Tapestry Inc., the esteemed parent company of luxury brands like Coach, has recently seen a notable surge in its stock price, rising 9.2 percent after the release of its latest quarterly earnings report. With adjusted earnings per share hitting 92 cents, surpassing the 88 cents expected by analysts, Tapestry reported a revenue of $1.59 billion, slightly exceeding projections.

Amidst a backdrop of weak consumer confidence and inflation concerns, Tapestry’s ability to raise prices without sacrificing sales figures has piqued investor interest. During the pandemic, Coach implemented price increases to match high demand and inflation. These strategic hikes appear to have paid off, as the average prices for handbags and accessories have continued to rise, bolstering profitability.

However, there are challenges within Tapestry’s portfolio. The Kate Spade brand has underperformed, prompting Tapestry to appoint Eva Erdmann, a seasoned executive from L’Oréal and Christian Dior, to revitalize it. Her track record as a brand builder is anticipated to reinvigorate sales.

Furthermore, Tapestry remains committed to its proposed acquisition of Capri Holdings, valued at $8.5 billion. This deal is currently under scrutiny from the US Federal Trade Commission, adding a layer of uncertainty. Capri has struggled, reporting its seventh consecutive annual sales decline, leading to questions about whether the acquisition will proceed as planned.

With its strong earnings report, Tapestry is positioning itself for potential growth, providing valuable insights into the resilience of the luxury market amid economic challenges.