Tapestry has reported better-than-expected sales growth for the third quarter, with Coach once again the hero while Kate Spade and Stuart Weitzman lagged behind.

For the quarter ended March 29, net sales rose 7 per cent to $1.58 billion, while net income surged 45 per cent to $203 million.

All of the gains came from Coach, whose sales soared 12.9 per cent. According to GlobalData MD Neil Saunders, the brand is bucking a wider slowdown in luxury thanks to solid execution in innovation, design, and marketing.

“Some of the hefty uplift this quarter is the result of consumers pulling forward purchases because of concerns that prices could rise because of tariffs in the months ahead. This factor is unlikely to repeat itself to the same extent in the periods ahead, so future growth is likely to moderate.

“Even so, the fact that consumers are prioritizing Coach bags during a time of disruption underlines the desirability factor the brand has created around its products – and this generally bodes well for performance,” he added.

At Kate Spade, sales fell 12.8 per cent on the back of a 5.6 per cent decline last year. Saunders believes the brand’s products are not bad, but its assortment lacks coherence and good storytelling. 

“While Coach is a ‘must-have’ for many shoppers, Kate Spade is only a ‘kind of nice to have’. This needs to change if the brand is to swing back into growth,” he stated.

The performance of Stuart Weitzman continues to be poor, with sales down 17.6 per cent. According to the analyst, the label has never performed well and is now in freefall. 

However, this will no longer be the problem of Tapestry when the sale of Stuart Weitzman to Caleres is complete. While the company is receiving only $105 million compared to the $530 million it paid in 2015, Saunders believes this is the right decision.

“It has become clear that Tapestry had few solutions for this smaller part of its business, and we would prefer management time and expertise to be spent on the core drivers of growth rather than the sideshow of Stuart Weitzman,” he added.

Looking ahead, Tapestry has raised its outlook for the full year, expecting revenue to grow 4 per cent compared to the prior guidance of 3 per cent.

The company said the tariff changes would have an immaterial impact on its annual results due to the timing of sell-throughs and in-transits.

“While the external backdrop is complex, our vision remains clear,” commented CEO Joanne Crevoiserat. “We maintain a bias for action and will harness our competitive advantages, including our global scale, compelling value, and strong fundamentals, to adapt and win in any environment.”