Tapestry (TPR) Up On Q3 Earnings Beat, Share Buyback Program
Zacks Investment Research | May 08, 2019 10:19PM ET
Shares of Tapestry, Inc. (NYSE:TPR) are up roughly 18% during the pre-market trading session on May 9 following the company’s better-than-expected third-quarter fiscal 2019 bottom-line results. Also, the announcement of $1 billion share buyback program rejuvenates investors. Management hinted that the quarterly performance live-up to its expectations with both sales and gross margin improving on a constant currency basis in each of the three brands. The company also registered sequential improvement in comparable-store sales at Kate Spade.
Meanwhile, the company reiterated its fiscal 2019 earnings per share view. It also projected double-digit increase in operating income and earnings per share in fiscal 2020.
Coming back to the quarterly performance, we note that the company posted adjusted quarterly earnings of 42 cents a share that beat the Zacks Consensus Estimate by a penny but fell 22% from the year-ago period.
Net sales of this New York-based company came in at $1,331.4 million, up 1% year over year on a reported and 2% on a constant currency basis. Sales increase at Kate Spade contributed to the top-line growth. However, net sales marginally came below the Zacks Consensus Estimate of $1,337.3 million. This was the second straight quarter that the company’s top line missed the estimates.
Consolidated adjusted gross profit came in at $920.9 million, up 1% from the prior-year quarter, while gross margin expanded 30 basis points to 69.2%. Further, adjusted operating income of $141.1 million plunged 23% from the prior-year quarter figure, while operating margin contracted 330 basis points to 10.6%. We note that adjusted SG&A expenses increased 7% to $779.8 million, while as a percentage of net sales the same increased 360 basis points to 58.6%.
Tapestry, Inc. Price, Consensus and EPS Surprise
Zacks Investment Research
Get The News You Want
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.