Tapestry hit by downgrades over Kate Spade

Bloomberg

Disappointing results at Tapestry’s Kate Spade line prompted a string of rating downgrades on the stock, with analysts saying a recovery may take several quarters.
After sliding 22 percent to a 10-year low, Tapestry shares pared some of the losses to rise as much as 3.4 percent in New York.
Credit Suisse analyst Michael Binetti said, “Kate outlook is now significantly reduced due to: 1) A big fourth-quarter same store sales miss; 2) Deteriorating near-term trends; 3) Elevated inventories which will pressure Kate same store sale and gross margin through fiscal 2020.”
“With Tapestry offering few details on the timeline back to profitable Kate growth, we downgrade to Neutral despite the stock already pulling back significantly.”
Downgrade to neutral from outperform, price target to $22 from $38.
MKM Partners’ analyst Roxanne Meyer said, “Kate Spade’s outlook reflects a deterioration of trends that may take several quarters or more to repair.”
“While we see limited downside risk to the stock from here, we don’t see a positive catalyst
to give us conviction in material upside.”