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Tapestry (TPR) Queued Up for Q1 Earnings: What to Expect

Tapestry's (TPR) first-quarter fiscal 2022 results might show gains from its Acceleration Program, immense brand strength and robust omni-channel capabilities.

This story originally appeared on Zacks

We expect Tapestry, Inc. TPR to report year-over-year increases in both the top and the bottom line when it releases first-quarter fiscal 2022 earnings on Nov 11, before market open.

The Zacks Consensus Estimate for the quarterly earnings has been stable at 66 cents over the past 30 days. The same suggests an increase of about 14% from the year-earlier quarter’s figure. The consensus estimate of $1,421 million for quarterly revenues indicates growth of about 21% from the prior-year quarter’s tally.

The owner of Coach, Kate Spade and Stuart Weitzman brands has a trailing four-quarter earnings surprise of 65.2%, on average. In the last reported quarter, the company’s bottom line outperformed the Zacks Consensus Estimate by a margin of 12.1%.

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Factors to Note

Tapestry’s performance in the fiscal first quarter is likely to have benefited from its Acceleration Program, which is aimed at transforming the company into a leaner and more responsive organization. The company's focus on enhancing its omni-channel and e-commerce capabilities, and optimizing its cost structure might get reflected in the to-be-reported results. Also, its efforts to lower promotional activity and improve the Average Unit Retail across brands are likely to have boosted margins.

The company is strengthening its position in China via accelerating its growth moves including tailored and innovative product assortments, enhanced marketing, an expanded reach across direct channels and a third-party online distribution. Aforesaid tailwinds are most likely to drive Tapestry’s results for the to-be-reported quarter.

On its last earnings call, management had highlighted that a year-over-year increase in revenues is likely to be first-half weighted, based on relatively easier comparisons owing to the absence of the pandemic-led impacts and the fiscal first quarter being projected to grow more than 20%.

Additionally, the company had anticipated earnings growth in the first half to be a bit stressed due to higher SG&A investments coupled with the prior-year comparisons including lower expenses resulting from compensation reductions, lease abatements and the timing of government assistance. Nonetheless, management had envisioned earnings to increase in the first half from the year-ago period’s level, mainly in the to-be-reported quarter.

The adverse impact of supply-chain disruptions with continued production and distribution delays caused by the pandemic cannot be ruled out. Also, higher freight cost might have deflated the margins.

What Our Zacks Model Says

Our proven model doesn’t conclusively predict 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 odds of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Tapestry, Inc. Price and EPS Surprise

Tapestry, Inc. Price and EPS Surprise

Tapestry, Inc. price-eps-surprise | Tapestry, Inc. Quote

Tapestry currently has a Zacks Rank #4 (Sell) but an Earnings ESP of +9.33%.

Stocks With Favorable Combinations

Here are a few companies you may want to consider as our model shows that these have the right combination to beat on earnings this reporting cycle:

PVH Corp. PVH has an Earnings ESP of +12.38% and a Zacks Rank of 2, currently. You can see the complete list of today’s Zacks #1 Rank stocks here.

Costco COST currently has an Earnings ESP of +1.00% and a Zacks Rank #2.

DICK'S Sporting Goods DKS has an Earnings ESP of +10.27% and a Zacks Rank #3 at present.

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