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At Tapestry, Dress Shoes Are Making a Comeback + Three Other Big Trends From Q3

At Tapestry, dress shoes are starting to make a comeback as the summer event season resumes and more consumers return to the office.

That was just one of the key trends that top Tapestry execs shared during a call with FN following today’s Q3 earnings report, which revealed that sales returned to pre-pandemic levels. Other big highlights: China is booming, digital is bringing in a ton of new customers and brick-and-mortar recovery is still uneven.

For the three months ended March 27, the company — parent to Coach, Kate Spade and Stuart Weitzman — logged adjusted profits of $145 million, or adjusted earnings of 51 cents per share, compared with the prior year’s loss of $76 million, or loss of 27 cents per share. Wall Street had predicted earnings of 31 cents per share. Revenues increased 19% to $1.27 billion, versus consensus bets of $1.22 billion.

“We delivered a really strong quarter that significantly outpaced our own expectations,” said CEO Joanne Crevoiserat.

Here, Crevoiserat and Coach CEO Kahn sound off on some notable trends to watch in the months ahead.

Footwear trends are improving, with dress starting to make a comeback.

As consumers begin to return to the office and look forward to weddings and other summer events, Stuart Weitzman is ramping up its focus on dress even as it continues to bank on core styles and casuals as well.

“We’re shifting the balance a little back to dress as we’re seeing consumers looking for and engaging with the category,” Crevoiserat said, noting that bridal collections are seeing a bounce.

As Kate Spade continues to undergo a transformation, the brand’s footwear business delivered positive growth in the quarter, driven by casual flats and sneakers.

“There is growing momentum as we head into the summer selling season,” Crevoiserat noted.

China is booming.

Tapestry said the company’s intense focus on the Chinese consumer led to notable growth, compared to both prior year and pre-pandemic levels. Revenue on the mainland rose significantly compared to last year and approximately 40% compared to pre-pandemic levels.

“The Coach story has been a great one. Foothold and awareness in the market continues to grow,” Crevoiserat said. 

At Weitzman, China sales were up 130% compared to fiscal year ’20 and approximately 45% versus pre-pandemic levels — and the results were fueled by younger consumers. “This bodes well for long-term opportunities,” Crevoiserat explained.

Digital expansion is bringing a ton of new customers to the brand’s websites.

Driven by a notable uptick in Gen Z and millennial shoppers, Tapestry brought in 700,000 new customers across brands via its digital platforms.

During the quarter, Tapestry racked up triple-digit e-commerce growth, which brought sales to about 30% of total revenue, compared with a mid-teens percentage a year ago.

“We’re taking deliberate action in how we approach consumers and understand who they are,” said Crevoiserat. In addition to the customer acquisition story, the company noted a higher purchase frequency across brands. 

Brick-and-mortar is back in business, but big cities are still catching up.

While digital might be the big story, “stores will still be important,” Crevoiserat reiterated.

One trend the Tapestry has already observed is that the new e-commerce customers aren’t cannibalizing brick-and-mortar business — giving the company confidence in its omnichannel approach.

Coach CEO and president Todd Kahn noted that markets such as Texas and Florida — which have been strong for many fashion players through the pandemic — continue to lead the way.

But a New York revival could soon be a reality. “Once we get more people vaccinated and tourism — even domestic tourism — returns, that’s going to help the New York market.

“That New York is back moment is something that we’re all so anxiously waiting for,” Kahn said, noting the brand is planning a physical fashion experience in September.

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