We expect Tapestry, Inc. TPR to report year-over-year increases in the top and the bottom lines when it releases third-quarter fiscal 2023 earnings on May 11, before market open.
The Zacks Consensus Estimate for quarterly earnings has been unchanged at 59 cents per share over the past 30 days. The same suggests an increase of 15.7% from the year-earlier quarter’s reported figure. The consensus estimate of $1,443 million for quarterly revenues indicates growth of 0.4% from the prior-year quarter’s actual.
The owner of Coach, Kate Spade and Stuart Weitzman brands has a trailing four-quarter earnings surprise of 10.6%, on average. In the last reported quarter, the company’s bottom line outperformed the Zacks Consensus Estimate by a margin of 7.9%.
Factors to Note
A consumer-centric approach, omni-channel capabilities, brand strength and an emphasis on high-growth areas are likely to have benefited Tapestry’s third-quarter performance. Its Acceleration Program has been another major contributing factor. The company has been focused on deepening engagement with consumers, creating innovative and compelling products, and expanding digital and data analytics capabilities.
On its last reported quarter's earnings call, Tapestry envisioned revenue and earnings growth in the back half, suggesting a return to growth in Greater China and lower freight costs on a year-over-year basis. For the third quarter, the company estimated revenues to increase 3-5% in constant currency, including gains in Greater China. On a reported basis, it expected sales to be up slightly. The company estimated third-quarter earnings to be 60 cents per share, suggesting a sharp increase from earnings of 51 cents reported in the year-ago period.
However, a tough operating environment and foreign exchange headwinds are likely to have been spoilsports. The impacts of higher freight costs cannot be ignored. Meanwhile, any deleverage in SG&A expenses is expected to get reflected in its margins.
What Our Zacks Model Says
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 before they’re reported with our Earnings ESP Filter.
Tapestry, Inc. Price and EPS Surprise
Tapestry, Inc. price-eps-surprise | Tapestry, Inc. Quote
Tapestry currently has an Earnings ESP of -0.72% and a Zacks Rank #4 (Sell).
Stocks With a Favorable Combination
Here are a few companies, which according to our model, have the right combination to beat on earnings this reporting cycle:
American Eagle Outfitters AEO currently has an Earnings ESP of +13.87% and carries a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank stocks here.
The company is expected to register bottom-line growth when it reports first-quarter fiscal 2023 results. The Zacks Consensus Estimate for quarterly earnings per share of 17 cents suggests an increase of 6.3% from the year-ago quarter's actual.
American Eagle Outfitters’ top line is anticipated to rise year over year. The consensus mark for revenues is pegged at $1.06 billion, indicating an increase of 0.4% from the figure reported in the year-ago quarter.
Casey's General Stores CASY currently has an Earnings ESP of +0.05% and a Zacks Rank of 2. The company is expected to register a bottom-line increase when it reports fourth-quarter fiscal 2023 results. The Zacks Consensus Estimate for quarterly earnings per share of $1.61 suggests a rise of 0.6% from the year-ago quarter's actuals.
Casey's top line is anticipated to fall year over year. The consensus mark for revenues is pegged at $3.42 billion, indicating a drop of 1.2% from the figure reported in the year-ago quarter. CASY has a trailing four-quarter earnings surprise of 9.9%, on average.
lululemon athletica LULU currently has an Earnings ESP of +1.28% and a Zacks Rank of 3. LULU is likely to register top-line improvement when it reports first-quarter fiscal 2023 numbers.
The Zacks Consensus Estimate for lululemon athletica’s quarterly revenues is pegged at $1.9 billion, calling for growth of 19.5% from the prior-year quarter’s reported figure. The consensus mark for quarterly earnings per share of $1.93 suggests a 30.4% increase from the figure reported in the year-ago quarter. LULU has a trailing four-quarter earnings surprise of 6.8%, on average.
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