Q318 snap - Solid Coach brand, headwinds at KS and SW
Tapestry adj. Q318 EPS was $0.54 ahead of consensus $0.50. Revenues were slightly ahead of expectations, but gross and operating margins came in below. We see a solid performance from the Coach brand, but Kate Spade and Stuart Weitzman saw more headwinds. With the stock +21% YTD and a PE ~22x, we believe expectations were higher.Tapestry is a lifestyle company. The company's primary product offerings, manufactured by third-party suppliers, include women's and men's bags, small leather goods, footwear, ready-to-wear including outerwear, watches, weekend and travel accessories, scarves, eyewear, fragrance, jewelry and other lifestyle products. The company has three reportable segments: Coach, which includes sales of Coach brand products to customers through Coach operated stores; Kate Spade, which includes sales primarily of Kate Spade New York brand products to customers through Kate Spade operated stores; and Stuart Weitzman, which includes sales of Stuart Weitzman brand products primarily through Stuart Weitzman operated stores.
Formed in 2003 by an established team from Cazenove, one of the most respected investment banks in the UK, Atlantic Equities conducts and publishes fundamental, bottom up research on mid and large cap US companies.
Atlantic provide order execution through a wide range of DMA products and algorithmic trading suites.
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