Tapestry Jumps After Strong Earnings Report

Time To Exit?

"Cut-to-the-Chase" Members Already Up 285% Potential Profits On This Options Trade!

by Ian Harvey

August 15, 2018




Tapestry Inc (NYSE: TPR)

Tapestry jumps after strong earnings report for fourth-quarter.  

An option call trade was recommended to “Cut-to-the-Chase” Members on Monday, August 13, 2018, based on past performance at beating earnings estimates, the profitable merger comprising handbag specialist Coach, footwear designer Stuart Weitzman, and Kate Spade and recovery of sales of  luxury brands. Potential profits are already up 285% within two days!



The Trade……

…….from…… “Cut-to-the-Chase” Recommendations - Week Beginning Monday, August 13, 2018.

The Details……..

Tapestry Inc (NYSE: TPR) - created when Coach and Kate Spade merged – will report earnings tomorrow, before the market opens. The report will be for the fiscal Quarter ending Jun 2018. Based on 12 analysts' forecasts, the consensus EPS forecast for the quarter is $0.56. The reported EPS for the same quarter last year was $0.50.

Tapestry, the maker of high-end shoes and handbags, has an established record of topping earnings estimates, especially when looking at the previous two reports. The company boasts an average surprise for the past two quarters of 16.21%.

For the most recent quarter, Tapestry was expected to post earnings of $0.50 per share, but it reported $0.54 per share instead, representing a surprise of 8%. For the previous quarter, the consensus estimate was $0.86 per share, while it actually produced $1.07 per share, a surprise of 24.42%.

With this earnings history in mind, recent estimates have been moving higher for Tapestry. In fact, the Earnings ESP (Expected Surprise Prediction) for the company is positive, which is a great sign of an earnings beat.

Tapestry currently has an Earnings ESP of +0.53%, which suggests that analysts have recently become bullish on the company's earnings prospects. This positive Earnings ESP indicates that another beat is possibly around the corner……continue reading…..

The Trade……..

** OPTION TRADE: Buy TPR SEPT 21 2018 50.000 CALL at approximately $1.20 TO $1.30. Sell price is left to your own judgment.

Earnings Report and Movement Expectations……

Shares of Tapestry traded more than 13% higher on Tuesday, after the company released strong fourth-quarter results.

Fourth-quarter and fiscal-year net sales jumped 31%, driven by organic growth and the Kate Spade acquisition. More specifically, fourth-quarter net sales reached $1.48 billion, slightly ahead of analysts' estimates, and adjusted earnings per share checked in at $0.60, also ahead of analysts' estimates calling for $0.57 per share.

"Our strong fourth-quarter results capped an excellent FY18 performance for Tapestry, which demonstrated the power of our multi-brand model. We achieved our annual sales and operating income guidance, driving significant growth while earnings per share outpaced our forecast." said Victor Luis, Chief Executive Officer of Tapestry, in a press release.

With the merger, Tapestry now comprises handbag specialist Coach, footwear designer Stuart Weitzman, and Kate Spade.

Moving Forward…..

The fourth quarter was a strong end to the fiscal year, with Tapestry recording positive comparable-store sales, thanks to strong performance in North America, and improving gross margins. Management anticipates full-year fiscal 2019 sales to range between $6.1 billion to $6.2 billion, ahead of average analyst estimates of $6.08 billion.

Luis pointed to 2019 as "a pivotal year" for the company, especially with Kate Spade, where new collections will test the willingness of the public to embrace the brand after the death of its founder. Even as retail overall has gone through challenges, luxury brands appear to be recovering from the worst of their losses, and that gives Tapestry some tailwinds to help drive its growth in the year to come.

Analyst’s Input…..

In a report released yesterday, Robert Drbul from Guggenheim maintained a Buy rating on Tapestry, with a price target of $60.

Drbul observed:

We also note solid wholesale trends in the quarter across footwear and core handbags/accessories. In International, we note positive Coach comps in with continued focus on the growth opportunity present in China. We continue to expect +LSD global comp sales growth for the Coach brand in 1Q/FY19, with further outperformance in North America, driven by marketing with Selena Gomez, conversion and AUR gains (particularly at outlet with new innovation), and logo expansion. We also see opportunity in Men’s, ready-to-wear, and footwear in FY19. We continue to see significant synergy opportunity with Kate Spade. Kate drove +DD% EPS accretion in its first year of ownership (above our est. for +HSD% accretion).”

The Profits

The company’s shares closed yesterday at $53.16, close to its 52-week high of $55.50.

So, for “Cut-To-The-Chase” members, who managed to execute this trade recommended by Stock Options Made Easy; and exited the market yesterday at a peak profit time, would have taken potential profits of 285%.

Entering the option trade at a cost of $1.20 or less; and going as high as $4.62; one options contract would provide a profit of $342; or 285% Potential Profit.



As you would have by now realized, some of our trades are based on earnings predictions. This is not to say all trades recommended to members follow this pattern, but during earnings season this strategy has been very profitable.

Sometimes it is our approach to predict whether a company will beat or miss estimates, whether the stock will appreciate or depreciate as a result and what strategies investors and traders can use – such as found with the “Earnings Predictions Program”. This type of prediction is based on thorough investigation and fundamentally based research, and the results have been very exceptional.

Strategies to Consider……

"When To Exit A Trade Based On Earnings?"

It is also worth considering, when options trading earnings reports – “Do we exit on already existing profits or leave the companies to report their earnings and hope for bigger profit?” .....READ MORE.....


"Trading Capital Management" is a key component of your trading strategy. The strategy, on which we base our trades to achieve maximum profit, and to minimize loss, is contingent on using an equal amount of money for each trade.……continue reading this article……

Our proven track record says it all!!

Members of Stock Options Made Easy are provided with an extensive reason as to which direction a stock will move after earnings, followed up by a recommended options trade.

If you not a member and interested in being part of this profitable action just CLICK HERE.

Other Membership Options…….

If you interested in "Earnings Predictions" just click here……

or "Mentorship Program".....click here....

Best of Trading,
Ian Harvey
Director of Stock Options Made Easy


”Success is simple. Do what's right, the right way, at the right time.”

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Options traders are not successful because they win.
Options traders win because they are successful.

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