Tapestry shares tumble despite earnings beat

Investing.com -- Tapestry, Inc. (NYSE: TPR) reported fourth-quarter results that exceeded analyst expectations, but shares are down 8.9% premarket as the company's fiscal 2027 guidance disappointed investors.

The accessories company posted adjusted earnings per share of $1.32 for the fourth quarter, beating the analyst consensus of $1.25 by $0.07. Revenue reached $1.88 billion, up 9% YoY and above the $1.86 billion estimate. On a pro forma constant currency basis, revenue increased 11%, led by 14% growth at the Coach brand.

For fiscal 2027, Tapestry issued EPS guidance of $7.80 to $7.90, with a midpoint of $7.85 slightly above the consensus of $7.84. However, the company's revenue outlook of $8.4 billion to $8.5 billion, with a midpoint of $8.45 billion, fell short of the $8.47 billion analyst estimate.

The company expects mid-single digit revenue growth and operating margin expansion of approximately 50 basis points. For the first quarter of fiscal 2027, Tapestry projects EPS of approximately $1.55, exceeding the consensus of $1.48.

"Our fourth quarter outperformance capped a year of strong growth, as we meaningfully exceeded expectations and achieved key financial commitments we established at our Investor Day two years ahead of plan," said Joanne Crevoiserat, Chief Executive Officer.

For the full fiscal year 2026, Tapestry delivered revenue of $8.0 billion, up 14% YoY, with adjusted EPS of $7.05, representing 38% growth versus the prior year. The company expanded its operating margin to 23.4%, an increase of 340 basis points YoY. Coach brand revenue grew 23% on a constant currency basis for the full year, while Kate Spade revenue declined 11%.

The Board approved a 16% dividend increase to an annual rate of $1.85 per share.

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