Business Corpus: Coach Parent Tapestry Sinks As Outlook Suggests Weak Fiscal Q4Tapestry beat fiscal Q3 estimates early Tuesday, but the handbag fashion house gave full-year guidance that implied Q4 earnings would fall short of consensus. The post Coach Parent Tapestry Sinks As Outlook Suggests Weak Fiscal Q4 appeared first on Investor's Business Daily.

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Coach and Kate Spade owner Tapestry (TPR) beat fiscal Q3 estimates early Tuesday, but the handbag fashion house gave full-year guidance that implied Q4 earnings would fall short of consensus.

Estimates: A 9% EPS rise to 50 cents a share on 31% revenue growth to $1.3 billion, according to Zacks Investment Research. Global Coach same-store sales are expected to rise 3%, while global Kate Spade comps are seen declining 6.9%, according to Consensus Metrix forecasts.

Results: EPS of 54 cents on revenue of $1.32 billion. Coach revenue increased 6% to $969 million, with same-store sales up 3%. Kate Spade had revenue of $269 million, with same-store sales down 9%. Stuart Weitzman revenue rose 5% to $84 million, and the company said results were hurt by production delays and lower sell-through of key carryover styles, warning that the issues will continue into the fall and winter seasons.

Outlook: Full-year EPS is now seen at $2.57-$2.60, up from a prior view of $2.52-$2.60, with the new midpoint still below consensus for $2.59. The new guidance implies fiscal Q4 EPS of -54-75 cents, below consensus for 60 cents.

"Results were driven by continued growth at Coach, where comparable store sales rose, led by outperformance in North America, and reflected our strong offering, including the successful global relaunch of Signature in retail," CEO Victor Luis said in a statement. "We leveraged these sales gains, tightly controlling costs, and delivered operating income growth ahead of the top line increase."

Stock: Shares tumbled 11.7% to close at 47.46 in the stock market today, diving below their 50-day average and starting to test their 200-day line. Tapestry was well-extended after breaking out of a cup-with-handle base with 45.90 entry back in mid-January.

Ahead of the report, Cowen bumped up its price target to 62 from 56, reiterating an outperform rating and reiterating their analysts' confidence in the brand strength of Coach, Kate Spade and Stuart Weitzman, as well as the various companies' new leadership changes.

And Canaccord Genuity's Camilo Lyon said Monday that he believed "a strong consumer response to the Coach x Selena Gomez collaboration is resulting in a halo effect for the brand across handbags and ready-to-wear."

Rival Michael Kors (KORS) dropped 3%.

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The post Coach Parent Tapestry Sinks As Outlook Suggests Weak Fiscal Q4 appeared first on Investor's Business Daily.