02:36 PM EDT, 05/09/2024 (MT Newswires) -- Tapestry (TPR) lowered its fiscal 2024 revenue guidance while reiterating its earnings forecast on Thursday following mixed third-quarter results, with the top line impacted by year-over-year declines in North America and China.

The operator of luxury brands Coach, Kate Spade and Stuart Weitzman now expects full-year revenue to be roughly flat from 2023 at $6.6 billion, reduced from a prior view of $6.7 billion. The Capital IQ-polled analyst forecast is for revenue of $6.65 billion in the fiscal year ending in June.

"We're modifying our top line outlook to incorporate more moderate trends in both North America and Greater China across brands," Chief Financial Officer Scott Roe told analysts on a conference call, according to a Capital IQ transcript.

The company continues to see earnings per share rising 8% to 9% from the prior year to between $4.20 and $4.25. The consensus is for normalized EPS of $4.23. The reiterated bottom-line outlook is "supported by stronger margin results," Roe said. Shares of Tapestry were up 3% in afternoon trade.

For the third quarter, revenue dipped to $1.48 billion from $1.51 billion a year ago and missed the $1.5 billion Wall Street view. Adjusted earnings per share edged up to $0.81 for the three months ended March 30 from $0.78 and beat the $0.68 Capital IQ estimate.

Revenue was pulled lower by a 3% decline in North America that reflected "a challenging consumer backdrop," Chief Executive Joanne Crevoiserat said on the call. Gross margin in the region nevertheless "rose significantly and outperformed," Roe said.

In Greater China, revenue slid 2% as the company lapped strong performance in the same quarter of 2023 following the country's post-COVID reopening, according to Roe.

"We remain confident in the long-term opportunity in China despite a more gradual recovery in the region than originally expected, and we continue to invest in our brands, teams and platforms to support our growth," Crevoiserat said.

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