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Tapestry, Inc. TPR has experienced a remarkable jump in its stock price over the past six months. The stock has rallied 53.7%, significantly outpacing the Zacks Retail-Apparel and Shoes industry’s 14.6% decline. The company’s enhanced operational efficiency and growth initiatives have also helped it outperform the broader Retail-Wholesale sector's growth of 0.9% and the S&P 500 index’s decline of 2.1% during the same period.
This impressive uptick has left many investors wondering if they missed out on a lucrative opportunity or if there is still potential for growth. Closing at $70.41 as of yesterday, TPR stock is inching toward its 52-week high of $90.85 attained on Feb. 18, 2025.
TPR Stock Past Six-Month Performance
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Technical indicators are supportive of Tapestry’s strong performance. The stock is trading above both its 100 and 200-day simple moving averages of $69.29 and $55.89, respectively, highlighting a continued uptrend. This technical strength, along with sustained momentum, indicates positive market sentiment and investors’ confidence in Tapestry’s financial health and growth prospects.
TPR Trades Above 100 & 200-Day Moving Averages
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Coach remains the primary driver of Tapestry’s expansion, delivering strong year-over-year revenue growth. In the second quarter of fiscal 2025, the brand recorded an 11% increase in reported revenues and a 10% rise in constant currency, along with a 270-basis-point improvement in gross margin.
On Feb. 19, Tapestry announced a definitive agreement to sell its Stuart Weitzman brand to Caleres for $105 million in cash. This move aligns with Tapestry’s strategic focus on its core brands, Coach and Kate Spade.
With standout collections, such as the Tabby, Brooklyn, and Empire, Coach continues to capture market share in the handbag sector. Its strong global pricing power underscores its position in the accessible luxury market, reinforcing its long-term investment potential.
Tapestry’s international strategy continues to drive significant revenue increases in key markets. Europe emerged as a major growth contributor, achieving a 42% year-over-year revenue surge in the fiscal second quarter, fueled by strong local demand and effective customer acquisition efforts.
In Greater China, the company returned to revenue growth with a 2% year-over-year increase, showcasing resilience despite economic challenges. Meanwhile, the broader Asia-Pacific region (excluding China) posted an 11% growth rate, bolstered by strong performances in South Korea, Malaysia, Australia and New Zealand. These results underscore TPR’s effective global execution and long-term expansion potential.
Tapestry continues to strengthen its digital and direct-to-consumer (DTC) strategies, driving notable growth. In the fiscal second quarter, DTC sales rose 4%, driven by a robust high-single-digit increase in digital sales and a modest uptick in global brick-and-mortar performance. Profitability also improved across all channels.
Moreover, AI-powered customer engagement has enhanced pricing strategies while reducing the need for frequent promotions. The company’s ability to attract and retain younger consumers, particularly Gen Z and Millennials, further solidifies its competitive market position.
Tapestry has revised its full-year financial outlook upward, now anticipating revenues to exceed $6.85 billion, suggesting a 3% year-over-year increase despite currency fluctuations. This surpasses its previous projection of $6.75 billion, which estimated 1-2% growth in both reported and constant currency terms.
Additionally, the company expects a 100-basis-point improvement in operating margin, an upgrade from the previously projected expansion of over 50 basis points. Earnings per share (EPS) are now forecasted between $4.85 and $4.90, indicating a 13-14% increase from the prior year and exceeding the earlier estimate of $4.50-$4.55.
The company is currently trading at a notable low price-to-earnings (P/E) multiple, below the averages of both the industry and the sector. Its forward 12-month P/E ratio is 13.53, lower than the industry and the sector’s ratios of 15.40 and 22.38, respectively. This undervaluation highlights its potential for investors seeking attractive entry points. Moreover, TPR's Value Score of A underscores its appeal as an investment option.
TPR Stock Looks Attractive From a Valuation Standpoint
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Analysts have responded positively to Tapestry’s prospects, indicated by upward revisions in the Zacks Consensus Estimate for EPS. In the past 60 days, analysts have increased their estimates for the current fiscal year by 28 cents. The consensus estimate for earnings is pegged at $4.91 per share. The consensus estimate for the next fiscal year has also been raised 26 cents to $5.30 per share. This indicates year-over-year growth of 14.5% and 8%, respectively.
The Zacks Consensus Estimate for the current and next fiscal year’s sales is pegged at $6.87 billion and $7.11 billion, implying year-over-year growth of 3% and 3.4%, respectively.
Find the latest EPS estimates and surprises on Zacks Earnings Calendar.
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Tapestry is a strong investment choice, driven by Coach’s market leadership and global expansion. TPR’s digital and direct-to-consumer focus enhances profitability, while strategic efficiency supports sustained growth. Favorable earnings revisions and resilient international sales reinforce investor confidence. Technical indicators signal continued momentum, and its undervaluation presents an attractive entry point. The company currently carries a Zacks Rank #2 (Buy).
Some other top-ranked stocks are The Gap, Inc. GAP, Stitch Fix SFIX and G-III Apparel Group, Ltd. GIII.
The Gap is a premier international specialty retailer offering a diverse range of clothing, accessories and personal care products. It sports a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for The Gap’s fiscal 2025 earnings and revenues indicates growth of 7.7% and 1.6%, respectively, from the fiscal 2024 reported levels. GAP delivered a trailing four-quarter average earnings surprise of 77.5%.
Stitch Fix delivers customized shipments of apparel, shoes and accessories for women, men and kids. It currently has a Zacks Rank of 2.
The Zacks Consensus Estimate for SFIX’s fiscal 2025 earnings implies growth of 64.7% from the year-ago actuals. SFIX delivered a trailing four-quarter average earnings surprise of 48.9%.
G-III Apparel is a manufacturer, designer and distributor of apparel and accessories under licensed brands, owned brands and private label brands. It carries a Zacks Rank #2 at present.
The Zacks Consensus Estimate for GIII’s fiscal 2025 earnings and revenues implies declines of 4.5% and 1.2%, respectively, from the year-ago actuals. GIII delivered a trailing four-quarter average earnings surprise of 117.8%.
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This article originally published on Zacks Investment Research (zacks.com).
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