Tapestry (TPR) Stock Forecast & Price Target

Tapestry's strong financial prospects are underscored by impressive growth metrics, with Coach's revenue surging 21% year-over-year in the first fiscal quarter, significantly outperforming the broader global handbags market, which saw a 4% increase in North America. The brand's successful elevation strategy is reflected in its double-digit growth in leather goods, particularly with the Tabby, New York, and Terry collections, contributing to a favorable outlook for future sales. Additionally, management's forecasts suggest a solid increase in total sales and earnings per share, indicating sustained momentum and market share expansion, particularly among Gen Z consumers.

Tapestry's stock outlook appears negative due to several fundamental financial challenges, particularly within its Kate Spade brand, where year-over-year revenue fell by 9% and margins were significantly pressured, decreasing by 730 basis points to 2.2%. Compounding these issues, the loss of the de minimis exemption is projected to create a substantial headwind of approximately $160 million on profits, translating to a 230 basis point impact on margins. Furthermore, the company's ongoing challenges, which stem from historical underinvestment in marketing and customer acquisition strategies, suggest a potential inability to sustainably reinvigorate brand performance in a competitive market.