Tapestry’s Stock Slides on Earnings Forecast Cut

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Tapestry ($NYSE:TPR), Inc. is an American luxury fashion house. The company operates under five brands: Coach, Kate Spade, Stuart Weitzman, and Tapestry Collection. Tapestry’s stock slid during Thursday’s premarket trading as a cut to earnings forecasts overshadowed a stronger than expected Q1 report. The luxury retailer reported narrow beats on top and bottom lines for its fiscal first quarter, led by a recovery in international sales.

However, the company noted continued margin pressures that resulted in a 220 basis point contraction in gross margins from the prior year period. “While we are pleased with our first quarter results, we are executing against a backdrop of continued macroeconomic headwinds, particularly in Europe,” said CEO Joanne Crevoiserat on the company’s earnings call.

Earnings

Tapestry’s stock slides on earnings forecast cut. In its earning report of FY2022 Q4 ending June 30, TAPESTRY earned 6684.5M USD in total revenue, earned 856.3M USD in net income. Compared to previous year, 16.3% increase in total revenue, 2.6% increase in net income. TAPESTRY’s total revenue reached from 4961.4M USD to 6684.5M USD in the last 3 years.

Market Price

On Thursday, TAPESTRY stock opened at $31.3 and closed at $32.5, up by 4.2% from previous closing price of 31.2. This follows a string of bad news for the company, including the ousting of its CEO, Victor Luis.

VI Analysis

Tapestry, Inc. is a luxury fashion house best known for its Coach and Kate Spade brands. The company’s fundamentals reflect its long-term potential, but its financial and business risk rating from VI App is high. The app has detected three risk warnings in the company’s income sheet, balance sheet, and non-financials. Register on vi.app to check it out.

VI Peers

In the luxury goods industry, Tapestry Inc. competes against companies like CCC SA, Prada SpA, and Nordstrom Inc. While each company has its own unique strengths, Tapestry Inc. has been able to compete effectively by offering a combination of high-quality products, exclusive designs, and excellent customer service. As a result, Tapestry Inc. has been able to maintain a loyal customer base and grow its business.

– CCC SA ($LTS:0LS5)

CCA SA is a Chile-based holding company engaged in the telecommunications sector. The Company’s main shareholder is América Móvil, S.A.B. de C.V. (AMX), through its subsidiary Telmex Internacional, S.A.B. de C.V. (Telmex). CCA SA’s subsidiaries include VTR Chile S.A., an operator of a pay television and Internet service; VTR Banda Ancha Ltda., a provider of broadband Internet; Willax TV Ltda., an over-the-air television broadcaster; Nextel Chile Ltda., a provider of digital mobile radio communications services; and Núcleo Ltda., a provider of telecommunications infrastructure.

– Prada SpA ($SEHK:01913)

Prada SpA is an Italian luxury fashion house that designs, manufactures, and markets men’s and women’s clothing, footwear, handbags, and other accessories. The company has a market cap of 96.72B as of 2022 and a Return on Equity of 11.91%. Prada was founded in 1913 by Mario Prada and is currently headed by Miuccia Prada. The company’s products are sold through its own boutiques, department stores, and online.

– Nordstrom Inc ($NYSE:JWN)

Nordstrom, Inc. is a leading fashion retailer offering quality apparel, shoes, and accessories for men, women, and children. Nordstrom operates more than 120 stores in the United States and Canada, and also has an e-commerce business. The company’s strong performance is due in part to its focus on customer service and providing a unique shopping experience. Nordstrom’s market cap is 3.15B as of 2022, and its ROE is 70.09%. Nordstrom is a publicly traded company on the Nasdaq stock exchange.

Summary

If you’re looking for a luxury handbag company with a strong brand, Tapestry is worth considering. The company’s Coach and Kate Spade brands are both well-regarded, and its growth prospects remain solid.

However, Tapestry is not without risk. The company’s shares have been volatile in recent years, and its earnings forecast was cut earlier this year. Nevertheless, Tapestry remains a strong luxury brand, and its share price could rebound in the future.