Tapestry (TPR) Stock Forecast & Price Target

Tapestry is projected to achieve a gross margin expansion of 200 basis points to 75.3%, driven by improvements in average unit retail (AUR) and average unit cost (AUC), which is indicative of strong operational efficiencies. The company continues to see robust consumer demand, particularly among Gen Z and Millennial shoppers, contributing to mid-teen AUR growth at Coach and overall revenue growth across multiple regions, including 4% in North America and 30% in Europe. Additionally, the performance of Tapestry’s digital business, which grew high single digits, alongside solid brick-and-mortar sales, enhances profitability and further solidifies the company’s positive financial trajectory.

Tapestry has faced significant revenue declines across its brands, with Kate Spade reporting a 9.6% year-over-year decrease in the fiscal second quarter, which reflects an accelerated decline from the previous quarter. Additionally, Stuart Weitzman experienced a 15.2% drop in sales, attributed largely to weaker performance in critical markets such as Greater China and North America. The company is also confronting broader risks, including potential consumer weakness leading to reduced discretionary spending, challenges in executing growth initiatives, and volatility in foreign exchange rates.