Tapestry, Inc. (NYSE: TPR) has emerged as a notable investment opportunity, according to Telsey Advisory Group, which recently raised its price target for the luxury fashion company from $125 to $150. This adjustment is part of Telsey’s outlook for 2026, where Tapestry is highlighted among the 20 Best Performing Dividend Stocks for the upcoming year.
Telsey’s report emphasizes Tapestry’s resilience in navigating challenges such as tariffs and fluctuating consumer spending. Despite these pressures, the company has managed to operate from a position of strength. In November, Tapestry raised its full-year targets but cautioned that earnings for the holiday quarter may fall below expectations, reflecting a careful approach during a critical shopping season.
On an earnings call, CFO Scott Roe explained that the company is intentionally managing expectations in light of potential profit volatility caused by tariffs. Tapestry expects second-quarter earnings of approximately $2.15 per share, slightly lower than the consensus estimate of $2.17, according to data from LSEG.
Tariffs continue to be a significant concern for Tapestry, which sources products from India, Vietnam, and Cambodia. These regions are subject to increased US tariffs. Despite these challenges, Tapestry has refrained from raising prices. CEO Joanne Crevoiserat noted that strong demand for the higher-margin Tabby bags, which retail for up to $750, has helped the company absorb some of the increased costs associated with tariffs.
International Growth and Robust Sales Performance
Tapestry is also focusing on international expansion as part of its growth strategy. Sales in China rebounded significantly, increasing by 19% during the quarter, while sales in Europe rose by 32%, indicating a resurgence of traction outside of North America. This growth reflects Tapestry’s commitment to enhancing its global presence.
The company, which owns renowned brands including Coach, Kate Spade New York, and Stuart Weitzman, sells a variety of luxury goods such as handbags, footwear, apparel, and accessories through various channels, including retail stores and e-commerce platforms.
While Tapestry’s potential as an investment is acknowledged, some analysts suggest that certain AI stocks may present greater opportunities for higher returns with limited downside risk. As the market evolves, investors are encouraged to explore diverse options, including emerging sectors like artificial intelligence.
In light of Telsey’s optimistic outlook and Tapestry’s strategic initiatives, the company is positioning itself to navigate current market challenges effectively while capitalizing on growth opportunities in key international markets.
