Thursday, August 13, 2026

Tapestry (TPR, $153.74) had a good 4Q26 (June) with in-line constant-currency revs up 11% y/y excluding the divested Stuart Weitzman business, though growth did slow from the third quarter's +23%, while non-GAAP EPS grew nearly 30% and were better than expected on strong gross margin performance, and mgmt guided FY27 in line and announced a 16% hike in the dividend.

• Total sales were $1.88B and included $1.64B from Coach, up 14% y/y constant currency after +29% in the third quarter, and $235.1M from Kate Spade, down 7% after (11%) in 3Q26, also $1.15B from North America, up 7%, and $352.2M in sales from China, up 28%.
• Revs fell 4% in Japan and increased 22% in Other Asia and 19% in Europe.
• Other callouts: Tapestry added ~11M new customers in FY26, ~35% of them Gen Z, Coach handbag AUR grew by a mid-teens rate for the quarter and FY, leathergoods outperformed on AUR and unit growth, DTC revs increased 11% in the quarter and 16% for the year.
• Non-GAAP EPS were $1.32 vs. $1.04 last year and the Street's $1.28 estimate and were driven in part by 180 bps of gross margin expansion on operational improvements (170 bps) and the Stuart Weitzman divestiture (60 bps), partially offset by tariffs and duties (60 bps).
• Inventories look good and were down 4% y/y at the end of the quarter.
• FY27 guidance includes mid-single-digit growth in revs, to $8.4B-$8.5B, ~50 bps of op margin expansion, and low-double-digit growth in EPS, to $7.80-$7.90 vs. the Street's $7.87.
• Full-year guidance assumes $1.35B in stock repurchase after $1.35B in FY26.
• DoRCR INSIGHT: The stock is taking a big hit this morning, even though there were no big surprises with the quarter or guidance, likely reflects the slower growth at Coach, which is still doing quite well but is coming off a period of even more impressive gains.

Dillard's (DDS, $636.02) reported an in-line/upside 2Q26 (June), though with some sequential deceleration from the first quarter as consumers remained "somewhat resilient," while earnings were essentially flat y/y when excluding $28.4M in IEEPA refunds.

• Comps increased 1% after +3% in the first quarter, while total retail sales increased 1% to $1.46B and reflected significant increases in ladies' accessories and lingerie, moderate increases in home and furniture, and slight increases in shoes and men's apparel.
• Weaker areas in the quarter included juniors' and children's and ladies' apparel.
• Ex-items EPS were $4.43 vs. $4.42 last year and the Street's $4.29 estimate and incorporated 20 bps of gross margin improvement when excluding tariff refund impacts.
• Dillard's does not give guidance and does not hold quarterly conference calls.
• DoRCR INSIGHT: Dillard's is the first of the department store retailers to report July quarter results, and while the +1% comp is in line with Street expectations, the sequential slowing is noteworthy and could be a negative read-through for the group overall; that said, we also note the first quarter for retail in general benefited from much higher tax refunds.

Grocery Outlet (GO, $10.17) had a soft but better-than-expected 2Q26 (June) with sequential improvement in comps against a somewhat tougher comparison and credited an improved opportunistic offering and increased value perception, and management bumped up the lower-ends of guided ranges for comps, sales and EBITDA and reaffirmed plans for 30-33 net new stores excluding the recent closing of 36 underperforming stores as part of an Optimization Plan.

• Comps decreased 0.3% on top of +1.1% last year and after (1.0%) on top of +0.3% in the first quarter, were a bit better than the Street's (1.5%), and incorporated a 1.8% increase in the number of transactions and a 2.1% decrease in average transaction size.
• Total sales increased 1% y/y in the quarter, to $1.19B vs. the Street's $1.17B estimate.
• Adjusted EPS were $0.20 vs. $0.23 last year and the Street's $0.13 estimate and incorporated a 40 bps decrease in gross margin, mostly on product promos aimed at driving sales and inventory markdowns + write-offs related to the Optimization Plan store closings.
• Grocery Outlet opened 10 stores and closed 12 in the quarter, including nine that were part of the Optimization Plan, and finished the quarter with 547 stores in 16 states.
• 2026 guidance now includes comps of flat to down 0.5%, total sales of $4.70B-$4.72B vs. $4.69B in 2025, which had 53 weeks, and adjusted EPS of $0.51-$0.55 vs. $0.76 in 2025 and assuming 30-33 net new stores, not including the 36 Optimization Plan closings.
• DoRCR INSIGHT: More signs of progress after a protracted period of systems and execution issues and good to see the renewed focus on opportunistic buys driving some sequential comp improvement, but GO has a long way to go to establish more consistency of trend.