What happened

Shares of Tapestry (NYSE:TPR) plunged on Thursday after the luxury goods company reported its fiscal fourth-quarter results. Tapestry's results were mixed relative to analyst expectations, and its guidance called for revenue and earnings declines to start off fiscal 2020. The stock was down about 21.4% at 11:45 a.m. EST.

So what

Tapestry reported fourth-quarter revenue of $1.51 billion, up 2% year over year and $20 million below the average analyst estimate. Adjusted for currency, revenue increased by 4%. The Coach brand generated $1.1 billion of revenue, flat from the prior-year period; the Kate Spade brand grew revenue by 6% to $332 million; and the Stuart Weitzman brand grew revenue by 17% to $85 million.

Coach handbags.

Image source: Tapestry.

Non-GAAP (adjusted) earnings per share came in at $0.61, up from $0.60 in the prior-year period and in line with analyst expectations. Adjusted gross margin contracted 0.6 percentage points to 67.3%.

Tapestry CEO Victor Luis pointed out the consistent performance from the Coach brand. "We understand that driving sustainable growth at Coach is essential to the success of Tapestry overall and are proud of the brand's performance, highlighted by seven consecutive quarters of positive comparable store sales."

Now what

While Tapestry's fourth-quarter results were generally positive, its first-quarter guidance may have disappointed investors. The company expects a slight year-over-year decline in revenue and a decline in earnings per share. The quarter's results will be impacted by new store openings and other strategic initiatives.

The company's full-year guidance was better, calling for low-single-digit revenue growth and approximately flat earnings per share. While Tapestry is expecting revenue and profitability improvements at Coach and profitability improvements at Stuart Weitzman, the Kate Spade brand is expected to grow revenue at a more modest rate.

The steep decline in the stock price may be overkill, but it's clear that investors aren't happy with Tapestry's performance.