Tapestry Raises Outlook As Coach Bags and China Offset US Slowdown — Retail Bum

As consumers slow down their post-pandemic spending on leather goods and jewelry, luxury brands such as LVMH and Kering, which owns Gucci, have observed a decline in demand in the U.S.

Tapestry, on the other hand, is seeing a different kind of demand and has decided to raise its profit forecast for the year, with price hikes and strong demand for Coach handbags shielding the company’s business from a downturn in the U.S. market.

According to credit card data from Citi, luxury spending in the U.S. hit its lowest monthly rate in almost three years in March. Nonetheless, Tapestry’s Coach handbags, which typically cost less than $1,000, have seen a 7% increase in sales, thanks to their popular collections like Tabby and Willow, which have attracted younger Gen Z and millennial consumers.

With that, the company’s Q3 results beat analysts’ expectations, with net sales rising by 5% to $1.51 billion and net profit increasing to $187 million, up from $123 million a year ago.

The company, which owns several popular brands such as Coach, Kate Spade, and Stuart Weitzman, particularly benefitted from an increase in demand in China, where revenue improved by 20% after Covid lockdowns were lifted. It also witnessed a 20% increase in revenue in Japan…