Tapestry (TPR) Stock Forecast & Price Target

Tapestry's outlook is bolstered by Coach's impressive 21% revenue growth in fiscal Q1, significantly surpassing the global handbags market's performance and demonstrating strong resonance with Gen Z consumers. The brand's average unit retail (AUR) increased by mid-teens, while the leather goods segment experienced double-digit growth, particularly with successful collections such as Tabby, New York, and Terry. Furthermore, the Amplify plan is positioned to capitalize on previously implemented structural improvements, aiming for continued revenue expansion and enhanced margins in the future.

Tapestry's financial outlook appears negative due to a significant decline in revenue at Kate Spade, which experienced a 9% year-over-year decrease in fiscal first quarter results, compounded by previous declines, signaling sustained weakness in this segment of the business. Furthermore, the company faces additional pressure with an anticipated $160 million headwind on profit, resulting from heightened tariff complexities and an early termination of the de minimis exemption, adversely impacting margins by approximately 230 basis points. Additionally, Coach has historically struggled with poor performance, attributed to inadequate marketing investments and a lack of focus on customer engagement, raising concerns about the sustainability of its turnaround efforts.