Tapestry (TPR) Stock Forecast & Price Target

Tapestry is demonstrating significant financial momentum, particularly through its flagship brand Coach, which has reported a remarkable 21% year-over-year revenue growth in fiscal Q1 and a 26% increase specifically in North America, indicating strong brand resonance with younger consumers. The total sales are projected to rise 9.5% year-over-year to $1.650 billion, supported by an intensified marketing strategy that boosted spending by 43% year-over-year in the first quarter, aimed at customer acquisition. Furthermore, the positive outlook is bolstered by Coach's strategic focus on the $200–$500 handbag price range, which continues to provide a compelling value proposition within a growing global handbags market, further enhancing Tapestry's growth prospects.

Tapestry's outlook is negatively influenced by significant revenue declines, particularly in its Kate Spade brand, which experienced a year-over-year revenue drop of 9% in the first fiscal quarter, following a 13% contraction in the previous quarter. The brand's margins have also been severely impacted, decreasing by 730 basis points to just 2.2% due to rising tariffs and increased spending on customer engagement initiatives. Furthermore, Tapestry faces ongoing challenges from a fluctuating tariff environment, which is expected to result in a $160 million profit headwind, equating to a 230 basis points decline in overall margins.