Tapestry (TPR) to Post Q4 Earnings: What’s in the Cards?

Tapestry, Inc. TPR is likely to post deterioration in the top and bottom line when it reports fourth-quarter fiscal 2020 numbers on Aug 13, before market open. The Zacks Consensus Estimate for fourth-quarter loss has widened by a cent in the past seven days to 49 cents per share. This […]

Tapestry, Inc. TPR is likely to post deterioration in the top and bottom line when it reports fourth-quarter fiscal 2020 numbers on Aug 13, before market open. The Zacks Consensus Estimate for fourth-quarter loss has widened by a cent in the past seven days to 49 cents per share. This suggests deterioration from earnings of 61 cents registered in the year-ago quarter. Notably, this luxury accessories and lifestyle retailer has a trailing four-quarter negative earnings surprise of 12.1%, on average.

The consensus estimate for quarterly revenues is pegged at $691.2 million, which suggests a decline of 54.3% from the prior-year quarter’s tally.

Factors to Note

Due to the coronavirus outbreak, Tapestry had temporarily closed stores in several regions like North America, Europe and Asia among others. While the company has been reopening stores in a phased manner as coronavirus-induced restrictions are being lifted, the temporary closures at some point in the fourth quarter are likely to have weighed on performance. Apart from this, Tapestry has been battling soft sales in the Stuart Weitzman segment for quite some time. Moreover, risks of adverse foreign currency movements cannot be ignored.

Tapestry, Inc. Price and EPS Surprise

Tapestry, Inc. Price and EPS Surprise

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

Nevertheless, the company has been benefiting from a solid online business, especially amid the pandemic. During the third quarter of fiscal 2020, the company witnessed robust double-digit growth in global e-commerce business. Further, management has been undertaking actions to curb non-essential operating expenses, lower fixed costs as well as enhance SG&A savings.

What the Zacks Model Unveils

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 carries a Zacks Rank #3 and an Earnings ESP of -10.88%.

Stocks With a Favorable Combination

Here are some companies you may want to consider as our model shows that these have the right combination of elements to post an earnings beat:

Dollar General DG has an Earnings ESP of +2.90% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

DICKS Sporting Goods DKS has an Earnings ESP of +34.65% and a Zacks Rank #3.

Lowes Companies LOW has an Earnings ESP of +11.49% and a Zacks Rank #3.

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