Tapestry Dazzles On Earnings: Wait For A Sale Before Buying
Steve Miller | Aug 14, 2018 12:01PM ET
Tapestry (NYSE:TPR) traded 11% higher on Tuesday morning, after posting earnings that beat analyst estimates.
The company reported earnings per share of $0.60 and total revenue of $1.48 billion, above Wall Street expectations of $0.57 and $1.47 billion. With regard to guidance, the company forecast FY 2019 earnings between $2.70-2.80, compared to the average estimate of $2.80.
Tapestry owns luxury fashion brands, Coach and Stuart Weitzman, as well as the recently acquired Kate Spade. "In its first year within Tapestry, Kate Spade delivered double digit earnings per share accretion, despite the strategic pullback in online flash and wholesale disposition," explained CEO Victor Luis. In the most recent quarter, comparable store sales for Kate Spade decreased by 3%, which actually exceeded expectations of a 7% decline.
In analyzing TPR’s market cycles, we believe the stock is still in the rising phase of its current cycle. While we see it as a repaired stock, we note that it is approaching the 78.6% Fibonacci retracement, and as such could be due for a pullback. We expect a better buying opportunity coming in October, perhaps below $50.
For more from Slim, or to learn about cycle analysis, check out the askSlim Market Week show every Friday on our YouTube channel .
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