Tapestry forecasts strong profit as Coach demand grows

Tapestry has issued an optimistic annual earnings forecast following quarterly profits that exceeded Wall Street expectations. The company’s performance was bolstered by strong demand for Coach handbags among affluent and younger consumers. Growth was particularly notable in China, where revenue rose 28%, and Europe, which saw a 19% increase.

Despite the success of Coach, Tapestry reported persistent weakness in its Kate Spade brand, leading to a muted annual revenue forecast. This caused shares to drop approximately 5% in premarket trading. To support shareholders, the New York-based company announced plans to buy back $1.35 billion of stock during the fiscal year.

Finance chief Scott Roe noted that the North American consumer remains a significant strength for the business. The company also reported expanded gross margins of 78.1%, aided by recent price increases.