What happened
Shares of Tapestry (TPR +5.26%), a retailer that owns the Coach, Kate Spade, and Stuart Weiztman brands, rose roughly 10% on Thursday. The big story was the company's fiscal first-quarter 2022 earnings update, which hit Wall Street before the open of trading today. It was pretty good reading, but it was the outlook for the rest of the year that likely got investors so excited.
So what
Tapestry's first quarter revenue came in at $1.48 billion, up 26% from a year ago and 9% higher than pre-pandemic levels. Digital sales increased 50% year over year.
Regional highlights included North American sales growth of 40% and growth of 25% in China. Gross profit margin increased to 72.2% from 70.8%. And adjusted earnings per share (EPS) came in at $0.82, up from $0.58 a year ago. Analysts had been calling for EPS of $0.69 so Tapestry soundly beat the Street's number. Investors tend to like that sort of thing.
Image source: Getty Images.
All of that said, the really exciting update was probably the company's outlook for the rest of fiscal 2022. After just a single quarter, Tapestry increased its sales target from $6.4 billion to $6.6 billion, which would be a record number for the company. On the bottom line, the company increased its projection range for EPS from $3.30 to $3.35 up to a range of $3.45 to $3.50. Some of that is likely due to the solid first-quarter results, but with such a strong start, investors are likely expecting to see more good things as the year progresses.
Now what
Tapestry's iconic collection of brands performed well in the first quarter. That sets a strong foundation for fiscal 2022, with the company already adjusting Wall Street expectations higher. It looks like investors today are rewarding management for both the quarter's success and the improved outlook it hints at.
