Personal Finance

Why Shares of Tapestry Are Down 12% After Topping Estimates

Blue, orange, and purple handbags on display.

What happened

Shares of Tapestry, Inc. (NYSE: TPR) , a designer and retailer of handbags, apparel, and footwear under well-known brands such as Coach, Kate Spade, and Stuart Weitzman, are down 12% as of 11:20 a.m. EDT after the company released fiscal 2018 third-quarter results.

So what

Net sales jumped 33% to $1.32 billion, fueled by its Kate Spade acquisition and 3% comparable sales growth at Coach. Adjusted earnings per share checked in at $0.54, topping analysts' estimates calling for $0.50, per Thomson Reuters.

Blue, orange, and purple handbags on display.

Image source: Getty Images.

Now what

Despite reporting a sound quarter that topped estimates on the top and bottom line, investors appear to have concern about the company's Stuart Weitzman brand. Stuart Weitzman results were negatively impacted by production issues and poor sell-through of carryover styles, which weighed on sales and margins. Management noted the issues are likely to continue through the fall and winter. For long-term investors who believe in the company's ability to continue generating high-margin sales through its well-known brands, this is a short-term speed bump.

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Daniel Miller has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Tapestry. The Motley Fool has a disclosure policy .

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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