Tapestry Inc., parent to Coach, Kate Spade and Stuart Weitzman, reported its third-quarter financial results on Thursday, revealing that its sales figures fell below Wall Street expectations in the three-month period.
According to LSEG data via Reuters, the company's net sales tallied $1.48 billion USD, while analysts had forecast the conglomerate would reach $1.5 billion USD in the quarter ending on March 30. Tapestry's revenue was also down from the year prior, when the company raked in $1.51 billion USD. Across brands, sales at Coach were flat, while revenues at Kate Spade and Stuart Weitzman dropped by 6% and 18%, respectively.
In April, the US Federal Trade Commission filed a lawsuit against Tapestry in an effort to bar its acquisition of its rival Capri Holding Ltd., which owns Michael Kors, Versace and Jimmy Choo. The FTC stated that if the deal were to go through, it would eliminate direct competition in the luxury handbag space
In a statement, the FTC wrote that the “proposed merger threatens to deprive millions of American consumers of the benefits of Tapestry and Capri’s head-to-head competition, which includes competition on price, discounts and promotions, innovation, design, marketing and advertising.”
Earlier this month, a judge announced that the lawsuit would head to court on September 9. The preliminary injunction hearing is expected to continue through the following week. Should the judge rule against the merger, the fate of the Tapestry-Capri deal will be decided at the FTC’s in-house court.
In its third-quarter press release, Tapestry started that it is "confident in the merits and pro-competitive, pro-consumer nature of this transaction and looks forward to presenting its strong legal arguments in court.”
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