Tapestry (TPR) Stock Forecast & Price Target

Tapestry demonstrated strong financial performance with a 22.1% year-over-year sales increase in the last quarter, driven by significant growth from its flagship brand Coach, which saw a 21% revenue rise. Direct-to-consumer (DTC) sales rose 17% at constant currency, supported by robust digital growth of 20% and mid-teens growth in physical retail channels, alongside the addition of 2.9 million new customers, notably within the Gen Z demographic. Furthermore, Tapestry is expected to enhance shareholder value through a substantial $1.2 billion share buyback in FY26, signaling confidence in the company's continued profitability as evidenced by an improved operating margin of 28.8%.

Tapestry is experiencing significant challenges, highlighted by a 14.3% year-over-year revenue decline to $355 million, which fell short of both internal and consensus estimates. Additionally, Kate Spade's operating margin contracted dramatically by 1,170 basis points to just 4.6%, well below expectations, as the brand reported a sales decrease of 13.5% year-over-year. Furthermore, Tapestry's cash reserves fell slightly from $1.12 billion to $1.08 billion, reflecting ongoing financial pressures amidst efforts to reset brand strategies and reduce promotional activity.