Shares of Tapestry, owner of the Coach brand, rose 16% after the retailer said that it expects the quarantine to be lifted in Shanghai at the beginning of next June, which will be followed by a gradual improvement thereafter.
The company’s stock had initially fallen after Tapestry scaled back its FY 2022 outlook as the general shutdown in China threatens consumer demand for the company’s luxury bags and accessories, which also revealed better-than-expected sales and profits during the third fiscal quarter.
Since last March, China has suffered from an outbreak of the Omicron mutant and had to impose quarantine and travel restrictions, which not only damaged demand in the region, but also affected the industry. To read more [Starbucks Aspirations Halted as Lockdown Continues in China].
Tapestry posted adjusted earnings for the three months ended April 2, of 51 cents per share on revenue of $1.44 billion, compared to analysts’ expectations of adjusted earnings of just 41 cents per share on revenue of $1.42 billion.
Realizing it was going to take a hit in its fourth fiscal quarter results, the company lowered its full-year outlook, seeing annual earnings of just $3.45 per share, compared to its previous estimate of $3.60-3.65 per share. As for revenue, Tapestry expects growth By a high of dozens compared to the fiscal year 2021 to $6.7 billion in total, which is lower than analysts’ expectations of $6.75 billion, and it is worth noting that Tapestry’s stock is recording a decline of 24% since the beginning of the year so far.