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Tapestry shares drop after revenue outlook misses expectations
Tapestry forecast fiscal 2027 revenue of $8.4 billion to $8.5 billion, slightly below the $8.46 billion consensus midpoint, even as adjusted EPS beat estimates.
Tapestry Inc. shares fell sharply, dropping as much as 16.9% to a more than six month low of $127.78 after the company reported a strong Coach quarter but issued a fiscal 2027 revenue outlook that fell just short of expectations, according to Yahoo Finance.
In its fourth quarter results, Tapestry reported revenue of $1.88 billion, up 8.9% and broadly in line with consensus, while adjusted earnings per share came in at $1.32, beating the $1.28 estimate. For fiscal 2027, the company forecast revenue of $8.4 billion to $8.5 billion, with the midpoint slightly below the $8.46 billion consensus, although expected adjusted EPS of $7.80 to $7.90 was marginally above estimates.
The selloff reflected concern that Coach's growth could moderate from an unusually strong base, with Coach now driving nearly all portfolio growth. Coach revenue rose 14% in constant currency to $1.64 billion, while Kate Spade revenue declined 7% to $235 million, leaving Coach at roughly 87% of quarterly sales.
Coach strength extended beyond North America, with constant currency revenue growth of 28% in Greater China and 19% in Europe. Yahoo Finance also noted that Tapestry increased adjusted gross margin by 180 basis points to 78.1%, generated $1.86 billion of adjusted free cash flow for the year, and expects to maintain an operating margin near 36% while planning $1.7 billion of dividends and repurchases in fiscal 2027.