Tapestry (TPR) Stock Forecast & Price Target

Tapestry's financial performance reflects a strong upward trajectory, with reported sales up 22.1% year-over-year in the last quarter, indicating robust demand for its primary brand, Coach, which contributed 80% of revenue and over 90% of operating profit in fiscal 2025. Direct-to-consumer sales increased by 17% at constant currency, driven by significant digital growth and expanded brick-and-mortar sales, while the operating margin improved substantially by 380 basis points to 28.8%, surpassing both consensus expectations and prior guidance. Furthermore, Tapestry's strategic focus on customer acquisition, particularly among the Gen Z demographic, led to the addition of 2.9 million new customers and is poised to enhance its revenue stream moving forward.

Tapestry's financial performance demonstrated significant challenges, as indicated by a 14.3% year-over-year decline in revenue, amounting to $355 million, which fell short of prior estimates. The company's smaller brand, Kate Spade, saw a substantial contraction in margins of 1,170 basis points, leading to a disappointing operating margin of 4.6%, which was well below expectations. Furthermore, Kate Spade's total sales declined by 13.5% year-over-year, exacerbating concerns about the brand's performance sustainability amidst a backdrop of reduced promotions and projected continued decline in key markets.