Business
Tapestry shares plunge nearly 16% as Coach parent says tariffs will bite into profits
People walk past a Coach store on Madison Avenue in New York.
Carlo Allegri | Reuters
Shares of Coach and Kate Spade parent Tapestry plunged Thursday after the company said tariffs will bite into its profits even as sales grow.
The company’s stock closed the day at $95.69, down nearly 16%.
The handbag, shoe and accessory maker said costs from higher duties will total $160 million for its coming fiscal year and drag on its profits. It said it expects full-year fiscal 2026 earnings of $5.30 to $5.45 per share, while analysts polled by FactSet were looking for $5.49.
On the company’s earnings call, Chief Financial Officer Scott Roe said sales trends have been strong. Yet he said the company is “facing greater than previously expected profit headwinds from tariffs and duties, with the earlier than expected ending of de minimis exemptions being a meaningful factor.”
Along with raising tariffs on imports from many countries, President Donald Trump suspended the de minimis rule, which allowed items worth $800 or less to enter the U.S. duty-free.
Tapestry expects its sales to grow in the fiscal year, however. The company said it expects revenue of about $7.2 billion, excluding Stuart Weitzman, which would represent low single-digit growth compared to the prior year. Tapestry agreed earlier this year to sell the shoe brand to Dr Scholl’s footwear owner Caleres for $105 million.
Tapestry’s fiscal 2025 fourth-quarter earnings and revenue also topped Wall Street’s expectations.
In recent weeks, retailers and consumer brands have offered a clearer picture of how they’re trying to mitigate higher costs from tariffs — including many that went into effect earlier this month after delays and extensions. Trump on Monday pushed back high tariffs on China for another 90 days.
Among those strategies, companies are moving manufacturing to other countries, raising prices on some items they sell, trimming promotions and focusing on trendy items that shoppers are more likely to buy.
Crocs CEO Andrew Rees, for instance, told investors on an earnings call earlier this month that it is reducing orders for the back half of the year after seeing weaker demand from retailers that carry its shoes. It also is taking back some of the older inventory from its Heydude shoe brand from retailers and giving partners newer stock.
Yet Tapestry’s Roe said the company’s conservative outlook “has nothing to do with the trajectory of our business.”
He said demand hasn’t slowed, and has even accelerated so far in the current quarter. But he added, “We feel like being prudent at this early stage in our full-year guidance is the right position.”
He said Tapestry is focused on ways to blunt the cost of tariffs, including leaning on its manufacturing in many different parts of the globe and looking for ways to operate more efficiently.
Major U.S. retailers are sharing their latest sales updates and outlooks in the coming weeks. Walmart, Home Depot and Target are all scheduled to report quarterly earnings next week.
Goldman Sachs CEO David Solomon speaks during an interview at the Economic Club of Washington in Washington, D.C., U.S., Oct. 30, 2025.
Kevin Lamarque | Reuters
Goldman Sachs is scheduled to report fourth-quarter earnings before the opening bell Thursday.
Here’s what Wall Street expects:
- Earnings: $11.67 per share, according to LSEG
- Revenue: $13.79 billion, according to LSEG
- Trading revenue: Fixed income of $2.93 billion, equities of $3.70 billion, per StreetAccount
- Investing banking fees: $2.58 billion, per StreetAccount
Goldman Sachs is set up to be a beneficiary of several trends in the fourth quarter.
Trading desks across Wall Street have benefited in the last year as President Donald Trump’s policies have roiled markets for bonds, currencies, commodities and stocks.
For instance, rival JPMorgan Chase topped expectations for fourth-quarter results on equities and fixed income trading revenue that exceeded the StreetAccount estimate by a combined $460 million.
Global investment banking revenue in the quarter was 12% higher than a year ago, according to Dealogic, which should provide a boost to Goldman’s advisory business.
The firm’s asset and wealth management division should also see gains as stock market levels remained buoyant in the quarter.
Finally, the bank said last week that its deal to offload its Apple Card business to JPMorgan would result in a 46-cents-per-share boost to quarterly results.
This story is developing. Please check back for updates.
Last Updated:
X decision came after facing outrage over the misuse of Grok, where the AI Chatbot was found to be complying with user requests to digitally undress images of real people.
Elon Musk’s Grok can no longer undress images of real people on X. (Representative Image)
Amid the rising concerns over the sexualised AI deepfakes in countries including the UK and US, Elon Musk’s Grok artificial intelligence chatbot will no longer edit “images of real people in revealing clothing” on X, the company confirmed Wednesday evening.
The company’s decision came after facing global outrage over the misuse of Grok, where the AI Chatbot was found to be complying with user requests to digitally undress images of adults and, in some cases, children.
“We have implemented technological measures to prevent the Grok account from allowing the editing of images of real people in revealing clothing such as bikinis. This restriction applies to all users, including paid subscribers,” X wrote via its Safety team account.
Within the last week xAi, which owns both Grok and X, restricted image generation for Grok on X to paying X premium subscribers
CNN reported that it has been observed that in the last few days, Grok’s X account had modified how it responded in general to users’ image generation requests, even for those subscribed to X premium.
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United States of America (USA)
January 15, 2026, 08:34 IST
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Elon Musk’s AI model Grok will no longer be able to edit photos of real people to show them in revealing clothing, after widespread concern over sexualised AI deepfakes in countries including the UK and US.
“We have implemented technological measures to prevent the Grok account from allowing the editing of images of real people in revealing clothing such as bikinis.
“This restriction applies to all users, including paid subscribers,” reads an announcement on X, which operates the Grok AI tool.
The change was announced hours after California’s top prosecutor said the state was probing the spread of sexualised AI deepfakes, including of children, generated by the AI model.
The update expands measures that stop all users, including paid subscribers, editing images of real people in revealing outfits.
X, formerly known as Twitter, also reiterated in a statement on Wednesday that only paid users will be able to edit images using Grok on its platform.
This will add an extra layer of protection by helping to ensure that those who try and abuse Grok to violate the law or X’s policies are held accountable, it said.
Users who try to generate images of real people in bikinis, underwear and similar clothing using Grok will be stopped from doing so according to the laws of their jurisdiction, X’s statement said.
In a statement on Wednesday, California Attorney General Rob Bonta said: “This material, which depicts women and children in nude and sexually explicit situations, has been used to harass people across the internet.”
Malaysia and Indonesia have blocked access to the chatbot over the images and UK Prime Minister Sir Keir Starmer warned X could lose the “right to self regulate” amid outrage over the AI images.
Britain’s media regulator, Ofcom, said on Monday that it would investigate whether X had failed to comply with UK law over the sexual images.
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