(Reuters) -Tapestry Inc raised its annual profit forecast on Thursday, betting that price increases and strong demand for its Coach handbags would help cushion a slowdown in luxury purchases in the United States.
Shares of the company, also known for its Kate Spade and Stuart Weitzman brands, jumped 6% in premarket trading.
Demand for luxury goods is seeing a broad-based slowdown in the United States with consumers pausing a strong post-pandemic splurge, with French fashion house LVMH also reporting softer demand for its fashion and leather goods and jewelry.
However, Tapestry’s Coach handbags – which typically sell for less than $1,000 – have attracted more Gen Z and millennial consumers with collections such as Tabby and Willow.
The company is also seeing a strong rebound in demand in China, with revenue from Greater China rising about 20% – compared with a 20% slump in the previous quarter.
Tapestry now expects fiscal 2023 earnings per share in the range of $3.85 to $3.90, compared with its prior outlook of $3.70 to $3.75 per share.
The company also said it expects annual revenue to approach $6.7 billion, while it previously estimated sales of about $6.6 billion.
(Reporting by Deborah Sophia in Bengaluru; Editing by Devika Syamnath)
