The luxury brand Tapestry is reporting quarterly earnings that are much better than expected, but warned that the virus outbreak in China is “significantly impacting” its business there.
The owner of Coach and Kate Spade said Thursday that the majority of its stores on mainland China are now closed.
Tapestry expects sales in the second half of the year could be clipped by $200-$250 million because of the outbreak. Per share profits may be reduced by between 35 and 45 cents.
The company cautioned that the impact could be more severe if the situation worsens or the outbreak affects demand outside China.
Tapestry earned $298.8 million, or $1.08 per share, for the second quarter, which ended on Dec. 28.
Removing one-time costs, earnings were $1.10 per share. Analysts surveyed by Zacks Investment Research were looking for 98 cents per share.
Revenue totaled $1.82 billion, beating the $1.8 billion Wall Street expected.
Those strong results pushed shares up 5% before the market opened.
Portions of this story were generated by Automated Insights (http://automatedinsights.com/ap) using data from Zacks Investment Research. Access a Zacks stock report on TPR at https://www.zacks.com/ap/TPR