×

Subscribe Today

Get our free articles delivered directly to your email!

Continue reading

Buyback Wednesdays – Tapestry’s $1.5 Billion Buyback Plan

  • May 18, 2022

We are seeing a sea of red in markets today with the Dow Jones down more than 800 points (2.56%) and the Nasdaq down more than 400 points (3.62%) as I write this. In a challenging market environment, consumer staples and consumer defensive names sometimes help investors ride out volatility while sectors like consumer discretionary tend to take a harder hit. That belief was challenged today with Target (TGT) losing more than a fourth of its market cap following disappointing results with significant gross margin compression. We saw something similar from Walmart (WMT) where comparable same store sales improved 4% but bottom line profitability was hurt by higher input and transportation costs. Costco (COST) is also down 12% today in sympathy.

I was doing some research on another specialty retailer yesterday that reported results last month and suffered a similar hit to margins and profitability as described by Target and Walmart. I read through their earnings conference call transcript and came away with the conclusion that these challenges are likely to persist for a few quarters and it will be better off waiting on the investment. In this environment, it is interesting that the company that is at the top of our stock buybacks list today is Tapestry, the parent company of luxury brands Coach, Kate Spade and Stuart Weitzman.

Please subscribe for free or login to your InsideArbitrage account to access this article.