Tapestry Shares Drop 12% Despite Earnings Beat; UBS Sees 43% Upside
Tapestry beat Q3 earnings estimates and raised FY26 guidance yet saw shares tumble 12% on tariff concerns and Kate Spade weakness. UBS upgraded Tapestry to Buy with a price target implying 43% upside, citing Coach unit momentum and rollout of an AI personalization platform.
1. Q3 Earnings Beat and FY26 Guidance Raise
Tapestry reported adjusted Q3 earnings and revenues above consensus estimates and raised its full-year 2026 guidance after stronger-than-expected demand across its core brands.
2. Investor Reaction and Tariff Impact
Shares fell 12% following the report as investors weighed new U.S. import tariffs that could pressure margins and noted softer sales trends in the Kate Spade segment.
3. UBS Upgrade and AI-Driven Upside
UBS lifted its rating to Buy and set a price target implying 43% upside, highlighting accelerating momentum in Coach and the launch of an AI-powered personalization platform.