Tapestry (TPR) Stock Forecast & Price Target

Tapestry's financial outlook is bolstered by Coach's revenue growth, which surged 21% year-over-year in the first quarter, significantly outpacing the global handbags market's overall growth. The company's strategic focus on brand elevation is further evidenced by a notable increase in average unit retail prices and a robust performance in its leather goods category, contributing to an anticipated total sales rise of 9.5% year-over-year, reaching approximately $1.65 billion. Tapestry's Amplify plan is designed to capitalize on structural improvements, aiming for continued topline growth and margin expansion, with EPS estimates for fiscal year 2027 increasing to $6.25.

Tapestry's stock faces a negative outlook primarily due to the underperformance of its Kate Spade brand, which experienced a year-over-year revenue decline of 9% during the fiscal first quarter, following a 13% contraction in the prior quarter. Additionally, Kate Spade's gross margin suffered significantly, dropping 730 basis points to 2.2%, largely due to the impact of tariffs and increased expenditures on customer engagement initiatives. Compounding these issues, Tapestry is grappling with ongoing tariff pressures that are projected to adversely affect profitability by approximately $160 million, equating to a 230 basis point decrease in margins.