Tapestry forecast annual profit below estimates Thursday, as the Coach handbag maker expects higher costs due to tariff to hit its margins, sending its shares down 14.76% in premarket trading.

The company estimates a $160-million hit from the U.S. import duties, which could result in an about 230-basis-point impact on its fiscal 2026 operating margin.

U.S. consumer spending falling unexpectedly in May has also compounded concerns for companies such as Tapestry that have been ramping up efforts to attract younger customers by introducing new accessories and collections.

The company expects fiscal 2026 earnings per share to be in the range of $5.30 to $5.45, compared with analysts estimates of $5.49 per share, as per data compiled by LSEG.

However, it expects fiscal 2026 revenue to be about $7.2 billion, compared with analysts' estimates of $7.11 billion, owing to steady demand.