takeover in January, putting the transaction that much closer.
