Have you evaluated the performance of Tapestry's (TPR Quick QuoteTPR - Free Report) international operations for the quarter ending June 2024? Given the extensive global presence of this maker of high-end shoes and handbags, analyzing the patterns in international revenues is crucial for understanding its financial strength and potential for growth.

In the modern, closely-knit global economic landscape, the capacity of a business to access foreign markets is often a key determinant of its financial well-being and growth path. Investors now place great importance on grasping the extent of a company's dependence on international markets, as it sheds light on the firm's earnings stability, its skill in leveraging various economic cycles and its broad growth potential.

International market involvement serves as insurance against economic downturns at home and enables engagement with economies that are growing more quickly. Still, this move toward diversification is not without its challenges, as it involves navigating through the fluctuations of currencies, geopolitical threats, and the distinctive nature of various markets.

Upon examining TPR's recent quarterly performance, we noticed several interesting patterns in the revenue generated from its international segments, which are commonly analyzed and observed by Wall Street experts.

The company's total revenue for the quarter amounted to $1.59 billion, marking a decrease of 1.8% from the year-ago quarter. We will next turn our attention to dissecting TPR's international revenue to get a clearer picture of how significant its operations are outside its main base.

A Dive into TPR's International Revenue Trends

During the quarter, Other International contributed $124.7 million in revenue, making up 7.8% of the total revenue. When compared to the consensus estimate of $118.8 million, this meant a surprise of +4.97%. Looking back, Other International contributed $102.6 million, or 6.9%, in the previous quarter, and $102.6 million, or 6.3%, in the same quarter of the previous year.

Greater China generated $232.4 million in revenues for the company in the last quarter, constituting 14.6% of the total. This represented a surprise of +1.31% compared to the $229.4 million projected by Wall Street analysts. Comparatively, in the previous quarter, Greater China accounted for $270.9 million (18.3%), and in the year-ago quarter, it contributed $268.2 million (16.6%) to the total revenue.

Other Asia accounted for 5.4% of the company's total revenue during the quarter, translating to $86.2 million. Revenues from this region represented a surprise of -61.71%, with Wall Street analysts collectively expecting $225.14 million. When compared to the preceding quarter and the same quarter in the previous year, Other Asia contributed $234.9 million (15.9%) and $219.8 million (13.6%) to the total revenue, respectively.

International Revenue Predictions

Wall Street analysts expect Tapestry to report a total revenue of $1.47 billion in the current fiscal quarter, which suggests a decline of 2.7% from the prior-year quarter. Revenue shares from Other International, Greater China and Other Asia are predicted to be 8.1%, 14.8% and 14.4%, corresponding to amounts of $119.85 million, $218.07 million and $211.26 million, respectively.

Analysts expect the company to report a total annual revenue of $6.7 billion for the full year, marking an increase of 0.5% compared to last year. The expected revenue contributions from Other International, Greater China and Other Asia are projected to be 7.7% ($514.09 million), 15.3% ($1.02 billion) and 13.8% ($925.44 million) of the total revenue, in that order.

Closing Remarks

Relying on global markets for revenues presents both prospects and challenges for Tapestry. Therefore, scrutinizing its international revenue trends is key to effectively forecasting the company's future outlook.

In an era of growing international interdependencies and escalating geopolitical disputes, Wall Street analysts are vigilant in tracking these trends for businesses with a global reach, in order to refine their predictions of earnings. It should be noted, however, that a multitude of other elements, such as a company's domestic position, also play a significant role in shaping the earnings forecasts.

At Zacks, a company's changing earnings outlook is given considerable attention due to its proven, strong influence on a stock's price performance in the near term. The connection here is straightforward and positive: when earnings estimates are revised upward, the stock price generally follows suit, increasing as well.

Our proprietary stock rating tool, the Zacks Rank, with its externally validated exceptional track record, harnesses the power of earnings estimate revisions to serve as a dependable measure for anticipating the short-term price trends of stocks.

Tapestry, bearing a Zacks Rank #3 (Hold), is expected to mirror the broader market's movements in the near term. You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

A Review of Tapestry's Recent Stock Market Performance

Over the past month, the stock has seen an increase of 3.5% in its value, whereas the Zacks S&P 500 composite has posted an increase of 2.5%. The Zacks Retail-Wholesale sector, Tapestry's industry group, has ascended 1.3% over the identical span. In the past three months, there's been a decline of 7% in the company's stock price, against a rise of 6.5% in the S&P 500 index. The broader sector has increased by 3.5% during this interval.