Why Tapestry Won't Maintain Its Better-Than-Expected Results

Luxury goods is a growing global retail segment, and some of the best-known brands in the industry -- Coach, Kate Spade, and Stuart Weitzman -- are owned by luxury goods company Tapestry (NYSE: TPR). But while the Coach brand continues to see revenue growth, the other, newly acquired brands have been creating a financial headache for the parent company.

The company, originally called Coach, changed its name to Tapestry with the $2.4 billion buyout of rival Kate Spade in 2017. It had already acquired high-end shoe brand Stuart Weitzman in 2015 for $574 million. While the company continues to tout the benefits of working through a sum of parts, it's not so clear that these acquisitions are working in its favor.

Total sales were down in the first quarter of fiscal 2020 to $1.36 billion from $1.38 billion in the prior-year period. While that's a blow, it doesn't tell the whole story.

Source Fool.com