12 May 2022
Coach Parent Tapestry Slashes Profit Outlook over COVID-19 Lockdowns in China
The Index Today
On Thursday, Coach’s owner Tapestry revealed that the COVID-19 lockdowns in China significantly affected its sales of luxury handbags and clothing, causing the company to slash its profit estimates for the year.
According to Reuters, the powerhouse, which also owns Kate Spade, trimmed its forecasts in the wake of similar cautions from Ray-ban producer EssilorLuxottica and Gucci parent Kering regarding China’s Zero-COVID mandate which has disrupted the normal way of life, blocking highways, leaving factories suspended and workers helpless.
Tapestry now anticipates a full-year profit of $3.45 per share, down from its previous projection of $3.60 to $3.65 a share. The fashion company is also facing mounting costs spurred by the lockdowns in China exacerbating supply chain disruptions stemming from the majority of Coach and Kate Spade products being produced in Asia, including Vietnam and mainland China, reported Reuters.