We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Check Out Tapestry's (TPR) Probability to Beat in Q2 Earnings
Read MoreHide Full Article
Tapestry, Inc. (TPR - Free Report) is slated to release second-quarter fiscal 2019 results on Feb 7. In the trailing four quarters, this house of lifestyle brands as well as designer and marketer of fine accessories and gifts has outperformed the Zacks Consensus Estimate, recording average positive earnings surprise of 11.7%. In the last reported quarter, the company delivered a positive earnings surprise of 9.1%.
After registering bottom-line increase of 14% in the first quarter of fiscal 2019, Tapestry is likely to deliver year-over-year growth of about 3.7% in the second quarter of fiscal 2019. The Zacks Consensus Estimate for the quarter under review is pegged at $1.11 compared with $1.07 reported in the year-ago quarter. We note that the Zacks Consensus Estimate has remained stable in the last 30 days.
The Zacks Consensus Estimate for revenues stands at $1,860 million, up from $1,785 million in the year-ago quarter. If all goes well, this will be the fifth straight quarter of top-line beat.
Factors Likely to Influence Tapestry’s Performance
Multi-Brand Strategy Likely to Lift Top Line
Tapestry looks quite disciplined in its approach to adapt to the changing retail landscape. Management has undertaken transformation initiatives revolving around product, stores and marketing, which are likely to have a favorable impact on second-quarter results. The company is undergoing a brand transformation and introducing modern luxury concept stores in key markets. Acquisitions of Stuart Weitzman and Kate Spade are a significant step toward becoming a multi-brand company.
The Zacks Consensus Estimate of sales for Coach, Kate Spade and Stuart Weitzman brands reflects likely growth of 1.6%, 12.3% and 1.9% to $1,249 million, $488 million and $123 million, respectively.
Direct Control Over International Distribution to Play Crucial Role
Management has undertaken initiatives to have direct control over international distribution. The company concluded the buybacks of the Kate Spade operations in Singapore, Malaysia and Australia. It also completed the buyback of the Stuart Weitzman business in Southern China. The company had earlier hinted that it has entered into a deal to acquire the Stuart Weitzman business in Australia from its distribution partner. Such moves aid the company to directly operate these businesses, look for growth opportunities in international markets and enhance brand development.
The company is aggressively expanding its e-commerce platform. Tapestry also plans to undertake strategic measures involving the upgrade of core technology platforms and enhancement of international supply chain. However, sluggish mall traffic, increased online competition and aggressive pricing strategy are affecting the industry, and the company is not fully immune to it. Moreover, the trade war between the United States and China poses a threat. Tapestry continues to focus on Asian markets, primarily China for long-term growth. Nonetheless, the company informed that its production of handbags and other leather goods remain less than 5% in China.
What the Zacks Model Unveils?
Our proven model does not conclusively show that Tapestry is likely to beat estimates this quarter. A stock needs to have both — a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) and a positive Earnings ESP — for this to happen. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Here are three companies you may want to consider as our model shows that these have the right combination of elements to post an earnings beat:
Foot Locker (FL - Free Report) has an Earnings ESP of +2.90% and a Zacks Rank #2.
Five Below (FIVE - Free Report) has an Earnings ESP of +0.45% and a Zacks Rank #2.
Dillard's, Inc. (DDS - Free Report) has an Earnings ESP of +14.44% and a Zacks Rank #3.
Today's Best Stocks from Zacks
Would you like to see the updated picks from our best market-beating strategies? From 2017 through 2018, while the S&P 500 gained +15.8%, five of our screens returned +38.0%, +61.3%, +61.6%, +68.1%, and +98.3%.
This outperformance has not just been a recent phenomenon. From 2000 – 2018, while the S&P averaged +4.8% per year, our top strategies averaged up to +56.2% per year.
Image: Bigstock
Check Out Tapestry's (TPR) Probability to Beat in Q2 Earnings
Tapestry, Inc. (TPR - Free Report) is slated to release second-quarter fiscal 2019 results on Feb 7. In the trailing four quarters, this house of lifestyle brands as well as designer and marketer of fine accessories and gifts has outperformed the Zacks Consensus Estimate, recording average positive earnings surprise of 11.7%. In the last reported quarter, the company delivered a positive earnings surprise of 9.1%.
After registering bottom-line increase of 14% in the first quarter of fiscal 2019, Tapestry is likely to deliver year-over-year growth of about 3.7% in the second quarter of fiscal 2019. The Zacks Consensus Estimate for the quarter under review is pegged at $1.11 compared with $1.07 reported in the year-ago quarter. We note that the Zacks Consensus Estimate has remained stable in the last 30 days.
The Zacks Consensus Estimate for revenues stands at $1,860 million, up from $1,785 million in the year-ago quarter. If all goes well, this will be the fifth straight quarter of top-line beat.
Factors Likely to Influence Tapestry’s Performance
Multi-Brand Strategy Likely to Lift Top Line
Tapestry looks quite disciplined in its approach to adapt to the changing retail landscape. Management has undertaken transformation initiatives revolving around product, stores and marketing, which are likely to have a favorable impact on second-quarter results. The company is undergoing a brand transformation and introducing modern luxury concept stores in key markets. Acquisitions of Stuart Weitzman and Kate Spade are a significant step toward becoming a multi-brand company.
The Zacks Consensus Estimate of sales for Coach, Kate Spade and Stuart Weitzman brands reflects likely growth of 1.6%, 12.3% and 1.9% to $1,249 million, $488 million and $123 million, respectively.
Direct Control Over International Distribution to Play Crucial Role
Management has undertaken initiatives to have direct control over international distribution. The company concluded the buybacks of the Kate Spade operations in Singapore, Malaysia and Australia. It also completed the buyback of the Stuart Weitzman business in Southern China. The company had earlier hinted that it has entered into a deal to acquire the Stuart Weitzman business in Australia from its distribution partner. Such moves aid the company to directly operate these businesses, look for growth opportunities in international markets and enhance brand development.
Tapestry, Inc. Price, Consensus and EPS Surprise
Tapestry, Inc. Price, Consensus and EPS Surprise | Tapestry, Inc. Quote
Other Factors Likely to Impact Results
The company is aggressively expanding its e-commerce platform. Tapestry also plans to undertake strategic measures involving the upgrade of core technology platforms and enhancement of international supply chain. However, sluggish mall traffic, increased online competition and aggressive pricing strategy are affecting the industry, and the company is not fully immune to it. Moreover, the trade war between the United States and China poses a threat. Tapestry continues to focus on Asian markets, primarily China for long-term growth. Nonetheless, the company informed that its production of handbags and other leather goods remain less than 5% in China.
What the Zacks Model Unveils?
Our proven model does not conclusively show that Tapestry is likely to beat estimates this quarter. A stock needs to have both — a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) and a positive Earnings ESP — for this to happen. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Tapestry has a Zacks Rank #3 but an Earnings ESP of -0.07%, which makes surprise prediction difficult. You can see the complete list of today’s Zacks #1 Rank stocks here.
3 Stocks With Favorable Combination
Here are three companies you may want to consider as our model shows that these have the right combination of elements to post an earnings beat:
Foot Locker (FL - Free Report) has an Earnings ESP of +2.90% and a Zacks Rank #2.
Five Below (FIVE - Free Report) has an Earnings ESP of +0.45% and a Zacks Rank #2.
Dillard's, Inc. (DDS - Free Report) has an Earnings ESP of +14.44% and a Zacks Rank #3.
Today's Best Stocks from Zacks
Would you like to see the updated picks from our best market-beating strategies? From 2017 through 2018, while the S&P 500 gained +15.8%, five of our screens returned +38.0%, +61.3%, +61.6%, +68.1%, and +98.3%.
This outperformance has not just been a recent phenomenon. From 2000 – 2018, while the S&P averaged +4.8% per year, our top strategies averaged up to +56.2% per year.
See their latest picks free >>