Aug 13 (Reuters) - Tapestry beat Wall Street estimates for quarterly profit and issued an upbeat annual earnings forecast on Thursday, betting on resilient demand from affluent and young shoppers for its Coach handbags.
The New York-based company, which also forecast current quarter revenue and profit above estimates, said it expects to buy back $1.35 billion of stock in the fiscal year.
The company has scaled back promotions, instead targeting its marketing campaigns toward younger shoppers to help
Coach gain market share. Newer collections such as Tabby and Belted Ergo shoulder bags have also helped drive growth at Tapestry.
In contrast, Kate Spade has continued to struggle with sluggish sales.
Revenue from North America, its biggest region, rose 7% on a constant currency basis, while China jumped 28% and Europe rose 19% compared with a year ago.
"The North American consumer remains resilient and constructive, and it's a big part of our business and one of our relative strengths," finance chief Scott Roe told Reuters.
The company expects earnings per share for the year ending June 2027 to be in the range of $7.80 to $7.90, the midpoint of which is above analysts' estimates of $7.84 per share, according to data compiled by LSEG.
It also sees first-quarter revenue growth of high single digits and profit of about $1.55 per share, beating analysts' estimates of 5.5% growth and $1.49 per share, respectively.
The company's quarterly gross margins expanded 180 basis points to 78.1%, helped by the sequential price hikes it took over the past quarters.
Tapestry's fourth-quarter adjusted profit of $1.32 per share topped estimates of $1.28 per share.
The company's quarterly sales rose 8.9% to $1.88 billion from a year earlier, in line with analysts' estimates.
The midpoint of its annual revenue forecast of $8.4 billion to $8.5 billion came in slightly below estimates of $8.46 billion.
(Reporting by Anuja Bharat Mistry and Shania S Thomas in Bengaluru; Editing by Leroy Leo)
