Tapestry (TPR) Stock Forecast & Price Target

Tapestry's financial outlook appears positive due to expected gross margin expansion of 200 basis points to 75.3%, driven by enhancements in average unit retail (AUR) and average unit cost (AUC). The company's digital business demonstrated strong growth, contributing approximately one-third of revenue with high-single-digit constant currency growth in digital sales, while brick-and-mortar sales increased modestly. Additionally, notable revenue growth in international markets, particularly a 42% constant currency increase in Europe, further supports Tapestry's strong financial trajectory for fiscal 2025.

Tapestry's financial outlook appears negative due to a notable decline in revenues across its brands, with Kate Spade experiencing a 9.6% year-over-year drop in the fiscal second quarter and Stuart Weitzman reporting a 15.2% decrease in sales, primarily impacted by weaker demand in Greater China. Additionally, the company's overall performance has been hindered by broader consumer weakness, particularly in discretionary spending, and challenges in executing successful growth initiatives. Tapestry faces significant risks, including potential prolonged adverse consumer conditions in key markets like China, product cost volatility, and difficulties in consolidating and scaling its three principal brands.