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.
Factors Likely to Decide Tapestry's (TPR) Fate in Q1 Earnings
Read MoreHide Full Article
Tapestry, Inc. (TPR - Free Report) , which was formerly known as Coach, Inc., is expected to release first-quarter fiscal 2018 results on Nov 7. In the trailing four quarters, this designer and marketer of fine accessories and gifts as well as house of lifestyle brands, has outperformed the Zacks Consensus Estimate by an average of 2.9%. In the preceding quarter, the company witnessed a positive earnings surprise of 2%.
Investors are keeping their fingers crossed and hoping that Tapestry surpasses earnings estimate in the to-be-reported quarter as well. Let’s delve deep and find out the factors impacting the results.
How are Estimates Shaping Up?
After registering an increase of 11% in the bottom line, Tapestry is likely to witness a year-over-year decline in the first quarter of fiscal 2018. The current Zacks Consensus Estimate for the quarter under review is 36 cents compared with 45 cents posted in the year-ago period. We note that the Zacks Consensus Estimate has remained stable in the past 30 days.
Meanwhile, analysts surveyed by Zacks expect revenues of $1,302 million up from $1,038 million reported in the year-ago quarter. The year-over-year increase in the top line may come as a big relief for investors, as the company’s net sales have declined 1.8% and 4% in the fourth and third quarter of fiscal 2017, respectively.
Factors at Play
Sluggish mall traffic, increased online competition and aggressive pricing strategy are headwinds plaguing the industry, and Tapestry is not immune to it. These along with Kate Spade integration-related costs are likely to hurt the margins and consequently the bottom line.
Nevertheless, Tapestry looks much more disciplined in its approach to adapt to the changing retail landscape. The company is undergoing a brand transformation and introducing modern luxury concept stores in key markets. The acquisitions of Stuart Weitzman and Kate Spade are being viewed as a significant step in efforts toward becoming a multi-brand company. Moreover, management has undertaken transformation initiatives revolving around product, stores and marketing, which are likely to have a favorable impact in the quarter to be reported.
Tapestry also registered positive comps at its North American segment for the fifth consecutive quarter and sees growth prospects in China, Japan and Europe.
What Does the Zacks Model Unveil?
Our proven model shows 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 carries a Zacks Rank #3 and has an Earnings ESP of +0.65%. This makes us reasonably confident that bottom line is likely to outperform the estimate.
Other Stocks with Favorable Combination
Here are some other companies you may want to consider as our model shows that these too have the right combination of elements to post an earnings beat:
The Home Depot, Inc. (HD - Free Report) has an Earnings ESP of +0.76% and a Zacks Rank #2.
Wal-Mart Stores, Inc. (WMT - Free Report) has an Earnings ESP of +0.26% and a Zacks Rank #3.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
Image: Bigstock
Factors Likely to Decide Tapestry's (TPR) Fate in Q1 Earnings
Tapestry, Inc. (TPR - Free Report) , which was formerly known as Coach, Inc., is expected to release first-quarter fiscal 2018 results on Nov 7. In the trailing four quarters, this designer and marketer of fine accessories and gifts as well as house of lifestyle brands, has outperformed the Zacks Consensus Estimate by an average of 2.9%. In the preceding quarter, the company witnessed a positive earnings surprise of 2%.
Investors are keeping their fingers crossed and hoping that Tapestry surpasses earnings estimate in the to-be-reported quarter as well. Let’s delve deep and find out the factors impacting the results.
How are Estimates Shaping Up?
After registering an increase of 11% in the bottom line, Tapestry is likely to witness a year-over-year decline in the first quarter of fiscal 2018. The current Zacks Consensus Estimate for the quarter under review is 36 cents compared with 45 cents posted in the year-ago period. We note that the Zacks Consensus Estimate has remained stable in the past 30 days.
Meanwhile, analysts surveyed by Zacks expect revenues of $1,302 million up from $1,038 million reported in the year-ago quarter. The year-over-year increase in the top line may come as a big relief for investors, as the company’s net sales have declined 1.8% and 4% in the fourth and third quarter of fiscal 2017, respectively.
Factors at Play
Sluggish mall traffic, increased online competition and aggressive pricing strategy are headwinds plaguing the industry, and Tapestry is not immune to it. These along with Kate Spade integration-related costs are likely to hurt the margins and consequently the bottom line.
Nevertheless, Tapestry looks much more disciplined in its approach to adapt to the changing retail landscape. The company is undergoing a brand transformation and introducing modern luxury concept stores in key markets. The acquisitions of Stuart Weitzman and Kate Spade are being viewed as a significant step in efforts toward becoming a multi-brand company. Moreover, management has undertaken transformation initiatives revolving around product, stores and marketing, which are likely to have a favorable impact in the quarter to be reported.
Tapestry also registered positive comps at its North American segment for the fifth consecutive quarter and sees growth prospects in China, Japan and Europe.
What Does the Zacks Model Unveil?
Our proven model shows 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 carries a Zacks Rank #3 and has an Earnings ESP of +0.65%. This makes us reasonably confident that bottom line is likely to outperform the estimate.
Other Stocks with Favorable Combination
Here are some other companies you may want to consider as our model shows that these too have the right combination of elements to post an earnings beat:
Burlington Stores, Inc. (BURL - Free Report) has an Earnings ESP of +1.58% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Home Depot, Inc. (HD - Free Report) has an Earnings ESP of +0.76% and a Zacks Rank #2.
Wal-Mart Stores, Inc. (WMT - Free Report) has an Earnings ESP of +0.26% and a Zacks Rank #3.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
See the pot trades we're targeting>>