02:28 PM EST, 11/06/2025 (MT Newswires) -- Tapestry (TPR) on Thursday issued a weak outlook for the key holiday quarter, overshadowing the luxury fashion company's strong first-quarter results that prompted it to lift its full-year guidance.

For the ongoing quarter, the Coach and Kate Spade parent is projecting adjusted earnings of about $2.15 per share, representing high-single-digit growth on a yearly basis. Analysts were looking for non-GAAP EPS of $2.17.

Pro forma revenue growth is pegged in the area of 7%, including a foreign exchange tailwind of nearly 50 basis points, Chief Financial Officer Scott Roe said during an earnings call, according to a FactSet transcript. That compares with 16% annual growth in the fiscal first quarter, excluding sales of the recently divested Stuart Weitzman business.

Shares of Tapestry were down 9.2% in Thursday trading, but the stock is up more than 50% so far this year.

"We know that staying disciplined on discounting will impact our top-line results, especially in promotional and highly competitive time periods like holiday, and we are committed to this strategy, as we position ourselves for sustainable growth over the long term," Chief Executive Joanne Crevoiserat told analysts.

For fiscal 2026, non-GAAP EPS is now anticipated at $5.45 to $5.60, up from its prior estimate of $5.30 to $5.45. Revenue is now pegged at around $7.3 billion, representing an annual rise of 4% to 5%, compared its previous projection of about $7.2 billion.

Analysts surveyed by FactSet expect adjusted EPS of $5.51 on revenue of $7.24 billion.

"We view this guidance as prudent and achievable, balancing the realities of an uncertain external environment with the significant opportunities we see for our business," Roe said on the call.

For the quarter ended Sept. 27, adjusted EPS rose to $1.38 from $1.02 a year earlier, ahead of the consensus of $1.26. Sales grew 13% to $1.7 billion, while analysts expected $1.64 billion.

"This outperformance positioned us to increase our outlook for the year, reinforcing that our advantages are structural and sustainable," Crevoiserat told analysts.

Revenue in the Coach brand climbed 22% to $1.43 billion, while Kate Spade fell 8% to $260.2 million.

The company anticipates a 50-basis-point decline in gross margin for the year due to a 230-basis-point headwind from incremental tariff and duties.

The US Supreme Court this week heard arguments on whether President Donald Trump exceeded his authority under the International Emergency Economic Powers Act to impose reciprocal tariffs.

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