"Overall, Tapestry is weathering the storm of the pandemic very well and we remain confident about the outlook for the year ahead."

"Overall, Tapestry is weathering the storm of the pandemic very well and we remain confident about the outlook for the year ahead."

Tapestry Inc, the owner of brands including Coach and Kate Spade, has booked a 4% jump in second quarter net income to US$311m from $299m a year earlier, which it attributes to the successful execution of its turnaround efforts.

While sales declined 7% to US$1.68bn, the group drove triple-digit e-commerce growth versus the prior year, with digital representing approximately one-third of global sales, including nearly half of revenue in North America. It also posted over a 30% year-over-year revenue growth in Mainland China, boosted by record sales in Alibaba's annual shopping event.

The company's Acceleration Program was launched last year and aims to sharpen its focus on the consumer, leverage data to lead with a digital-first mindset and transform into a leaner and more responsive organisation. There were 18 net store closures in the fiscal first half, representing a net decrease of 84 stores from the prior year. Tapestry says it remains on track to achieve gross run-rate savings of $300m, including gross savings of $200m in fiscal 2021.

"Through these initiatives, the company is better meeting the needs of each of its brands' unique customers to drive engagement and desire for its products, creating a strong foundation for profitable expansion," it says.

In terms of its individual brands, net sales for Coach fell 4% to $1.23bn in the fiscal second quarter; Kate Spade declined 13% to $376m, including the impact of a pullback in lower margin wholesale disposition sales; and net sales for Stuart Weitzman tumbled 27% to $85m.

While the group is not providing detailed guidance for fiscal 2021, given its better-than-anticipated results in the first half and assuming a continued recovery emerging from the pandemic, it now expects full-year revenue to increase at a high-single-digit rate on a 52-week basis and around 10% on a 53-week basis.

"As we enter the second half of our fiscal year, we are optimistic for the future in spite of the uncertain backdrop. We are listening closely to consumers and responding in real-time to changes in their values, shopping behaviours, and brand engagement," says said CEO Joanne Crevoisera. "We are leaning into the competitive advantages of our platform, bringing innovation to both product and how we connect with customers. As a result, we are driving demand for our categories and stretching what's possible for our brands."

Commenting on the numbers, Neil Saunders, managing director of GlobalData, says: "While sales growth remains in negative territory, today's results show that Tapestry is on a trajectory to recovery. There is clearly momentum across most of the brands which allowed the business to exit the quarter with revenue down by a relatively modest 7.2%. As has been the case for many luxury and apparel brands, leaner inventory has reduced the volume of discounting which in turn has pushed up margins and profitability. Despite the decline in sales, Tapestry posted a 4.1% uplift in net income compared to last year which, in our view, is a very respectable outcome.

"Overall, Tapestry is weathering the storm of the pandemic very well and we remain confident about the outlook for the year ahead."