03:38 PM EDT, 07/31/2024 (MT Newswires) -- Tapestry (TPR) faces a "small miss" in fiscal Q4 earnings per share and the prospect of a guidance cut in fiscal 2025 sales and profit amid a "challenged global consumer spending environment for handbags," UBS Securities said Wednesday in a report.

The fiscal 2025 sales and EPS targets probably will be "moderately below expectations," UBS said. Quarterly results are expected in mid-August.

UBS estimated fiscal Q4 EPS of $0.87 versus the $0.89 market consensus with sales expected to fall 2.9% to $1.57 billion from a year earlier compared with expectations of $1.58 billion by analysts.

Gross margin probably will improve 190 basis points to 74.3% on lower freight and logistics costs, UBS said.

The stock faces a "slight directional downside risk" after quarterly results with the market primarily focused on Tapestry's planned acquisition of Capri Holdings ( CPRI ) .

UBS cut its price target on Tapestry to $42 from $45 and kept its neutral rating.

Shares of Tapestry rose 1.5% in recent trading Wednesday.

Price: 40.38, Change: +0.61, Percent Change: +1.53