In a remarkable display of resilience and growth, Tapestry Inc. (NYSE:TPR), the parent company of the luxury brand Coach , has seen its stock price surge to a 52-week high of $49.9. This impressive milestone underscores the company's strong performance in the face of a challenging retail environment. Over the past year, Tapestry has experienced a significant turnaround, with its stock value climbing by an astonishing 58.82%. Investors attribute this success to strategic brand revitalization and a keen focus on digital expansion, which have collectively propelled the company to new heights and instilled confidence in its future trajectory.
In other recent news, a U.S. court decision has blocked the proposed $8.5 billion merger between Capri Holdings (NYSE:CPRI), parent company of Michael Kors, and Tapestry, the company behind Coach and Kate Spade. The Federal Trade Commission (FTC) had filed a lawsuit to prevent the merger, citing concerns that it would reduce competition and potentially lead to higher consumer prices. The court ruling comes after an eight-day trial, during which the FTC argued that the merger would create a dominant company with the ability to unfairly increase prices.
Meanwhile, Evercore ISI has adjusted its outlook on Tapestry Inc., increasing the price target to $63.00 from the previous $47.00, while maintaining an Outperform rating on the stock. This revision follows the court ruling and suggests that Tapestry may resume its previously paused share buyback program, which was put on hold in anticipation of the acquisition. If the deal is definitively blocked, Tapestry could have up to $1.4 billion in buyback capacity later this year.
In addition, Tapestry recently exceeded earnings estimates, with a fourth-quarter earnings per share (EPS) of $0.92, surpassing the expected $0.88. This was attributed to stronger gross margins and a tax benefit. Tapestry's revenue also saw a slight increase of 1% on a constant currency basis, driven by growth in international markets despite a sales decline in North America.
As for Capri, Dana Telsey of Telsey Advisory Group suggested that if the merger ultimately fails, Capri might look for another company to partner with. Tapestry has expressed disagreement with the court's ruling and intends to appeal the decision. These are all recent developments in the companies' growth strategies.
InvestingPro Insights
Tapestry Inc.'s recent stock performance aligns with several key metrics and insights from InvestingPro. The company's impressive 65.28% one-year price total return corroborates the article's mention of a 58.82% climb in stock value. This growth is supported by Tapestry's solid financial foundation, as evidenced by its impressive gross profit margins and the fact that its liquid assets exceed short-term obligations.
InvestingPro Tips highlight that Tapestry has maintained dividend payments for 16 consecutive years and has raised its dividend for 3 consecutive years, demonstrating a commitment to shareholder value that complements its stock price growth. The company's current dividend yield stands at 3.15%, with a notable dividend growth of 16.67% in the last twelve months.
For investors seeking a deeper understanding of Tapestry's potential, InvestingPro offers 6 additional tips that could provide valuable insights into the company's financial health and future prospects.
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