Why Jim Cramer Doesn't Like Tapestry Stock

Jim Cramer weighs in on Tapestry.
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Tapestry reported earnings. 

The company swung to a fiscal fourth-quarter loss on 53% lower sales.

For the quarter ended June 27 the New York owner of Coach, Kate Spade and Stuart Weitzman reported a GAAP loss of $1.06 a share compared with earnings of 51 cents a share in the year-earlier quarter.

The adjusted loss was 25 cents a share. Analysts surveyed by FactSet were expecting a loss of 56 cents a share.

Sales fell to $715 million from $1.51 billion. The FactSet consensus analyst estimate was $670 million.

"This performance exceeded internal expectations," interim Chief Executive Joanne Crevoiserat said in a statement.

The company has taken "decisive actions taken to adapt our business to the rapidly evolving environment and enhance financial flexibility." 

Former Tapestry CEO Jide Zeitlin resigned last month after allegations of sexual misconduct from 2007.

Coach remained the company's biggest brand, with revenue of $517 million, or about half the $1.09 billion it brought in a year earlier. Sales at Kate Spade fell to $164 million from $332 million and Stuart Weitzman's sales declined to $33.3 million from $85.2 million.

Putting in place a strategic review of its business, Tapestry said it would be streamlining the organization and selectively closing stores. It said the plan requires professional fees and compensation as it implements profit-boosting initiatives.

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