Tapestry's Growth Strategy Focused on International Markets
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 2 hours ago
0mins
Should l Buy TPR?
Source: Newsfilter
- International Growth Potential: Tapestry expects about 70% of its growth over the next few years to come from international markets, particularly China and Europe, indicating strong confidence in global expansion.
- Focus on China: Currently, China accounts for 15% of Tapestry's business, but CEO Crevoiserat emphasizes the significant potential among young consumers, especially as a first luxury bag purchase, which aids in building long-term brand loyalty.
- Sales Growth Trend: Despite a weak overall handbag market, Tapestry's sales in China have been growing by double digits over the past two years, demonstrating strong performance and future growth opportunities in that market.
- European Market Transformation: In Europe, Tapestry has shifted its focus from tourist-driven demand to younger consumers and local customers, which is expected to further drive sales growth and enhance brand influence.
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Analyst Views on TPR
Wall Street analysts forecast TPR stock price to rise
15 Analyst Rating
13 Buy
2 Hold
0 Sell
Strong Buy
Current: 129.320
Low
120.00
Averages
136.57
High
155.00
Current: 129.320
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 Growth Strategy Focused on International Markets
- International Growth Potential: Tapestry expects about 70% of its growth over the next few years to come from international markets, particularly China and Europe, indicating strong confidence in global expansion.
- Focus on China: Currently, China accounts for 15% of Tapestry's business, but CEO Crevoiserat emphasizes the significant potential among young consumers, especially as a first luxury bag purchase, which aids in building long-term brand loyalty.
- Sales Growth Trend: Despite a weak overall handbag market, Tapestry's sales in China have been growing by double digits over the past two years, demonstrating strong performance and future growth opportunities in that market.
- European Market Transformation: In Europe, Tapestry has shifted its focus from tourist-driven demand to younger consumers and local customers, which is expected to further drive sales growth and enhance brand influence.
See More
Wall Street's Bullish Outlook on Stocks
- Challenges for Tapestry: Tapestry (TPR) has shown underwhelming constant currency revenue performance over the past two years, indicating that its products do not resonate with consumers at current prices, resulting in an operating margin of 14.4% that falls short of the industry average, thereby limiting its ability to respond to market changes.
- Financial Strain on HNI: HNI's annual earnings per share growth of 9.3% lags behind revenue growth, and its free cash flow margin of only 3.6% over the past five years restricts its ability to invest in growth and execute share buybacks, revealing a concerning 6x net debt-to-EBITDA ratio that increases the risk of shareholder dilution.
- Growth Potential of Axon: Axon (AXON) has achieved an average annual recurring revenue growth of 37.6% over the past two years, with operating profits improving due to leverage on fixed costs, leading to a compounded annual earnings per share growth rate of 26.6%, and at a current share price of $388.28, it trades at a forward P/E of 45.1, indicating strong investment potential.
- Common Traits of Market Winners: Our analysis shows that successful stocks often share the characteristic of rapidly growing revenues, as evidenced by companies like Meta, CrowdStrike, and Broadcom, which have all returned over 300%, suggesting investors should focus on these high-growth potential stocks.
See More
Tapestry Secures Patent for Mira AI Platform
- Patent Approval: Tapestry has been awarded a U.S. patent for Mira, marking its first AI patent and second technology patent overall, which signifies a significant advancement in the company's data-driven decision-making capabilities.
- Data Connectivity: The Mira platform integrates with Tapestry's Global Data Fabric, enabling rapid analysis that reduces the time from days to seconds or minutes, thereby enhancing the speed and efficiency of business decisions.
- Broad Business Applications: Tapestry teams are already leveraging Mira for assortment planning and inventory management, allowing them to respond swiftly to consumer trends, which enhances market competitiveness and drives sustainable growth.
- Strategic Advantage: Designed with the specific needs of the retail and fashion industry in mind, Mira combines human judgment and creativity to provide powerful business intelligence, further solidifying Tapestry's market position.
See More
Market Watch: Oil Prices, Tech Stocks, and Earnings
- Oil Prices and Refinery Output: U.S. refineries are processing an average of 16.3 million barrels of crude per day, significantly up from 13.5 million, which, while unsustainable, is boosting refinery margins amid ongoing geopolitical tensions, stabilizing the market.
- CoreWeave Price Target Raised: Barclays increased CoreWeave's price target from $106 to $120, noting strong first-quarter earnings that exceeded expectations; however, light guidance for Q2 led to an 11% drop in shares, highlighting the tension between revenue growth and rising operating expenses.
- Strong Performance for Corning: Corning's stock rose 3.4% in premarket trading after Bank of America added it to its
See More
Tapestry's Earnings Report Sparks Buying Interest
- Earnings Impact: Following Tapestry's fiscal third-quarter earnings report, the stock fell over 12%, yet JPMorgan views the current price as attractive, advising investors to 'buy the dip.'
- Price Target Increase: JPMorgan raised Tapestry's price target from $190 to $200, implying over 50% upside from Thursday's close, reflecting confidence in the company's future growth potential.
- Brand Revival: Analysts noted that Coach has undergone a brand revival in recent years, successfully attracting Gen-Z consumers and driving revenue growth for Tapestry, particularly outperforming other brands in the portfolio in the third quarter.
- Market Consensus: According to LSEG data, 15 out of 24 analysts covering Tapestry have either a buy or strong buy rating, indicating a generally optimistic outlook for the company's future performance.
See More
Midday Stock Movements of Major Companies
- Planet Fitness Earnings Downgrade: Planet Fitness shares fell nearly 33% after the gym operator lowered its full-year earnings outlook, now projecting only a 4% year-over-year growth, down from a previous forecast of 9%-10%, which negatively impacts market confidence.
- Vital Farms Surprise Loss: Vital Farms, the egg producer, dropped 20% following a surprise loss of 3 cents per share in Q1, against analyst expectations of a 6-cent profit, and the company also cut its full-year earnings outlook, indicating increasing industry pressures.
- Datadog Exceeds Expectations: Datadog shares surged 28% after reporting Q1 earnings of 61 cents per share, surpassing the 51-cent consensus, with Q2 revenue guidance between $1.07 billion and $1.08 billion, reflecting strong market demand.
- AAON Revenue Surge: AAON, the air conditioning and heating equipment manufacturer, saw its shares soar 40% after Q1 earnings, EBITDA, and revenue all exceeded Wall Street estimates, raising its full-year revenue guidance by as much as 45%, showcasing robust growth potential.
See More
Tapestry's Growth Strategy Focused on International Markets
- International Growth Potential: Tapestry expects about 70% of its growth over the next few years to come from international markets, particularly China and Europe, indicating strong confidence in global expansion.
- Focus on China: Currently, China accounts for 15% of Tapestry's business, but CEO Crevoiserat emphasizes the significant potential among young consumers, especially as a first luxury bag purchase, which aids in building long-term brand loyalty.
- Sales Growth Trend: Despite a weak overall handbag market, Tapestry's sales in China have been growing by double digits over the past two years, demonstrating strong performance and future growth opportunities in that market.
- European Market Transformation: In Europe, Tapestry has shifted its focus from tourist-driven demand to younger consumers and local customers, which is expected to further drive sales growth and enhance brand influence.
See More
Wall Street's Bullish Outlook on Stocks
- Challenges for Tapestry: Tapestry (TPR) has shown underwhelming constant currency revenue performance over the past two years, indicating that its products do not resonate with consumers at current prices, resulting in an operating margin of 14.4% that falls short of the industry average, thereby limiting its ability to respond to market changes.
- Financial Strain on HNI: HNI's annual earnings per share growth of 9.3% lags behind revenue growth, and its free cash flow margin of only 3.6% over the past five years restricts its ability to invest in growth and execute share buybacks, revealing a concerning 6x net debt-to-EBITDA ratio that increases the risk of shareholder dilution.
- Growth Potential of Axon: Axon (AXON) has achieved an average annual recurring revenue growth of 37.6% over the past two years, with operating profits improving due to leverage on fixed costs, leading to a compounded annual earnings per share growth rate of 26.6%, and at a current share price of $388.28, it trades at a forward P/E of 45.1, indicating strong investment potential.
- Common Traits of Market Winners: Our analysis shows that successful stocks often share the characteristic of rapidly growing revenues, as evidenced by companies like Meta, CrowdStrike, and Broadcom, which have all returned over 300%, suggesting investors should focus on these high-growth potential stocks.
See More
Tapestry Secures Patent for Mira AI Platform
- Patent Approval: Tapestry has been awarded a U.S. patent for Mira, marking its first AI patent and second technology patent overall, which signifies a significant advancement in the company's data-driven decision-making capabilities.
- Data Connectivity: The Mira platform integrates with Tapestry's Global Data Fabric, enabling rapid analysis that reduces the time from days to seconds or minutes, thereby enhancing the speed and efficiency of business decisions.
- Broad Business Applications: Tapestry teams are already leveraging Mira for assortment planning and inventory management, allowing them to respond swiftly to consumer trends, which enhances market competitiveness and drives sustainable growth.
- Strategic Advantage: Designed with the specific needs of the retail and fashion industry in mind, Mira combines human judgment and creativity to provide powerful business intelligence, further solidifying Tapestry's market position.
See More
Market Watch: Oil Prices, Tech Stocks, and Earnings
- Oil Prices and Refinery Output: U.S. refineries are processing an average of 16.3 million barrels of crude per day, significantly up from 13.5 million, which, while unsustainable, is boosting refinery margins amid ongoing geopolitical tensions, stabilizing the market.
- CoreWeave Price Target Raised: Barclays increased CoreWeave's price target from $106 to $120, noting strong first-quarter earnings that exceeded expectations; however, light guidance for Q2 led to an 11% drop in shares, highlighting the tension between revenue growth and rising operating expenses.
- Strong Performance for Corning: Corning's stock rose 3.4% in premarket trading after Bank of America added it to its
See More
Tapestry's Earnings Report Sparks Buying Interest
- Earnings Impact: Following Tapestry's fiscal third-quarter earnings report, the stock fell over 12%, yet JPMorgan views the current price as attractive, advising investors to 'buy the dip.'
- Price Target Increase: JPMorgan raised Tapestry's price target from $190 to $200, implying over 50% upside from Thursday's close, reflecting confidence in the company's future growth potential.
- Brand Revival: Analysts noted that Coach has undergone a brand revival in recent years, successfully attracting Gen-Z consumers and driving revenue growth for Tapestry, particularly outperforming other brands in the portfolio in the third quarter.
- Market Consensus: According to LSEG data, 15 out of 24 analysts covering Tapestry have either a buy or strong buy rating, indicating a generally optimistic outlook for the company's future performance.
See More
Midday Stock Movements of Major Companies
- Planet Fitness Earnings Downgrade: Planet Fitness shares fell nearly 33% after the gym operator lowered its full-year earnings outlook, now projecting only a 4% year-over-year growth, down from a previous forecast of 9%-10%, which negatively impacts market confidence.
- Vital Farms Surprise Loss: Vital Farms, the egg producer, dropped 20% following a surprise loss of 3 cents per share in Q1, against analyst expectations of a 6-cent profit, and the company also cut its full-year earnings outlook, indicating increasing industry pressures.
- Datadog Exceeds Expectations: Datadog shares surged 28% after reporting Q1 earnings of 61 cents per share, surpassing the 51-cent consensus, with Q2 revenue guidance between $1.07 billion and $1.08 billion, reflecting strong market demand.
- AAON Revenue Surge: AAON, the air conditioning and heating equipment manufacturer, saw its shares soar 40% after Q1 earnings, EBITDA, and revenue all exceeded Wall Street estimates, raising its full-year revenue guidance by as much as 45%, showcasing robust growth potential.
See More
