Tapestry (TPR) Stock Forecast & Price Target

Tapestry is attractive because Coach remains a dominant, high-margin engine, contributing 86% of fiscal 2026 revenue and all operating profit while driving gross margin from 70.8% in FY23 to 76.6% in FY26, with further expansion expected. Its growth is supported by disciplined pricing, handbag AUR gains, nearly 1,000 company-owned stores, and strong customer acquisition, including 11 million new customers in FY26 and 2.6 million in Q1:27, roughly 35% Gen Z. Although Kate Spade remains a drag at 13% of fiscal 2026 revenue, Coach’s broad-based strength in North America, China, and Europe, plus improving profitability and cash generation, underpins the positive outlook.

Tapestry is vulnerable because Coach, which generated 86% of fiscal 2026 revenue and all operating profit, could see growth normalize faster after a ~30% two-year stack in North America, while competition in the $200–500 range may pressure demand and promotions. Margins also look less secure: gross margin has already expanded ~580 bps in three years and absorbed ~130 bps of tariffs, so slower AUR growth, higher markdowns, or weaker China trends could halt further gains. Kate Spade adds risk because it produced 13% of fiscal 2026 revenue but has fallen ~26% from its peak and remains unprofitable, while marketing near 12.0% of sales and capex near 3.5% may limit operating leverage.