Tapestry Inc. (NYSE:TPR) is one of the best performing S&P 500 stocks in 2025. On December 17, Baird analyst Mark Altschwager raised the firm’s price target on Tapestry to $140 from $130 with an Outperform rating on the shares. The firm anticipates a more favorable environment heading into 2026, expecting consumer stimulus to pave the way for robust revenue and earnings growth, particularly once the initial impact of tariffs subsides after the first half of the year. A day prior to this rating, Wells Far ...

Core Insights - Caleres completed the acquisition of Stuart Weitzman for $120.2 million in August 2023, which is expected to impact future earnings significantly [1][6] - The footwear brand reported net sales of $790.1 million for the 13 weeks ending November 1, 2025, marking a 6.6% increase from $740.9 million in the same period last year [1] - Direct-to-consumer sales represented approximately 71% of total net sales in the reported quarter [1] Financial Performance - Gross profit for Caleres increased to $329.9 million in Q3, up from $326.9 million in the prior year, but gross margin decreased by 230 basis points to 41.8% [2] - SG&A expenses rose to $311.3 million, accounting for 39.4% of net sales, an increase of 310 basis points from the previous year, largely due to costs associated with Stuart Weitzman [3] - GAAP net earnings fell sharply to $2.4 million, or $0.07 per diluted share, compared to $41.4 million, or $1.19 per diluted share, in the prior-year period [4] Inventory and Outlook - Inventory at the end of the quarter was $678.2 million, an increase of $92 million year-over-year, with Stuart Weitzman contributing $77 million to this total [5] - For the remainder of fiscal 2025, the company anticipates ongoing tariff headwinds affecting gross margin and expects GAAP loss per diluted share between $0.13 and $0.18, with adjusted earnings per diluted share between $0.55 and $0.60, factoring in dilution from Stuart Weitzman [6] - The company plans to transition the Stuart Weitzman business to its systems and address aged inventory, aiming for long-term growth and profitability starting in fiscal 2026 [7]

Third Quarter 2025 Performance - Sales reached $790 million, a 6.6% increase compared to Q3 2024[11, 13] - Adjusted Earnings Per Share (EPS) stood at $0.38[11, 13] - Gross margin was 42.7%, a decrease of 140 bps compared to Q3 2024[13] - Inventory increased by 15.8%[13] Performance Excluding Stuart Weitzman - Sales were $744 million, a 0.4% increase compared to Q3 2024[14, 15] - Adjusted EPS was $0.67[14, 15] - Gross margin was 42.5%, a decrease of 160 bps compared to Q3 2024[14, 15] - Inventory increased by 2.6%[14, 15] Segment Performance - Famous Footwear sales were $419 million, a 2.2% decrease compared to Q3 2024, with comparable sales down 1.2%[16, 17, 18] - Brand Portfolio sales were $384 million, an 18.8% increase compared to Q3 2024 including Stuart Weitzman, and up 4.6% excluding Stuart Weitzman[22] Outlook - Q4 Famous Footwear comparable sales are expected to be flat, with total sales down low single digits[29] - Q4 Brand Portfolio sales are expected to be flat-to-up 1% on an organic basis, with Stuart Weitzman sales adding $55 - $60 million[29] - Full-year adjusted diluted EPS is projected to be $0.55 to $0.60 including Stuart Weitzman, and $1.15 to $1.25 excluding Stuart Weitzman[29]

Core Insights - Caleres Inc. reported third-quarter earnings that fell below analyst expectations, leading to an over 18% drop in pre-market trading [1] - The company achieved net sales of $790.1 million, a 6.6% increase from $740.9 million in the same quarter last year, but adjusted net earnings decreased significantly [1][2] Financial Performance - Net sales for the third quarter of fiscal 2025 were $790.1 million, exceeding analyst expectations of $768.59 million [1][2] - Adjusted net earnings were $13.1 million, or 38 cents per diluted share, down from $42.6 million, or $1.23 per diluted share, in the third quarter of 2024 [1] Segment Analysis - Famous Footwear experienced a net sales decrease of 2.2%, with comparable sales down 1.2% [3] - The brand portfolio division reported a net sales increase of 18.8%, with a 4.6% increase when excluding Stuart Weitzman [3] Management Commentary - CEO Jay Schmidt stated that the company’s sales results were ahead of internal expectations, highlighting organic sales growth and strong performance from lead brands [4][5] - The CEO acknowledged pressures on earnings from tariffs and acquisition dilution but noted improvements in business fundamentals [5] Future Outlook - The company expects continued tariff pressure on gross margin and earnings dilution from Stuart Weitzman [6] - Caleres anticipates a GAAP loss per diluted share for the fourth quarter, with full-year GAAP loss projected between 13 cents to 18 cents and adjusted earnings per diluted share between 55 cents to 60 cents, including dilution from Stuart Weitzman [7]

Core Insights - Tapestry, Inc. is recognized as a potential turnaround story in the retail sector, with positive developments under the leadership of Joanne Crevoiserat [1][2] - The company is part of a group of retailers that have performed better than expected, alongside brands like Ralph Lauren and Walmart, despite a general slowdown in hiring [2] Company Overview - Tapestry, Inc. designs and sells a variety of products including handbags, accessories, footwear, and apparel, with notable brands such as Coach, Kate Spade, and Stuart Weitzman [2] Market Performance - The stock has been highlighted for its strong performance, with Jim Cramer noting that Tapestry is among retailers that have exceeded expectations in a challenging market environment [2]

Group 1 - Tapestry, Inc. (NYSE:TPR) is recognized as one of the retailers that performed better than expected amidst a macro rally, alongside brands like Ralph Lauren and Walmart [1] - The company designs and sells a range of products including handbags, accessories, footwear, and apparel, with notable brands such as Coach, Kate Spade, and Stuart Weitzman [2] - Tapestry's CEO has been highlighted for delivering a compelling narrative about the company's direction, indicating strong leadership and strategic vision [2] Group 2 - Despite the positive outlook for Tapestry, there is a belief that certain AI stocks may present greater upside potential and lower downside risk compared to TPR [2]

Core Insights - Tapestry Inc. is recognized as one of the best performing retail stocks in 2025, with a reaffirmed Buy rating and a price target of $120 by TD Cowen after a recent visit to the company's facilities [1][2] Financial Performance - Tapestry reported record first-quarter fiscal 2026 results, generating $1.7 billion in revenue and earnings of $1.38 per share, reflecting a 16% increase in sales and a 35% growth in EPS year-over-year [2] - The flagship brand Coach contributed significantly to this growth, achieving a 21% revenue increase, while Kate Spade experienced a decline of 9% [2] Strategic Insights - TD Cowen noted that Kate Spade is still a "work-in-progress" and requires patience, but expressed confidence in the "One Coach" strategy if implemented effectively across product lines [3] - Tapestry operates in three segments: Coach, Kate Spade, and Stuart Weitzman, providing luxury accessories and branded lifestyle products across various regions including North America and Greater China [3]

Economic Overview - The U.S. economy is experiencing a K-shaped recovery, where affluent consumers thrive while lower-income consumers struggle [1][3] - Affluent consumers benefit from rising stock markets and high home prices, providing them with financial stability [2] - Lower-income consumers face stagnant wages and rising costs, leading to a decline in purchasing power [3] Company Performance - Benzinga Pro provided early access to market-moving news, exemplified by COCH's stock surge from approximately $1.12 to over $2.00 [4] - Mid- and low-income consumer struggles have been highlighted in earnings calls from major restaurant chains like McDonald's and Chipotle, affecting their stock performance [4] Luxury Brands Analysis - Higher-end brands are capitalizing on the resilience of affluent consumers and the demand for value among cost-conscious buyers [5] - Hermes International, known for its luxury handbags, maintains a strong market position despite recent stock performance lagging behind indices [6][9] - Tapestry Inc., with brands like Coach, reported a 21% year-over-year growth in its Coach division, despite challenges from tariffs and a decline in Kate Spade sales [10][11] - LVMH Moet Hennessy Louis Vuitton experienced a significant stock spike following positive Q3 results, driven by a resurgence in Chinese consumer demand [14][17] - Ralph Lauren Corp. reported a strong fiscal Q2 2026, achieving over $2 billion in quarterly sales and raising revenue guidance despite tariff headwinds [18][19]

Core Insights - Tapestry (TPR) stock presents a promising investment opportunity due to strong margins, a low-debt capital structure, and positive momentum [2][3] Financial Performance - Tapestry's Q1 FY26 revenue increased by 13.1% to $1.7 billion, primarily driven by a 22% sales increase at Coach [3] - The company reported an 8.1% revenue growth over the Last Twelve Months (LTM) and a 2.5% average growth over the past three years [8] - Tapestry has an operating cash flow margin of approximately 18.2% and an operating margin of 17.8% on a three-year average basis [8] Strategic Initiatives - The strategic shift includes the sale of the Stuart Weitzman brand and the implementation of the Amplify Growth Strategy, which aims to enhance focus on core brands and attract Gen Z consumers [3] - Tapestry plans to return $1.3 billion to shareholders for FY26, reflecting confidence in its growth trajectory [3] Market Position - Tapestry operates in the luxury accessories and branded lifestyle products sector through three segments: Coach, Kate Spade, and previously Stuart Weitzman [5] - The company has a retail network of 939 Coach locations, indicating a strong market presence [5] Momentum and Valuation - TPR stock is currently trading 11% below its 52-week high, suggesting potential for growth [8] - Tapestry ranks in the top 10 percentile of stocks regarding "trend strength," indicating strong momentum [8]

Core Insights - Tapestry's approach to the Chinese market emphasizes understanding local consumers rather than relying solely on luxury brand prestige [1][2] - The company is implementing localized strategies, such as collaborating with national IPs and focusing on sustainability to meet the expectations of Chinese consumers, particularly the Z generation [1][2] - Tapestry views China not just as a market but as a critical source of growth and innovation, influencing its global strategy [3][6] Market Positioning - Tapestry's participation in the China International Import Expo reflects its commitment to the Chinese market, which is seen as a significant growth opportunity [3][6] - The company recognizes the importance of China in its global operations, with the Chinese market being a key driver for brands like Coach, Kate Spade, and Stuart Weitzman [6] Strategic Adaptation - Tapestry's strategy includes a shift from merely selling products to learning from Chinese consumers, which informs their design and innovation processes [6] - The company is focused on creating a two-way empowerment model, where insights from Chinese consumers enhance global offerings [6] Investment Confidence - Tapestry expresses confidence in the Chinese investment environment, citing favorable trade policies and a stable regulatory framework as key factors for continued investment [7]