Tapestry (TPR) Stock Forecast & Price Target

Tapestry has demonstrated a strong financial performance, with Coach brand revenue growing 21% year-over-year in the first fiscal quarter, significantly outpacing the 4% growth in the global handbags market, particularly benefiting from popularity among Gen Z consumers. The company's total sales forecast reflects a projected 9.5% increase, contributing to an upward revision of the FY27 EPS estimate to $6.25, indicating continued strength in its financial outlook. Additionally, Tapestry's Ampify plan is set to leverage recent structural improvements, supporting further topline growth and margin expansion, as evidenced by the mid-teens increase in average unit retail (AUR) and double-digit growth in the leather goods category.

Tapestry's stock outlook appears negative due to several fundamental issues affecting its brands, primarily marked by a significant decline in revenue at Kate Spade, where year-over-year revenue fell by 9% alongside a notable margin compression of 730 basis points to 2.2%. The company is also facing considerable headwinds from the tariff environment, which is expected to result in a $160 million impact on profits, equating to 230 basis points on margins. Additionally, underlying operational challenges, including historical underinvestment in marketing and declining customer engagement, may hinder the effectiveness of Coach's rebranding efforts and overall profitability.