Tapestry, Inc. Sees Impressive Stock Growth Amid Strategic Expansion

Company Overview and Strong Performance

Tapestry, Inc. (TPR), based in New York, specializes in luxury accessories and branded lifestyle products on a global scale. With a market capitalization of $18.7 billion, TPR offers a versatile range of fashion and lifestyle items for both men and women, including handbags, footwear, accessories, and much more, through various channels such as retail stores, online sales, and wholesale distribution.

In the past year, TPR’s stock performance has significantly outpaced the broader market. TPR shares surged by 99.2%, while the S&P 500 Index ($SPX) increased by about 20.6%. So far this year, TPR stock has jumped 23%, far exceeding SPX’s modest 2.5% gain.

Comparison to Consumer Discretionary Sector

Further examination reveals that TPR also surpasses the Consumer Discretionary Select Sector SPDR Fund (XLY), which has made a gain of around 26.8% over the previous year. This strong performance reflects TPR’s higher year-to-date returns compared to the ETF’s limited growth within the same period.

TPR’s success can be attributed to several factors, including global expansion, improved operational efficiencies, and product innovation. Their approach to retail, blending physical locations with digital platforms, has enhanced customer interaction and drawn in younger consumers, specifically Gen Z and Millennials. The flagship brand, Coach, continues to perform well, driven by appealing new products and robust direct-to-consumer sales, emphasizing TPR’s strong market position. Notably, the addition of 1.4 million new customers in North America highlights the effectiveness of its broadened consumer outreach.

Recent Financial Results

On February 6, TPR shares rose more than 12% following their Q2 earnings report. The company reported an adjusted EPS of $2, which surpassed Wall Street’s expectations of $1.75. Revenue reached $2.2 billion, also exceeding predictions of $2.1 billion.

Looking ahead, analysts project that TPR’s EPS will rise by 14.7% to $4.92 on a diluted basis for the current fiscal year ending in June. TPR has shown a strong track record in earnings surprises, exceeding consensus estimates in each of the past four quarters.

Analyst Recommendations

Across 21 analysts monitoring TPR stock, the consensus rating is “Moderate Buy,” supported by 13 “Strong Buy” ratings, one “Moderate Buy,” and seven “Hold” ratings.

This outlook has improved from two months ago, when 11 analysts recommended a “Strong Buy.” On February 7, Evercore ISI analyst Michael Binetti maintained a “Buy” rating on TPR, setting a price target of $97, suggesting a potential upside of 20.7% from current levels.

While TPR currently trades above the average price target of $73.60, the highest price target on Wall Street of $90 indicates an additional upside potential of 12%.

On the date of publication, Neha Panjwani did not hold (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article are provided solely for informational purposes. For more details, please see the Barchart Disclosure Policy here.

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The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.