Tapestry (NYSE:TPR) is perhaps best known for its two sub-brands: Coach and Kate Spade. For luxury goods with readily-available alternatives, you’d think their parent company would be taking a beating in uncertain economic times marked by massive inflation on nearly everything. But Tapestry is up nearly 10% at the time of writing, and most of it is thanks to a killer earnings report.
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Tapestry’s latest earnings report was impressive by any stretch, and more so considering the macroeconomic picture. Tapestry brought in $0.78 per share, which shattered the $0.60 analysts were expecting. Revenue did about as well, coming in at $1.51 billion against an expected $1.44 billion. Even guidance proved a welcome bit of news, with Tapestry hiking its full-year earnings expectations from $3.75 per share to between $3.85 and $3.90 per share.
With several luxury brands, from Capri Holdings (NYSE:CPRI) to LVMH Moet Hennessy Louis Vuitton (OTC:LVMUY), reporting that the souring economy is tainting sales and making shoppers hesitant to buy luxury goods, Tapestry turned that pessimism on its ear. In fact, Tapestry noted that consumers were particularly drawn to its Tabby bag, a retro, 70s-styled bag that’s drawn a lot of attention. In fact, much of Tapestry’s product lines are getting attention both from millennials and from the Chinese in general.
Analysts are sitting up and taking notice as well. With 12 Buy ratings and four Holds, Tapestry stock is considered a Strong Buy. Further, it offers investors an upside potential of 25.96% thanks to an average price target of $51.33.
