Tapestry tops sales estimates as Coach handbags draw shoppers

Tapestry Inc topped Wall Street estimates for first-quarter sales on Tuesday, helped by stronger demand for Coach and Kate Spade handbags.

Net sales rose to $1.38 billion, above analysts’ expectations of $1.36 billion.

Sales at Coach, which makes up over 70 percent of Tapestry’s overall sales, rose 4 percent in the three months ended Sept. 29.

In an effort to maintain its exclusivity, Tapestry has been pulling inventory from department stores and cutting back on flash sales.

The fashion house, also known for Stuart Weitzman footwear, is also benefiting from lower tax rates.

Tapestry CEO Victor Luis said: “At the one year anniversary of establishing Tapestry as our new corporate identity, our results continue to reflect the benefits of our diversified multi-brand model. First quarter performance was consistent with our expectations as we achieved strong increases in sales and operating income, while earnings per share gains were further enhanced by a favorable tax rate.

“At Stuart Weitzman, trends improved from the prior quarter, though results, as anticipated, continued to be negatively impacted by development and delivery delays which pressured sales and margins."

Tapestry said quarterly net income was $122.3 million, compared with a loss of $17.7 million a year earlier.