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Tapestry (TPR) to Report Q2 Earnings: What Awaits the Stock?
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Tapestry, Inc. (TPR - Free Report) is likely to register a decline in the top line when it reports second-quarter fiscal 2021 numbers on Feb 4, before the market opens. The Zacks Consensus Estimate for revenues is pegged at $1,625 million, suggesting a decline of 10.5% from the prior-year reported figure. Nonetheless, we note that the rate of sales decline is likely to decelerate sharply on a sequential basis. The company had witnessed a decline of 14% in the last-reported quarter.
The Zacks Consensus Estimate for earnings for the quarter under review has increased by a penny to 99 cents over the past seven days. The current Zacks Consensus Estimate indicates a sharp improvement from earnings of 58 cents reported in the first quarter. However, the figure suggests a decline from $1.10 posted in the year-ago quarter.
Notably, the provider of luxury accessories and branded lifestyle products has a trailing four-quarter earnings surprise of 38.8%, on average. In the last reported quarter, the company’s bottom line outperformed the Zacks Consensus Estimate by a significant margin.
Tapestry’s second-quarter performance is likely to have benefited from its Acceleration Program aimed at transforming the company into a leaner and more responsive organization. The company's focus on enhancing omni-channel and e-commerce capabilities, and optimizing cost structure might get reflected in the to-be-reported quarter’s results.
The company’s attempt to lower promotional activity and improve Average Unit Retail across brands remains noteworthy. These are likely to have cushioned gross margin. Notably, the company has been targeting reductions in SG&A expenses and right sizing store fleet.
Additionally, Mainland China remains a bright spot for the company, and is likely to have contributed to the company’s top line. The company has been accelerating growth in the region through tailored and innovative product assortments, enhanced marketing and expanded reach across direct channels and third-party online distribution.
Undeniably, aforementioned factors raise optimism. However, industry experts also cautioned that a highly promotional environment, soft store traffic and uncertainty related to consumer shopping dynamics are some of the issues that the company might have encountered in the to-be-reported quarter.
We note that the Zacks Consensus Estimate for second-quarter revenues at Coach, Kate Spade and Stuart Weitzman brands are pegged at $1,166 million, $368 million and $81 million, indicating declines of 8.2%, 14.5% and 30%, respectively, year over year.
What the Zacks Model Unveils
Our proven model predicts an earnings beat for Tapestry this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Tapestry has a Zacks Rank #1 and an Earnings ESP of +4.06%.
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:
L Brands (LB - Free Report) has an Earnings ESP of +5.27% and a Zacks Rank #3.
Genesco (GCO - Free Report) has an Earnings ESP of +1.63% and a Zacks Rank #3.
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Tapestry (TPR) to Report Q2 Earnings: What Awaits the Stock?
Tapestry, Inc. (TPR - Free Report) is likely to register a decline in the top line when it reports second-quarter fiscal 2021 numbers on Feb 4, before the market opens. The Zacks Consensus Estimate for revenues is pegged at $1,625 million, suggesting a decline of 10.5% from the prior-year reported figure. Nonetheless, we note that the rate of sales decline is likely to decelerate sharply on a sequential basis. The company had witnessed a decline of 14% in the last-reported quarter.
The Zacks Consensus Estimate for earnings for the quarter under review has increased by a penny to 99 cents over the past seven days. The current Zacks Consensus Estimate indicates a sharp improvement from earnings of 58 cents reported in the first quarter. However, the figure suggests a decline from $1.10 posted in the year-ago quarter.
Notably, the provider of luxury accessories and branded lifestyle products has a trailing four-quarter earnings surprise of 38.8%, on average. In the last reported quarter, the company’s bottom line outperformed the Zacks Consensus Estimate by a significant margin.
Tapestry, Inc. Price, Consensus and EPS Surprise
Tapestry, Inc. price-consensus-eps-surprise-chart | Tapestry, Inc. Quote
Factors to Note
Tapestry’s second-quarter performance is likely to have benefited from its Acceleration Program aimed at transforming the company into a leaner and more responsive organization. The company's focus on enhancing omni-channel and e-commerce capabilities, and optimizing cost structure might get reflected in the to-be-reported quarter’s results.
The company’s attempt to lower promotional activity and improve Average Unit Retail across brands remains noteworthy. These are likely to have cushioned gross margin. Notably, the company has been targeting reductions in SG&A expenses and right sizing store fleet.
Additionally, Mainland China remains a bright spot for the company, and is likely to have contributed to the company’s top line. The company has been accelerating growth in the region through tailored and innovative product assortments, enhanced marketing and expanded reach across direct channels and third-party online distribution.
Undeniably, aforementioned factors raise optimism. However, industry experts also cautioned that a highly promotional environment, soft store traffic and uncertainty related to consumer shopping dynamics are some of the issues that the company might have encountered in the to-be-reported quarter.
We note that the Zacks Consensus Estimate for second-quarter revenues at Coach, Kate Spade and Stuart Weitzman brands are pegged at $1,166 million, $368 million and $81 million, indicating declines of 8.2%, 14.5% and 30%, respectively, year over year.
What the Zacks Model Unveils
Our proven model predicts an earnings beat for Tapestry this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Tapestry has a Zacks Rank #1 and an Earnings ESP of +4.06%.
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:
Foot Locker (FL - Free Report) has an Earnings ESP of +2.40% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
L Brands (LB - Free Report) has an Earnings ESP of +5.27% and a Zacks Rank #3.
Genesco (GCO - Free Report) has an Earnings ESP of +1.63% and a Zacks Rank #3.
Legal Marijuana: An Investor’s Dream
Imagine getting in early on a young industry primed to skyrocket from $17.7 billion in 2019 to an expected $73.6 billion by 2027.
Although marijuana stocks did better as the pandemic took hold than the market as a whole, they’ve been pushed down. This is exactly the right time to get in on selected strong companies at a fraction of their value before COVID struck. Zacks’ Special Report, Marijuana Moneymakers, reveals 10 exciting tickers for urgent consideration.
Download Marijuana Moneymakers FREE >>