Shares of Tapestry Inc. (TPR) tumbled 9.43% in pre-market trading on Thursday, despite the luxury goods company reporting better-than-expected first-quarter results for fiscal 2026 and raising its full-year outlook. The sharp decline comes as a surprise given the positive financial performance, leaving investors to speculate on underlying concerns.

Tapestry announced Q1 adjusted earnings per share of $1.38, surpassing the analyst estimate of $1.25. Sales for the quarter reached $1,700 million, exceeding expectations of $1,631 million. The company also reported a robust operating margin of 19.3%. In light of these strong results, Tapestry raised its full-year adjusted EPS guidance to $5.45-$5.60 and projected sales of $7,300 million for fiscal 2026.

Despite these encouraging figures, the stock's pre-market plunge suggests investors may be focusing on other factors. One potential concern is the company's mention of a negative tariff and duty impact of about 230 basis points on its margin outlook. Additionally, broader market sentiment or sector-specific challenges in the luxury goods industry could be contributing to the stock's decline. As the trading day progresses, investors will be closely watching for any further clarification on the disconnect between Tapestry's positive results and the market's negative reaction.