Tapestry (TPR) Stock Forecast & Price Target

Tapestry's strong financial outlook is underscored by Coach's remarkable revenue growth of 21% year-over-year in the first quarter, significantly outpacing the overall handbag market's increase, particularly in North America with a notable 26% growth. The company's strategic brand elevation and successful targeting of Gen Z consumers are contributing factors to Coach's impressive performance, evidenced by a mid-teens rise in average unit retail prices and double-digit growth in leather goods. Additionally, the ongoing Amplify plan is expected to enhance topline growth and further expand profit margins, supporting positive long-term earnings projections with an FY27 EPS estimate increasing to $6.25.

Tapestry's financial outlook is negatively impacted by several key factors, including a year-over-year revenue decline of 9% for Kate Spade during the fiscal first quarter, representing a continuation of poor performance that has seen persistent contractions over the preceding quarters. Furthermore, the gross margin for Kate Spade has been severely compressed, dropping 730 basis points to 2.2%, primarily due to tariff pressures and the company’s investment strategies in customer engagement. Additionally, operational challenges are expected to culminate in a 10 basis point deleverage in Selling, General and Administrative (SG&A) expenses, further exacerbating profitability concerns against a backdrop of a complex and fluctuating tariff environment that could lead to a substantial $160 million headwind on profits.