Tapestry Remains ‘Unsatisfied’ with Stuart Weitzman’s Pace of Recovery, CEO Says

Tapestry Inc. chief executive officer Joanne Crevoiserat expressed concerns over the company’s Stuart Weitzman footwear label during a call with analysts on Thursday.

On the company’s second quarter conference call, Crevoiserat noted that top-line results at the footwear brand were “pressured,” reflecting in part the ongoing strategic reduction in off-price wholesale shipments. These headwinds were partially offset by growth in China against last year’s COVID-impacted results and an expanded gross margin versus the prior year, the CEO said.

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Other wins at Stuart Weitzman include growth in the brand’s core boot classification, fueled by gains in the Soho and 5050 families. The shoe brand also continued to build out its assortment with more seasonless casual styles, including loafers and ballet flats.

“During the quarter, we also launched a new sneaker assortment featuring a range of innovative designs, engineered to combine fashion and function,” Crevoiserat said. “At the same time, our handbag collection, while still a small portion of the assortment, drove growth at high AUR. As we move forward, we will deliver more newness into the core assortment in keeping with rapidly evolving consumer trends.”

“Still, we remain unsatisfied with the brand’s pace of recovery, and we continue to focus on prioritizing brand health and delivering innovation for consumers,” Crevoiserat added.

This sentiment comes as Stuart Weitzman saw net sales in the second quarter dip 4 percent to $82.2 million, down from $85.4 million the same time last year.

“Overall, the Stuart Weitzman team is focused on executing against its strategic priorities, fueling brand heat and deepening customer engagement through a stronger, more diversified foundation of differentiated product and emotional purpose-led storytelling to drive enhanced growth and profitability long term,” Crevoiserat said.

As for the rest of the company, Tapestry Inc. reported a 3 percent increase in net sales in the second quarter to $2.08 billion, compared to $2.03 billion the same time last year. However, net income for the quarter slipped to $322 million from $330 million a year ago.

Tapestry added on Thursday that it’s on plan to close its buyout of Capri, parent to Michael Kors, Versace and Jimmy Choo, this calendar year.

The company took on $6.1 billion in debt in November to help fuel the transaction, but remains committed to getting its gross leverage ratio below 2.5x debt/adjusted earnings before interest, taxes depreciation and amortization within two years of the deal’s closing.

Separately, Capri Holdings reported late on Thursday that its total revenue decreased 5.6 percent in the third quarter to $1.43 billion, down from $1.51 billion the same period last year.

Capri noted that total company retail sales declined in the mid-single-digits with trends being impacted by softening luxury consumer demand primarily in the Americas as well as by the Michael Kors Americas e-commerce implementation issues discussed last quarter. In wholesale, revenue decreased in the low-teens driven by softer demand in the Americas and EMEA, Capri said.

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