Coach parent Tapestry pauses Capri integration plans amid appeal to lift block
Recasts throughout with comments from conference call
By Juveria Tabassum
Nov 7 (Reuters) -Tapestry TPR.N has halted Capri CPRI.N integration plans as the Coach parent appeals a U.S. judge's decision to block its $8.5 billion deal for the Michael Kors owner, the company said on Thursday.
The merger was blocked last month after the U.S. Federal Trade Commission argued that it would eliminate fierce head-to-head competition between the top two U.S. handbag makers.
"We have contingency plans ready, pending the outcome of the appeal...," Tapestry CFO Scott Roe said on a post-earnings call.
Shares of Tapestry, which beat quarterly estimates and lifted its annual forecasts, climbed 4.5%. Capri's stock rose 2%.
While President-elect Donald Trump is expected to take a more lenient stance on antitrust, analysts reckon it may have come too late for the companies.
"The date at which Tapestry can walk away without penalty is Feb. 10, and I do not expect an appeals decision or changes to the FTC before then," said Mari Shor, senior equities analyst at Columbia Threadneedle Investments.
"So, I would not expect the merger to be completed, which is a good thing in the eyes of investors."
Tapestry will focus on restoring growth in the Kate Spade and Stuart Weitzman brands, and build on robust demand for Coach if the Capri deal does not close, executives said on Thursday.
Coach's Tabby handbags have gained traction among younger customers across variants, helping Tapestry post gross margin growth for eight straight quarters.
In contrast, Capri has reported seven straight quarters of sales decline since the deal was announced in August last year. The company is scheduled to report second-quarter results after markets close.
Tapestry reported a 27% jump in sales in Europe in the first quarter, helping weather a 5% drop in revenue in Greater China.
"Tapestry was able to pick up on pockets of opportunity from Europe and other Asian markets, including a bit of a turnaround for the Stuart Weitzman brand, indicating that their broader merchandising strategy is resonating with aspirational consumers," said Sky Canaves, principal analyst at EMarketer.
Tapestry expects 2025 earnings per share to be between $4.50 and $4.55, compared with the $4.45 to $4.50 forecast earlier.
Revenue of $1.51 billion beat analysts' estimate of $1.47 billion, according to data compiled by LSEG.
Adjusted earnings per share of $1.02 also topped expectations of 95 cents.
Reporting by Juveria Tabassum; Editing by Shilpi Majumdar and Sriraj Kalluvila
Aset Berkaitan
Berita Terkini
Penafian: Entiti XM Group menyediakan perkhidmatan pelaksanaan sahaja dan akses ke Kemudahan Dagangan Atas Talian, yang membolehkan sesorang melihat dan/atau menggunakan kandungan yang ada di dalam atau melalui laman web, tidak bertujuan untuk mengubah atau memperluas, juga tidak mengubah atau mengembangkannya. Akses dan penggunaan tersebut tertakluk kepada: (i) Terma dan Syarat; (ii) Amaran Risiko; dan Penafian Penuh. Oleh itu, kandungan sedemikian disediakan tidak lebih dari sekadar maklumat umum. Terutamanya, perlu diketahui bahawa kandungan Kemudahan Dagangan Atas Talian bukan permintaan, atau tawaran untuk melakukan transaksi dalam pasaran kewangan. Berdagang dalam mana-mana pasaran kewangan melibatkan tahap risiko yang besar terhadap modal anda.
Semua bahan yang diterbitkan di Kemudahan Dagangan Atas Talian kami bertujuan hanya untuk tujuan pendidikan/maklumat dan tidak mengandungi – dan tidak boleh dianggap mengandungi nasihat kewangan, cukai pelaburan atau dagangan dan cadangan, atau rekod harga dagangan kami, atau tawaran, atau permintaan untuk suatu transaksi dalam sebarang instrumen kewangan atau promosi kewangan yang tidak diminta kepada anda.
Sebarang kandungan pihak ketiga serta kandungan yang disediakan oleh XM, seperti pendapat, berita, penyelidikan, analisis, harga, maklumat lain atau pautan ke laman web pihak ketiga yang terdapat dalam laman web ini disediakan berdasarkan "seadanya" sebagai ulasan pasaran umum dan bukanlah nasihat pelaburan. Sesuai dengan apa-apa kandungan yang ditafsir sebagai penyelidikan pelaburan, anda mestilah ambil perhatian dan menerima bahawa kandungan tersebut tidak bertujuan dan tidak sediakan berdasarkan keperluan undang-undang yang direka untuk mempromosikan penyelidikan pelaburan bebas dan oleh itu, ia dianggap sebagai komunikasi pemasaran di bawah peraturan dan undang-undang yang berkaitan. SIla pastikan bahawa anda telah membaca dan memahami Notifikasi mengenai Penyelidikan Pelaburan Bukan Bebas dan Amaran Risiko mengenai maklumat di atas yang boleh diakses di sini.
