Tapestry Reports Strong Q2 Earnings, Raises FY26 Outlook
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 3d ago
0mins
Should l Buy TPR?
Source: seekingalpha
Tapestry Inc's stock rose by 6.22% as it crossed above the 20-day SMA, reflecting positive investor sentiment following its strong Q2 earnings report.
The company reported total sales of $2.5 billion for Q2, a 14% year-over-year increase that exceeded Wall Street expectations by $180 million, primarily driven by a 25% rise in Coach brand sales. Earnings per share hit $2.69, up 34% year-over-year and $0.46 above expectations, with adjusted operating margin expanding significantly. Additionally, Tapestry raised its FY26 earnings per share forecast to between $6.40 and $6.45, expecting revenue to exceed $7.75 billion, showcasing the company's confidence in future growth.
This strong performance not only highlights Tapestry's operational improvements but also positions the company favorably in the luxury goods market, potentially attracting more investors and enhancing its stock value.
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Analyst Views on TPR
Wall Street analysts forecast TPR stock price to fall over the next 12 months. According to Wall Street analysts, the average 1-year price target for TPR is 136.57 USD with a low forecast of 120.00 USD and a high forecast of 155.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
15 Analyst Rating
13 Buy
2 Hold
0 Sell
Strong Buy
Current: 143.190
Low
120.00
Averages
136.57
High
155.00
Current: 143.190
Low
120.00
Averages
136.57
High
155.00
About TPR
Tapestry, Inc. is a house of accessories and lifestyle brands. The Company's global house of brands include Coach and kate spade new york. Coach brand is a global fashion house of accessories and lifestyle collections. Kate Spade New York is a global lifestyle brand that designs things for the everyday, delivering seasonal collections of handbags, ready-to-wear, jewelry, footwear, gifts, home decor and more. Its products include women's handbags, women's accessories, men's and other products. Women's accessories include small leather goods which include mini and micro handbags, money pieces, wristlets, pouches and cosmetic cases. Men's includes bag collections, small leather goods, footwear, watches, sunglasses, and ready-to-wear items. Its products are sold to customers through its direct-to-consumer (DTC), wholesale and licensing businesses. Its DTC business includes retail and outlet stores, branded e-commerce sites as well as concession shop-in-shops.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Tapestry's Q2 Performance Boosts FY26 Outlook Amid Strong Coach Sales
- Significant Sales Growth: Tapestry (TPR) exceeded Q2 EPS expectations, raising its FY26 outlook to $6.40-$6.45, reflecting strong brand performance with an 80% year-over-year increase.
- Strong Coach Brand Performance: Coach saw a 25% sales increase in Q2, contributing 14% to Tapestry's total sales, while attracting 2.9 million new customers, highlighting its popularity among Gen Z.
- Massive Market Potential: CEO Joanne Crevoiserat noted that Tapestry targets nearly 2 billion consumers, with 275 million at market entry, currently holding less than 1% market share, indicating substantial growth opportunities ahead.
- Growth Risks and Challenges: Despite Tapestry's recent success, analysts caution that tariffs and brand dilution may hinder future double-digit growth, particularly affecting Kate Spade, and emphasize the need to monitor risks from changing fashion cycles.
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Tapestry's Q2 Performance Boosts FY26 Outlook Amid Strong Coach Sales
- Significant Sales Growth: Tapestry (TPR) exceeded Q2 EPS expectations, raising its FY26 outlook to $6.40-$6.45, reflecting strong brand performance with an 80% year-over-year increase.
- Strong Coach Brand Performance: Coach saw a 25% sales increase in Q2, contributing 14% to Tapestry's total sales, while attracting 2.9 million new customers, highlighting its popularity among Gen Z.
- Massive Market Potential: CEO Joanne Crevoiserat noted that Tapestry targets nearly 2 billion consumers, with 275 million at market entry, currently holding less than 1% market share, indicating substantial growth opportunities ahead.
- Growth Risks and Challenges: Despite Tapestry's recent success, analysts caution that tariffs and brand dilution may hinder future double-digit growth, particularly affecting Kate Spade, and emphasize the need to monitor risks from changing fashion cycles.
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- Transportation Stocks Rally: Saia, Inc. jumped 23.07% this week, benefiting from declining oil prices, which led to a strong performance across the transportation sector, indicating optimistic market expectations for transportation demand that could enhance future earnings.
- Westlake Stock Increase: Westlake Corporation saw a 19.27% rise in its stock price this week, reflecting positive market sentiment regarding its business outlook, particularly in the context of declining raw material costs that may improve profitability.
- Market Recovery: The strong performance of these stocks indicates a growing investor confidence in economic recovery, especially amid falling oil prices, which could further drive growth in related industries.
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2016 Nostalgia Sparks Retail Revival Potential
- Social Media Surge: Since January 1, user-generated '2016' playlists on Spotify have surged by 790%, indicating a strong nostalgic sentiment among young consumers that could drive sales for brands associated with that era.
- Return to Brick-and-Mortar: Young consumers are rediscovering the joy of in-store shopping, reflecting a longing for the carefree atmosphere of 2016, which may lead to improved performance for retailers.
- Brand Opportunities: Brands like Abercrombie & Fitch could leverage this nostalgia wave to reshape their image, particularly if they successfully distance themselves from past controversies, potentially attracting more young consumers.
- Market Outlook: Retail trends typically last about 18 months, and this nostalgia cycle is expected to persist through the midterm elections this year, possibly extending into next year, providing long-term market opportunities for related brands.
See More
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- Nostalgia Trend Emergence: Gen Z's nostalgia for 2016 has rapidly spread across social media, with Spotify user-generated '2016' playlists soaring by 790% since January 1, indicating a strong yearning for the cultural elements of that time, potentially driving a revival for related brands.
- Return to Brick-and-Mortar: Young consumers are rediscovering the appeal of in-store shopping after years dominated by e-commerce, reflecting a longing for the carefree and familiar comfort of 2016, which could stimulate a retail resurgence.
- Brand Opportunities Arise: Brands like Abercrombie & Fitch and Levi Strauss, which held significant cultural relevance in 2016, may leverage this nostalgia wave to regain market traction, especially as consumers show renewed interest in classic styles.
- Market Strategy Adjustments: As nostalgia rises, brands must adjust their market strategies to align with Gen Z's desire for authenticity and less intentionality, with successful brands likely to harness this emotional connection to reshape their cultural relevance.
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