Tapestry Inc (NYSE:TPR) beat quarterly earnings estimates but revenues were lower than forecast and the owner of Kate Spade and Coach fashion brands lowered its sales outlook for the rest of the year.
In what was the group's fiscal third quarter, total revenue of $1.48 billion was down 2% on the prior year, although flat if excluding currency effects, both at the low-end of previous guidance.
There was a decline in direct-to-consumer sales, offset by growth in international wholesale.
Europe saw sales gains of 19%, but North America was down 3%, amidst a "challenging consumer backdrop", and China declined 2%
Earning per share of $0.82 on an adjusted basis, were much higher than the average Wall Street estimate of $0.67.
The company has agreed a $8.5 billion takeover of Versace and Jimmy Choo owner Capri Holdings but the US antitrust watchdog has sued to block the deal.
Last month the US Federal Trade Commission said the deal would "eliminate direct head-to-head competition" between the pair's brands and give Tapestry a dominant share of the 'accessible luxury' handbag market.
Tapestry said in its earnings statement 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, working expeditiously to close the transaction in calendar year 2024".
Forward guidance for the full year was updated to "over $6.6 billion", down from the previous outlook of circa $6.7 billion, though management kept its EPS guidance at $4.20-4.25.
Shares fell in early trades but rose as the session wore on.