Tapestry Beats on Top and Bottom Lines in Fiscal 2Q18


Feb. 8 2018, Published 11:06 a.m. ET

Series snapshot

New York–based Tapestry (TPR) reported its fiscal 2Q18 earnings results on February 6, 2018. The results relate to the three-month period that ended on December 30, 2017. Tapestry cruised ahead of Wall Street’s top and bottom line expectations. Its adjusted diluted EPS (earnings per share) rose 43% to $1.07, $0.18 higher than analysts’ consensus estimate.

The company’s sales rose 35% to $1.8 billion in the quarter, beating analysts’ estimate by $20 million. Management lifted its full-year guidance following the results. In the first few parts of this series, we’ll talk more about the company’s financial performance and its revised outlook.

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Stock market reaction

Tapestry’s solid fiscal 2Q18 results drove its stock price higher. The company’s shares jumped 9% to close at $49.02 during the February 6 trading session. TPR is now among the best-performing apparel stocks of the year.

The handbag maker is trading at 18x on a next-12-month earnings basis, in-line with its three-year average of 18.1x. Though its close competitor Michael Kors (KORS) is a bit cheaper at 16.5x, Tapestry’s valuations are more appealing. Later on in this series, we’ll discuss the company’s valuations and its recent stock market performance.

Wall Street’s reaction to TPR’s results

Tapestry’s results didn’t result in any rating changes, but a large number of analysts raised their price targets on the company. Read the last part of the series to learn more.

About Tapestry

Established in 1941, Tapestry is a leading luxury fashion and accessory brand. The company changed its name from Coach to Tapestry in October 2017 to reflect the multiple brands under its umbrella, including Coach, Kate Spade, and Stuart Weitzman. The company acquired leading handbag maker Kate Spade in July last year. It acquired Stuart Weitzman, a premium footwear company, in 2015.

Investors looking to invest in TPR through ETFs can choose to invest in the WisdomTree MidCap Dividend ETF (DON). TPR has a weight of ~1.1% in DON.


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