Tapestry, Inc. Reports Strong Growth Amid Market Outperformance
New York-based Tapestry, Inc. (TPR) specializes in luxury accessories and branded lifestyle products worldwide. With a market capitalization of $16.2 billion, the company operates under notable brands such as Coach, Kate Spade, and Stuart Weitzman, offering a range of products including women’s and men’s handbags and accessories.
Market Performance Highlights
TPR shares have significantly outperformed the overall market in the past 52 weeks. The stock has surged 93.2%, while the S&P 500 Index ($SPX) has only gained 8.6%. Year-to-date, TPR shares are up 19.4%, contrasting with a 3.8% decline in the SPX over the same period.
Moreover, Tapestry has exceeded the performance of the Consumer Discretionary Select Sector SPDR Fund’s (XLY), which rose by 13% in the last year but is down 9.8% year-to-date.
Strong Q3 Results and Guidance
After reporting better-than-expected Q3 results on May 8, Tapestry’s stock rose by 3.7%. The revenue for the quarter reached $1.6 billion, reflecting a 6.9% year-over-year increase and exceeding the Street’s estimate of $1.5 billion. Strong growth in the Coach segment, which rose by 12.9%, drove these results. The adjusted EPS was $1.03, a 27.2% increase compared to the same quarter last year and surpassing forecasts by 15.7%. Additionally, Tapestry gained over 1.2 million new customers in North America, with strong engagement from Gen Z and Millennial consumers.
Looking forward to fiscal 2025, Tapestry expects revenue to be around $6.95 billion, indicating a 4% growth year-over-year. The company has also raised its adjusted EPS guidance from a previously estimated range of $4.85 to $4.90 to $5, reflecting a significant increase from the previous year.
Analyst Consensus and Future Projections
For fiscal year 2025, which ends in June, analysts anticipate TPR’s adjusted EPS to grow nearly 18% year-over-year to $5.06. Tapestry has demonstrated a strong earnings surprise history, beating consensus estimates in each of the last four quarters.
Among 21 analysts covering TPR, the consensus rating currently stands as a “Strong Buy”; this assessment is based on 14 “Strong Buy” ratings, two “Moderate Buys,” and five “Holds.” This marks a more bullish outlook compared to three months ago, when there were only 13 “Strong Buy” and one “Moderate Buy” recommendations.
On May 9, Citigroup (C) analyst Paul Lejuez reiterated a “Buy” rating for TPR and increased the price target to $94, significantly higher than the previous target of $81.
As of this writing, Tapestry’s average price target of $86.80 suggests an 11.3% premium to current price levels, while the highest target of $110 indicates a remarkable 41% upside potential.
On the date of publication, Aditya Sarawgi did not hold (directly or indirectly) any positions in the securities mentioned in this article. All information is for informational purposes only. For further details, please view the disclosure policy here.
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