(Bloomberg) -- Tapestry Inc. plunged as much as 18 percent -- the most intraday since 2012 -- after becoming the latest consumer-facing company to sound a wider alarm. The company cited “an increasingly volatile macroeconomic and geopolitical backdrop” as it missed both its own and analysts' expectations in the latest quarter and cut its guidance.
- The owner of Coach and Kate Spade projects earnings per diluted share in the range of $2.55 to $2.60 this fiscal year, down from the $2.75 to $2.80 it saw previously.
Key Insights
- The company is competing with Capri Holdings Ltd., formerly known as Michael Kors, to build the American answer to Europe's luxury conglomerates. So far, traction has been slow: Coach same-store sales rose 1 percent globally in the second fiscal quarter, slightly missing analyst expectations.
- China is becoming an increasingly important market for Tapestry. It's hedging concerns about Chinese spending abroad by going directly to shoppers on their own turf, where it says it's seeing “traction” driven by domestic demand.
- Kate Spade remains a work-in-progress after years of excessive flash sales trained shoppers to expect lower prices. Global same-store sales for the Kate Spade brand tumbled 11 percent in the latest quarter.
Market Reaction
- Shares fell as much as 18 percent to $32.26. They'd climbed 16 percent this year through Wednesday's close, outpacing the S&P 500.
- Read the statement here.
To contact the reporter on this story: Kim Bhasin in New York at kbhasin4@bloomberg.net
To contact the editors responsible for this story: Anne Riley Moffat at ariley17@bloomberg.net, Jonathan Roeder
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