Group 1: Company Performance - Tapestry (TPR) has gained approximately 12.5% year-to-date, outperforming the average loss of 2.6% in the Retail-Wholesale group [4] - The Zacks Consensus Estimate for TPR's full-year earnings has increased by 6.4% over the past quarter, indicating improved analyst sentiment and a stronger earnings outlook [3] - Tapestry belongs to the Retail - Apparel and Shoes industry, which has seen a decline of about 19.9% year-to-date, further highlighting TPR's relative strength [5] Group 2: Industry Context - The Retail-Wholesale sector includes 214 individual stocks and currently holds a Zacks Sector Rank of 8, reflecting the average performance of stocks within this sector [2] - The Retail - Apparel and Shoes industry, which includes Tapestry, is ranked 135 in the Zacks Industry Rank, indicating underperformance compared to other industries [5] - Another stock in the Retail-Wholesale sector, TripAdvisor (TRIP), has also outperformed the sector with a year-to-date return of 0.3% [4][6]

Core Insights - Tapestry, Inc. has entered into a definitive agreement to sell its Stuart Weitzman brand to Caleres, Inc. for $105 million in cash, with the transaction expected to close in the summer of 2025 [1] - The sale aligns with Tapestry's strategy to optimize its brand portfolio, allowing it to focus on core brands Coach and Kate Spade while ensuring Stuart Weitzman's growth under Caleres [2] - Caleres views the acquisition as a means to strengthen its market presence, planning to integrate Stuart Weitzman into its operations and maintain a commitment to quality craftsmanship and innovation [3] Tapestry's Brand Performance - In Q2 of fiscal 2025, Tapestry reported record quarterly revenues of $2.2 billion, reflecting a 5.3% year-over-year increase, primarily driven by a 10% improvement in Coach's performance [4] - Kate Spade experienced a 10% revenue decline in the same quarter, attributed to weakening consumer demand and challenges in customer acquisition, prompting Tapestry to implement a 15% reduction in handbag styles and increase marketing investments [5] - Stuart Weitzman faced a 16% revenue decline in Q2 on a constant-currency basis, mainly due to soft demand in Greater China and North America, as well as shipment timing issues [6] Tapestry's Strategic Direction - Tapestry is committed to long-term sustainable growth by enhancing its brand portfolio, improving digital capabilities, and optimizing operational efficiency [7] - The company is focusing on profitability by enhancing gross margins through disciplined expense management, optimized pricing strategies, and an efficient supply chain [8] - Tapestry is prioritizing direct-to-consumer channels and accelerating digital transformation to reinforce its position in the global fashion and accessories market [8] Stock Performance - Over the past three months, Tapestry's shares have gained 58.1%, significantly outperforming the industry and the S&P 500 index, which grew by 2.6% and 3.6%, respectively [9]

Core Viewpoint - Tapestry, Inc. (TPR) has demonstrated strong financial performance and growth potential, significantly outperforming the broader retail sector and showing resilience in international markets [1][18]. Group 1: Stock Performance - TPR shares reached a new 52-week high of $88.07, closing at $87.70, with a year-to-date rally of 34.2% compared to a 5.7% decline in the Zacks Retail-Apparel and Shoes industry [1]. - The stock is currently trading above its 50-day and 200-day simple moving averages of $50.50 and $69.77, indicating price stability and long-term bullish trends [3][4]. Group 2: Digital and DTC Growth - Tapestry's digital and direct-to-consumer (DTC) strategies have driven growth, with a 4% increase in DTC sales in the second quarter of fiscal 2025, supported by high-single-digit growth in digital sales [5][6]. - AI-driven customer engagement has improved pricing power and reduced reliance on promotions, enhancing the company's market positioning among younger consumers [6]. Group 3: Brand Performance - Coach brand remains a key growth driver, achieving an 11% year-over-year revenue increase in the fiscal second quarter, with a gross margin expansion of 270 basis points [7][8]. - The brand is expanding its market share in handbags, with successful collections like the Tabby and new Brooklyn and Empire bags [8]. Group 4: International Expansion - Tapestry's global strategy has resulted in significant revenue growth, particularly in Europe, where revenues increased by 42% year-over-year in the fiscal second quarter [9][10]. - Greater China returned to revenue growth with a 2% year-over-year increase, while APAC (excluding China) grew by 11%, highlighting the company's global execution strength [9][10]. Group 5: Financial Guidance - Tapestry raised its full-year revenue outlook to exceed $6.85 billion, reflecting a 3% year-over-year increase, surpassing previous guidance [11]. - Operating margin is expected to expand by 100 basis points, with earnings per share forecasted between $4.85 and $4.90, indicating 13-14% growth from the prior year [12]. Group 6: Valuation and Analyst Sentiment - TPR's forward 12-month P/E ratio is 17.00, lower than the industry and sector averages, indicating potential for attractive entry points for investors [13]. - Analysts have positively revised Tapestry's EPS estimates, with the current fiscal year consensus at $4.91 per share and the next fiscal year at $5.30 per share [16].

Core Insights - Tapestry has experienced significant stock growth, with shares more than doubling since January 2024, outperforming the S&P 500's 27% gain [2] - The company reported steady Q2 revenue of $2.2 billion, with a 10% year-over-year increase in Coach sales, while Kate Spade and Stuart Weitzman saw declines [3] - Tapestry has revised its fiscal 2025 guidance, expecting EPS between $4.85 and $4.90 and full-year revenue of $6.85 billion, reflecting a 3% year-over-year increase [4] Financial Performance - Tapestry's Q2 results included a record non-GAAP diluted EPS of $1.02, marking a 10% year-over-year increase, and a gross margin expansion of 280 basis points to 74.5% [3] - The company added over 2.7 million new customers in North America, primarily from Gen Z and Millennial demographics [3] - Projected revenues for fiscal 2024 are expected to reach $6.9 billion, reflecting a 4% year-over-year increase, with EPS forecasted at $4.85 [7] Market Position and Outlook - Tapestry's Coach brand is poised to benefit from China's economic expansion, with the luxury market in China projected to reach $178 billion by 2025 [5] - The company has a limited manufacturing footprint in China, which minimizes the impact of a new 10% tariff on Chinese imports [4] - Tapestry's stock has shown volatility over the past four years, with notable returns of 83% in 2024 [6]

Company Performance - Tapestry's shares have increased by 22.9% over the past month, reaching a new 52-week high of $88.07 [1] - Year-to-date, Tapestry has gained 34.2%, outperforming the Zacks Retail-Wholesale sector's 9.2% and the Zacks Retail - Apparel and Shoes industry's -5.7% [1] Earnings and Revenue Expectations - Tapestry has consistently exceeded earnings estimates, reporting EPS of $2 against a consensus estimate of $1.74 in its last earnings report [2] - For the current fiscal year, Tapestry is projected to achieve earnings of $4.91 per share on revenues of $6.87 billion, reflecting a 14.45% increase in EPS and a 3% increase in revenues [3] - The next fiscal year is expected to see earnings of $5.30 per share on $7.11 billion in revenues, indicating year-over-year changes of 7.95% and 3.42%, respectively [3] Valuation Metrics - Tapestry's current valuation metrics show a trading multiple of 17.9X current fiscal year EPS estimates, above the peer industry average of 15.3X [7] - On a trailing cash flow basis, Tapestry trades at 16.4X compared to the peer group's average of 8.2X, with a PEG ratio of 2.03 [7] Zacks Rank and Style Scores - Tapestry holds a Zacks Rank of 2 (Buy) due to favorable earnings estimate revisions from analysts [8] - The company has a Value Score of B, a Growth Score of A, and a Momentum Score of F, resulting in a combined VGM Score of A [6] Industry Comparison - Nordstrom, Inc. is a notable peer with a Zacks Rank of 2 (Buy) and a Value Score of A, indicating a competitive position within the industry [9] - Nordstrom is expected to post earnings of $2.01 per share on revenues of $14.99 billion for the current fiscal year, having beaten consensus estimates by 43.48% last quarter [10]

Company Overview - Tapestry, Inc., formerly known as Coach, Inc., is a designer and marketer of fine accessories and gifts for both women and men, operating in the United States and internationally [11] - The company offers a range of lifestyle products, including handbags, accessories, footwear, jewelry, seasonal apparel, sunwear, travel bags, fragrances, and watches [11] - Tapestry operates under three segments: Coach brand (76.4% of fiscal 2024 sales), Kate Spade & Company (20% of sales), and Stuart Weitzman (3.6% of sales) [11] Investment Ratings - Tapestry is rated 2 (Buy) on the Zacks Rank, indicating a positive outlook for the stock [12] - The company has a VGM Score of A, reflecting strong overall performance across value, growth, and momentum metrics [12] Financial Metrics - Tapestry's Value Style Score is B, supported by attractive valuation metrics such as a forward P/E ratio of 16.18, which is appealing to value investors [12] - In the last 60 days, eight analysts have revised their earnings estimates upwards for fiscal 2025, with the Zacks Consensus Estimate increasing by $0.33 to $4.89 per share [12] - The company has an average earnings surprise of 11.9%, indicating a history of exceeding earnings expectations [12] Investment Consideration - With a solid Zacks Rank and top-tier Value and VGM Style Scores, Tapestry is recommended for investors looking for potential investment opportunities [13]

Group 1 - Tapestry (TPR) has shown strong year-to-date performance, gaining approximately 21%, significantly outperforming the average gain of 8.9% in the Retail-Wholesale sector [4] - Tapestry is part of the Retail-Wholesale sector, which includes 212 stocks and currently holds a Zacks Sector Rank of 4, indicating a relatively lower performance compared to other sectors [2] - The Zacks Rank for Tapestry is 2 (Buy), reflecting a positive earnings outlook and strong analyst sentiment, with the consensus estimate for full-year earnings increasing by 8.2% in the past quarter [3][4] Group 2 - Tapestry belongs to the Retail - Apparel and Shoes industry, which consists of 42 companies and is currently ranked 76 in the Zacks Industry Rank, with an average loss of 4.7% this year [6] - Another stock in the Retail-Wholesale sector, Tempur Sealy (TPX), has also outperformed the sector with a year-to-date increase of 14.2% and holds a Zacks Rank of 2 (Buy) [5][6] - The Retail - Home Furnishings industry, to which Tempur Sealy belongs, is ranked 164 and has seen a gain of 4.9% this year, indicating a weaker performance compared to Tapestry's industry [6]

Core Insights - Zacks Premium provides tools for investors to enhance their stock market engagement and confidence through various resources like daily updates, research reports, and stock screens [1][2] Zacks Style Scores - Zacks Style Scores are indicators that rate stocks based on value, growth, and momentum methodologies, helping investors identify stocks likely to outperform the market in the short term [2] - Stocks are rated from A to F, with A indicating the highest potential for outperformance [3] Value Score - The Value Style Score focuses on identifying undervalued stocks using financial ratios such as P/E, PEG, and Price/Sales [3] Growth Score - The Growth Style Score assesses a company's financial health and future outlook, analyzing projected and historical earnings, sales, and cash flow [4] Momentum Score - The Momentum Style Score evaluates stocks based on price trends and earnings outlook changes, helping investors identify optimal buying opportunities [5] VGM Score - The VGM Score combines all three Style Scores, providing a comprehensive indicator for investors seeking attractive value, growth, and momentum [6] Zacks Rank - The Zacks Rank is a proprietary model that uses earnings estimate revisions to guide investors in building successful portfolios [7] - Stocks rated 1 (Strong Buy) have historically achieved an average annual return of +25.41% since 1988, significantly outperforming the S&P 500 [8] Stock Selection Strategy - Investors are encouraged to select stocks with a Zacks Rank of 1 or 2 and Style Scores of A or B to maximize potential success [9] - Stocks with lower ranks but high Style Scores may still carry risks if their earnings forecasts are declining [10] Company Spotlight: Tapestry, Inc. - Tapestry, Inc., formerly known as Coach, Inc., designs and markets lifestyle products, operating under three segments: Coach (76.4% of sales), Kate Spade (20%), and Stuart Weitzman (3.6%) [11] - Tapestry holds a Zacks Rank of 2 (Buy) and a VGM Score of A, indicating strong growth potential with an expected year-over-year earnings growth of 11.2% for the current fiscal year [12] - The company has seen positive earnings estimate revisions, with the Zacks Consensus Estimate increasing by $0.21 to $4.77 per share [12][13]

Have you looked into how Tapestry (TPR) performed internationally during the quarter ending December 2024? Considering the widespread global presence of this maker of high-end shoes and handbags, examining the trends in international revenues is essential for assessing its financial resilience and prospects for growth.In the current era of a tightly interconnected global economy, the proficiency of a company to penetrate international markets significantly influences its financial health and trajectory of g ...

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