Tapestry (TPR) Q4 2025 earnings

Tapestry’s Stock Plunges Amid Tariff Concerns

Tapestry, the parent company of Coach and Kate Spade, saw its stock plummet by nearly 16% on Thursday after announcing that tariffs would significantly impact its profits. The company’s stock closed at $95.69, marking a substantial decline. Despite strong sales trends, Tapestry’s Chief Financial Officer Scott Roe cited “greater than previously expected profit headwinds from tariffs and duties” as a major factor contributing to the company’s conservative outlook.

The handbag, shoe, and accessory maker expects costs from higher duties to total $160 million in the coming fiscal year, which will drag on its profits. As a result, Tapestry forecasts full-year fiscal 2026 earnings of $5.30 to $5.45 per share, falling short of analysts’ expectations of $5.49. The company’s earnings call revealed that sales trends have been strong, but the impact of tariffs and duties cannot be ignored.

Tariff Impact and Mitigation Strategies

President Donald Trump’s suspension of the de minimis rule, which allowed items worth $800 or less to enter the U.S. duty-free, has added to Tapestry’s concerns. To mitigate the effects of higher costs, companies like Tapestry are exploring various strategies, including moving manufacturing to other countries, raising prices on certain items, and focusing on trendy products that shoppers are more likely to buy. For instance, Crocs CEO Andrew Rees announced plans to reduce orders for the back half of the year and take back older inventory from retailers to make way for newer stock.

Tapestry, however, remains focused on its core business, with Roe emphasizing that the company’s conservative outlook “has nothing to do with the trajectory of our business.” Despite the challenges posed by tariffs, Tapestry expects its sales to grow in the fiscal year, with projected revenue of about $7.2 billion, excluding Stuart Weitzman. The company is also exploring ways to operate more efficiently and lean on its global manufacturing presence to blunt the cost of tariffs.

Industry Outlook and Upcoming Earnings Reports

As major U.S. retailers prepare to share their latest sales updates and outlooks, the impact of tariffs on the industry remains a pressing concern. Companies like Walmart, Home Depot, and Target are scheduled to report quarterly earnings next week, providing further insight into the sector’s performance. With the trade landscape continuing to evolve, businesses must adapt and find ways to navigate the challenges posed by tariffs and duties. As Tapestry and other companies look to the future, their ability to mitigate these costs and maintain strong sales trends will be crucial in determining their success.