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Tapestry Outlook Misses Estimates at Midpoint Following Fourth-Quarter Earnings Beat

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Tapestry Outlook Misses Estimates at Midpoint Following Fourth-Quarter Earnings Beat

Tapestry (TPR) provided a full-year outlook below Wall Street's estimates at the midpoint on Thursday, while the Coach and Kate Spade parent reported stronger-than-expected fiscal fourth-quarter earnings.

The luxury fashion company anticipates adjusted revenue between $8.4 billion and $8.5 billion for fiscal 2027, representing mid-single-digit growth from the previous year. The guidance's midpoint of $8.45 billion trails the current consensus on FactSet of $8.47 billion.

The guidance assumes a high-single-digit gain at Coach and a high-single-digit decline at Kate Spade, Chief Financial Officer Scott Roe said during an earnings call, according to a FactSet transcript.

In fiscal 2026, group sales grew 14% on a reported basis to $8 billion, and 18% excluding the Stuart Weitzman business sold last year.

Adjusted earnings are pegged at $7.80 to $7.90 a share for the ongoing fiscal year, reflecting a low-double-digit increase from last year's $7.05. The Street is looking for $7.87, which is higher than the $7.85 midpoint of the company's forecast.

"We continue to operate in an environment of macro uncertainty and evolving tariffs dynamics, alongside shifts in the cadence of our marketing investments," Roe told analysts. "As a result, quarterly profitability will be uneven with tariffs providing a modest benefit in the first half of the year before becoming a headwind in the second half."

The stock tumbled 16% in Thursday trade.

UBS Securities expected Tapestry to provide a solid outlook, which would help boost investor sentiment, according to a note sent last week.

For the quarter ended June 27, Tapestry's adjusted EPS climbed 28% to $1.32, topping the average analyst estimate of $1.28. Sales improved 9% to $1.88 billion, just ahead of the Street's view for $1.87 billion. Excluding the Stuart Weitzman brand, sales increased 12%.

Revenue at the Coach brand advanced 15% to $1.64 billion in the quarter, while Kate Spade logged a 7% drop to $235.1 million.

For the ongoing quarter, Tapestry expects EPS of about $1.55, representing low-teens growth versus the prior-year period. Revenue is anticipated to increase by high-single-digits from the 2025 quarter's pro forma figure. The Street is estimating adjusted and GAAP EPS of $1.49 and $1.48, respectively, as well as sales of $1.8 billion.

Last week, Michael Kors and Jimmy Choo owner Capri (CPRI) lowered its fiscal 2027 revenue outlook, while luxury apparel maker Ralph Lauren (RL) reported higher-than-expected fiscal first-quarter sales.

Price: $130.40, Change: $-23.34, Percent Change: -15.18%

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