Shares of Tapestry, Inc. (NYSE: TPR) , a designer and retailer of handbags, apparel, and footwear under well-known brands such as Coach, Kate Spade, and Stuart Weitzman, are down 12% as of 11:20 a.m. EDT after the company released fiscal 2018 third-quarter results.
Net sales jumped 33% to $1.32 billion, fueled by its Kate Spade acquisition and 3% comparable sales growth at Coach. Adjusted earnings per share checked in at $0.54, topping analysts' estimates calling for $0.50, per Thomson Reuters.
Despite reporting a sound quarter that topped estimates on the top and bottom line, investors appear to have concern about the company's Stuart Weitzman brand. Stuart Weitzman results were negatively impacted by production issues and poor sell-through of carryover styles, which weighed on sales and margins. Management noted the issues are likely to continue through the fall and winter. For long-term investors who believe in the company's ability to continue generating high-margin sales through its well-known brands, this is a short-term speed bump.
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