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Will Wall Street See a Q4 Earnings Beat From Tapestry (TPR)?
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Tapestry, Inc. (TPR - Free Report) is slated to release fourth-quarter fiscal 2018 results on Aug 14. 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 by an average of 12.8%. In the last reported quarter, the company delivered a positive earnings surprise of 8%.
Investors are counting on another estimate beat by Tapestry in the to-be-reported quarter. Let’s delve deep and take a look at the factors that will be influencing the results.
Factors at Play
Tapestry looks 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. Its long-term growth drivers include expansion of its global distribution model and venturing into under-penetrated markets. Further, the company launched Coach Create, a platform to customize bags either online or in outlets. Further, it relaunched Signature in retail and expanded offering in sport category. The company also launched smartwatch with Fossil.
Additionally, 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 Tapestry is not fully immune to it.
Nonetheless, management is viewing the acquisitions of Stuart Weitzman and Kate Spade as a significant step 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 on fourth-quarter results.
However, in the last reported quarter, management highlighted that delay in production and lower sell-through of important carryover styles hurt Stuart Weitzman sales and margins. Management also hinted that some of these issues may persist through the Fall/Winter season and added that sales and profitability may continue to remain under pressure in the final quarter.
Management had earlier projected fiscal 2018 revenue to increase approximately 30% year over year to $5.8-$5.9 billion. The company had previously forecasted earnings in the band of $2.57-$2.60 per share, reflecting an increase of approximately 19-21%.
After registering bottom-line increase of 17% in the third quarter, Tapestry is likely to record year-over-year growth in the fourth quarter of fiscal 2018 as well. The Zacks Consensus Estimates for the quarter under review are pegged at 56 cents compared with 50 cents reported in the year-ago quarter. We note that the Zacks Consensus Estimate has decreased by a penny in the last 30 days.
Analysts polled by Zacks now project revenues of $1,464 million, up from $1,133.8 million in the year-ago quarter. If all goes well, this will be the third straight quarter of top-line beat.
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 has a Zacks Rank #3 and an Earnings ESP of +0.44%. This makes us reasonably confident of an earnings beat.
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 TJX Companies, Inc. (TJX - Free Report) has an Earnings ESP of +1.04% and a Zacks Rank #2.
Nordstrom, Inc. (JWN - Free Report) has an Earnings ESP of +0.75% and a Zacks Rank #3.
Wall Street’s Next Amazon
Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.
Image: Bigstock
Will Wall Street See a Q4 Earnings Beat From Tapestry (TPR)?
Tapestry, Inc. (TPR - Free Report) is slated to release fourth-quarter fiscal 2018 results on Aug 14. 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 by an average of 12.8%. In the last reported quarter, the company delivered a positive earnings surprise of 8%.
Investors are counting on another estimate beat by Tapestry in the to-be-reported quarter. Let’s delve deep and take a look at the factors that will be influencing the results.
Factors at Play
Tapestry looks 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. Its long-term growth drivers include expansion of its global distribution model and venturing into under-penetrated markets. Further, the company launched Coach Create, a platform to customize bags either online or in outlets. Further, it relaunched Signature in retail and expanded offering in sport category. The company also launched smartwatch with Fossil.
Additionally, 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 Tapestry is not fully immune to it.
Nonetheless, management is viewing the acquisitions of Stuart Weitzman and Kate Spade as a significant step 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 on fourth-quarter results.
However, in the last reported quarter, management highlighted that delay in production and lower sell-through of important carryover styles hurt Stuart Weitzman sales and margins. Management also hinted that some of these issues may persist through the Fall/Winter season and added that sales and profitability may continue to remain under pressure in the final quarter.
Management had earlier projected fiscal 2018 revenue to increase approximately 30% year over year to $5.8-$5.9 billion. The company had previously forecasted earnings in the band of $2.57-$2.60 per share, reflecting an increase of approximately 19-21%.
Tapestry, Inc. Price, Consensus and EPS Surprise
Tapestry, Inc. Price, Consensus and EPS Surprise | Tapestry, Inc. Quote
How Are Estimates Faring?
After registering bottom-line increase of 17% in the third quarter, Tapestry is likely to record year-over-year growth in the fourth quarter of fiscal 2018 as well. The Zacks Consensus Estimates for the quarter under review are pegged at 56 cents compared with 50 cents reported in the year-ago quarter. We note that the Zacks Consensus Estimate has decreased by a penny in the last 30 days.
Analysts polled by Zacks now project revenues of $1,464 million, up from $1,133.8 million in the year-ago quarter. If all goes well, this will be the third straight quarter of top-line beat.
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 has a Zacks Rank #3 and an Earnings ESP of +0.44%. This makes us reasonably confident of an earnings beat.
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:
Ross Stores, Inc. (ROST - Free Report) has an Earnings ESP of +2.72% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
The TJX Companies, Inc. (TJX - Free Report) has an Earnings ESP of +1.04% and a Zacks Rank #2.
Nordstrom, Inc. (JWN - Free Report) has an Earnings ESP of +0.75% and a Zacks Rank #3.
Wall Street’s Next Amazon
Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.
Click for details >>