Coach powers Tapestry holiday quarter beat; coronavirus impact looms

B? Aditi Seb??tian Feb 6 (R?uters) - N?w lines of Coa?h handbags helped Tapestry Inc beat holiday quarter expectations on Thursday, sending its shares up 6%, even as the fashion house warned the coronavirus o?tbreak coul? dent its sales by up to $250 million. Tapestry has closed a majority of its stores in mainland China and became the latest company to c?t its earnings o?tlo?k follo?ing the epid?mic that has kill?d more t?an 500 people.

Michael Kors owne? Capri Holdings, Ralph Lauren and Levi ?trauss h?ve all closed outlets in the world's second largest economy - a cr?tical market for l??ury goods makers. Like its peers, Tapestry has invest?d ?eavily in the ?egion ?nd said sales were strong before t?e outbreak, driven by the launch of its products on Alib?ba Group H?lding Ltd's Tmall. Coach sales rose 2% to $1.27 billion in the ?econd quarter, dr?ven by highe? prices, its new "Tabby" handbag line and a Star ?ars-t?emed collection of fanny packs and túi xách n? hàn qu?c bags.

To keep shoppers, especi?lly millennials and Gen Z, walking into stores, the high-margin brand also ta?ped actor Michael B. ?ordan t? de?ign a limited ?dition Naruto line of apparel. Excluding certain items, Tapestry ?arned $1.10 per share in the quarter, ?eating analysts' ave?age estimate ?f 99 cents, Túi xách n? according to IBES data from Refinitiv. Tapestry's total quart?rly net sales rose nearly 1% to $1.82 billion, also h?lped by impro?ement in sales at Kate Spade.

The company on Thursday name? Liz Fraser, president of New York-b?s?d women's fashion brand Túi xách công s? n? ??ng laptop ?afay?tte 148, as the new chief executive officer of Kate S?ade, which it bought in 2017. Analysts at Bernstein ?a?d the appointment would be perceived as a p?sitiv? change at the struggling fashion label. CORONAVIRU? IMPACT Second-half f?nancial results could be hit by about $200 million to $250 million in sales and 35 cents to 45 ?ents in earning? per ?hare, Tapestry sai?. Tape?try said China re?re?ents a low to mid-teens percentage of the company's total revenu?.

It has also lowered its supply chain exposur? to the country by shifting production to other regions. "Investors appear to be relieved that the impact from the coronavirus wasn't as bad as they had feared going into the print," said Karan Gujadhu?, an equity analyst at Woozle R?search in L?nd?n. However, he said based on the impact of the outb?eak spreading to regions outside ?hina, the hit to Tapestry appears "to be far more bearish that management are suggesting in their update." (Re?orting by Aditi Sebastian and Uday Sam?ath; E?iting by S?a?lesh Kuber and Saumyadeb Chakrabarty)

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