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The luxury retailer’s sales in the Greater China region plunged about 32% in the fourth quarter due to COVID-related disruptions.
Major Chinese cities have imposed multiple rounds of restrictions this year following Beijing’s “dynamic zero-COVID” policy of promptly stamping out all outbreaks at a time when much of the world co-exists with the virus.
Tapestry (NYSE:TPR) joins the likes of Gucci owner Kering (EPA:PRTP) SA, Ray-ban maker EssilorLuxottica and Ralph Lauren Corp (NYSE:RL) in flagging a sales hit from China, a key growth market, after these measures left high-fashion companies with piles of unsold stock.
Shares of Tapestry, which also owns Kate Spade and Stuart Weitzman, fell 2.2% before the bell.
Tapestry forecast fiscal 2023 profit between $3.80 and $3.90 per share, lower than Wall Street expectations of $3.91.
The Coach handbag maker reported total revenue of $1.62 billion for the fourth quarter ended July 2, missing analysts’ average estimate of $1.64 billion, according to IBES data from Refinitiv.
Excluding items, the company earned 78 cents, marginally above estimates of 77 cents.
