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On Friday, BMO Capital Markets adjusted its outlook on Tapestry Inc. (NYSE:TPR), raising the price target to $80 from $78, while maintaining a Market Perform rating on the stock. The move follows Tapestry’s announcement of financial results that surpassed expectations on both revenue and earnings. According to InvestingPro data, the company has demonstrated remarkable performance with a 97.21% return over the past year, while five analysts have recently revised their earnings estimates upward.
Tapestry, the parent company of the Coach brand, reported a top and bottom-line beat, indicating that its strong brand continues to resonate with consumers. The company’s revenue growth translated into sustained gross margin strength, which was particularly driven by growth in the average unit retail (AUR) of Coach products. InvestingPro data reveals an impressive gross profit margin of 75.09%, underlining the company’s pricing power and operational efficiency.
The company’s management has adopted a cautious stance for their fourth-quarter guidance, despite not observing any slowdown in the business thus far. They also noted that the anticipated incremental tariffs are not expected to significantly affect the fiscal year 2025 results due to the timing of Tapestry’s fiscal year-end.
Coach, a key brand within Tapestry’s portfolio, has been consistently performing well, contributing to the company’s overall success. The brand has been successfully elevating its position in the market, a fact that is reflected in the increasing gross margins.
BMO’s analyst highlighted the company’s performance and the strategic approach of management in navigating the current market conditions. Tapestry’s ability to maintain its brand strength and financial performance amidst a dynamic retail environment has been a key factor in BMO’s updated price target. InvestingPro analysis shows the company has maintained dividend payments for 17 consecutive years, demonstrating long-term financial stability. With 12 additional exclusive ProTips and comprehensive financial metrics available, investors can gain deeper insights into Tapestry’s market position and growth potential through InvestingPro’s detailed research reports.
In other recent news, Tapestry Inc. reported strong financial results for the third quarter of fiscal year 2025, exceeding analysts’ expectations with an earnings per share (EPS) of $1.03, compared to the forecasted $0.88. The company’s revenue also surpassed predictions, reaching $1.6 billion against the anticipated $1.53 billion. Following this performance, Tapestry raised its fiscal 2025 revenue guidance to $6.95 billion. Analyst firms have responded positively, with Citi increasing the price target for Tapestry shares to $94, maintaining a Buy rating, and Morgan Stanley (NYSE:MS) upgrading the stock to Overweight with a new price target of $90. Raymond (NSE:RYMD) James also adjusted its price target to $85, maintaining an Outperform rating. Analysts have noted the strong performance of Tapestry’s Coach brand, which has shown significant sales momentum. Despite challenges with the Kate Spade brand, Tapestry continues to focus on revamping efforts. The company recently completed a $2 billion accelerated share repurchase program, reflecting its commitment to returning cash to shareholders.
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