Shares in the fashion house behind Kate Spade dropped more than 20 per cent today after it posted a surprise fall in revenue and profit for the quarter.
Tapestry reported net profit of $148.9m (£122.8m) in the three months to the end of June. Net sales rose two per cent to $1.51bn, but fell short of analysts’ estimates.
The trading was dragged down by sluggish performance at designer brand Kate Spade, with like-for-like store sales dropping six per cent.
Chief executive Victor Luis blamed a lack of originality in some Kate Spade bags and heavy discounts from competing brands for the drop.
Kate Spade has weighed on the fashion group’s trading since its acquisition in 2017, but the label was expected to report positive sales this quarter.
Tapestry, which also owns handbag brand Coach, cut its full-year profit growth forecasts as a result of the figures.
“The brand’s financial results did not meet our expectations and more time is required to drive a positive inflection in the business, particularly in light of the traffic-challenged and competitive retail environment in North America,” said Luis.
“We acknowledge that there are opportunities to improve performance and we are addressing those areas with a sense of urgency.”
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