TPR: Applying The Perennial Strategy

Tapestry (TPR) – the maker of Coach and Kate Spade purses for women – reported 4QFY26 earnings this morning. While the numbers looked good to me, the market has sent shares down 17% at the open. This gives us an opportunity to apply the perennial strategy: Buy great companies when they selloff hard.

Let’s look at the results for FY26. Revenue increased 18%, Operating Margin expanded to 23.4% from 20.0% and EPS increased 38% to $7.05 compared to FY25. TPR is guiding FY27 revenue to $8.4-$8.5 billion from $8.0 billion in FY26. Operating margin is expected to expand another 50 basis points. EPS is expected to come in between $7.80 and $7.90. Based on the current price that’s 16x current year EPS. TPR also increased its quarterly dividend by 16% to 46.25 cents for a 1.44% yield.

Technically, the stock has pierced below its 200 DMA for the first time in quite a while. While Wall Street doesn’t like TPR today, the underlying business continues to perform and shares will likely rebound and make new highs in due time. Patient, long term investors are getting a nice entry.