Tapestry shares (TPR) fell back 4.24% yesterday ahead of today’s pre-market earnings report, although the stock remains an outperformer, up 19.1% YTD.
The company heads into its Q4 earnings report off the back of four consecutive EPS beats. Analysts are expecting the company to put up EPS of $1.28 on the quarter, a meaningful jump on the $1.04 from this time last year, albeit a step down from the $1.66 from last quarter.
Revenue is expected to come in at $1.87billion, for a 8.65% sales growth rate Y/Y. For FY27, the street is currently expecting growth of ~6%, for an $8.47billion revenue line.
Looking at the most recent report, the company put up ~$1.92 billion in revenue and $1.66 in adjusted earnings per share, alongside a raised full-year outlook and more than 600 basis points of GAAP operating margin expansion. The question heading into today’s print is whether that pace can be sustained, or whether management signals any deceleration that would make the current valuation look harder to justify.
What To Watch
Beyond the headline numbers, the lines that matter most are Coach brand revenue and gross margin. Coach has been the engine driving Tapestry’s recent re-rating, and any sign that its momentum is flattening would likely overshadow a clean EPS beat. Kate Spade’s trajectory is also in focus, given that investors have been watching whether that brand can contribute more meaningfully to group-level growth rather than acting as a drag.
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Operating margin will draw close attention as well. The prior quarter’s margin expansion was one of the more impressive elements of that result, and the Street will want to see whether Tapestry can hold those gains without leaning on cost cuts that could limit future flexibility. Marketing spend relative to sales growth is a related variable, particularly as the group pushes to maintain brand heat in a competitive premium accessories market.
Guidance will arguably carry as much weight as the reported numbers. Tapestry has raised its full-year outlook twice in recent quarters, and the market has come to price in that pattern. A reaffirmation without an upgrade could be read as a mild disappointment given how far the stock has run.
Price Targets
Analyst sentiment is firmly constructive. The broker split leans heavily toward buy-side conviction, with ten strong buy ratings, five buys and five holds against a single sell. The consensus price target of $168.20 suggests a percieved upside of ~10% from here, although with shares trading at a price-to-earnings ratio close to 50, the valuation already reflects a high degree of confidence in continued execution, leaving limited buffer for any stumble on guidance or margins.
Options markets are pricing a move in TPR of ~8.7% following the print, potentially either setting bulls on target to retake that $160 handle, or retesting support around $145.
