Tapestry Raises Annual Forecasts on Steady Demand for Popular Handbags

Tapestry, Inc. (NYSE: TPR), the luxury goods conglomerate behind iconic brands like Coach, Kate Spade, and Stuart Weitzman, has raised its annual revenue and earnings forecasts, buoyed by strong demand for its handbags. The company's fiscal 2025 second quarter results, released on February 6, 2025, showed a 2.37% increase in revenue to $6.83 billion, driven by a 0.15% increase in revenue from the previous year. Earnings, however, decreased by -12.82% to $816.00 million.

The company's success can be attributed to several strategic initiatives, including:

1. Rebranding and Product Innovation: Tapestry has been rebranding and innovating its products, which has helped attract new customers and retain existing ones. For instance, Coach has received a facelift and this has been reflected in its recent success. The company has kept prices high at Coach, which has contributed to its luxury image and increased demand.
2. Omnichannel Investments: Tapestry has been investing in digital and omnichannel capabilities, which has boosted margins and attracted younger customers. This has driven revenue and profit growth.
3. Strong Product Innovation and Expanded Marketing: Tapestry has focused on strong product innovation and expanded marketing, which has enhanced brand awareness and revenue potential in new and existing markets.
4. Growth in Complementary Categories: Tapestry has seen growth in complementary categories like footwear and fashion, which has contributed to the overall increase in demand for its handbags.
5. Expansion in China: China has been a key growth region for Tapestry, as Chinese consumers are expected to make up 35%-40% of worldwide luxury goods spending in 2030, up from 22%-24% in 2023. This has contributed to the increased demand for Tapestry's handbags in the region.

Tapestry's CEO, Joanne Crevoiserat, commented on the results, "Our strong performance in the second quarter reflects the continued momentum of our strategic initiatives, including our omnichannel investments and new product innovation. We are confident in our ability to continue to drive growth and deliver value to our shareholders."

Analysts have responded positively to the news, with the average price target for TPR stock being $68.41, a decrease of -6.77% from the latest price. The consensus rating is "Buy."



Tapestry's success in the luxury handbag market is a testament to the company's ability to adapt to changing consumer preferences and maintain a strong brand presence. As the company continues to invest in digital capabilities and expand its product offerings, it is well-positioned to capitalize on the growing demand for luxury goods, particularly in the high-growth Chinese market.



In conclusion, Tapestry's strong performance in the second quarter, driven by its strategic focus on omnichannel investments and new product innovation, has led to an increase in revenue and earnings forecasts. The company's ability to adapt to changing consumer preferences and maintain a strong brand presence in the luxury handbag market has positioned it for continued success in the future.