Coach owner Tapestry raises annual profit forecast

Luxury group Tapestry Inc raised its annual profit forecast on Thursday, helped by resilient demand and its strategy to largely use company-owned stores and its website to sell Coach and Kate Spade bags.

Shares of the company, which fell 4.5% on Wednesday following disappointing earnings and forecasts from rival Capri Holdings, rose 2% in premarket trading.

Analysts have said Tapestry should be more insulated from a slowdown in demand at North American department stores felt by rivals like Michael Kors owner Capri, as it sells most of its products through its own retail channels where consumer spending is still holding strong.

Only about 10% of Tapestry's revenue comes from wholesale channels, according to analysts at Raymond James.

The company said it now expected fiscal 2023 earnings of $3.70 to $3.75 per share, compared with its prior estimate of $3.60 to $3.70.

Total revenue fell 5% to $2.03 billion in the second quarter ended December 31, in line with analysts' average estimate, according to Refinitiv IBES data.