Tapestry Stock May Still Have Room to Run
Tapestry (TPR) stock might be a good candidate to ride the momentum. Why? Because you get strong margin, low-debt capital structure, and strong momentum.
Tapestry’s stock is propelled by a strategic refocus, marked by its Stuart Weitzman divestiture in August 2025 and the subsequent strong execution of its Amplify Growth Strategy introduced at its September 2025 investor day. This is evident in Q1 FY26 revenue surging 13.1% to $1.7 billion, led by Coach’s 22% sales increase. The company’s enhanced focus on core brands and capturing Gen Z consumers underpins its raised full-year outlook and planned $1.3 billion shareholder returns in FY26.
Why buy now? Here are some numbers:
- Revenue Growth: Tapestry saw revenue growth of 8.1% LTM and 2.5% last 3 year average, but this is not a growth story
- Long-Term Profitability: About 18.2% operating cash flow margin and 17.8% operating margin last 3 year average.
- Strong Momentum: Currently in top 10 percentile of stocks in terms of “trend strength” – our proprietary momentum metric.
- Room To Run: Despite its momentum, TPR stock is trading 11% below its 52-week high.
While revenue growth helps, this selection is all about riding momentum with quality – which we judge by margins (reflective of pricing power / strong business model) and capital structure (not too debt heavy).
As a quick background, Tapestry provides luxury accessories and branded lifestyle products globally through three segments: Coach, Kate Spade, and Stuart Weitzman, with an extensive retail network including 939 Coach stores.
| TPR | S&P Median | |
|---|---|---|
| Sector | Consumer Discretionary | – |
| Industry | Apparel, Accessories & Luxury Goods | – |
| PS Ratio | 3.0 | 3.2 |
| PE Ratio | 79.3 | 23.6 |
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| LTM* Revenue Growth | 8.1% | 6.0% |
| 3Y Average Annual Revenue Growth | 2.5% | 5.5% |
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| LTM* Operating Margin | 18.7% | 18.8% |
| 3Y Average Operating Margin | 17.8% | 18.2% |
| LTM* Op Cash Flow Margin | 16.8% | 20.5% |
| 3Y Average Op Cash Flow Margin | 18.2% | 20.1% |
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| DE Ratio | 19.5% | 21.0% |
*LTM: Last Twelve Months
But do these numbers tell the full story? Read Buy or Sell TPR Stock to see if Tapestry still has an edge that holds up under the hood.
Is holding TPR stock risky? Of course it is. High Quality Portfolio mitigates that risk.
Stocks Like These Can Outperform. Here Is Data
Here is how we make the selection: We consider stocks with > $2 Bil in market cap, high operating and cfo (cash flow from operations) margin, no instance of very large revenue decline in the past 5 years, low-debt capital structure, and strong momentum as defined by our proprietry momentum metric.
Below are statistics for stocks with this selection strategy applied between 12/31/2016 and 6/30/2025.
- Average 12-month forward returns of nearly 15%
- 12-month win rate (percentage of picks returning positive) of about 60%
But Consider The Risk
That said, TPR isn’t immune to big drops. It fell 78% during the Global Financial Crisis, nearly 64% in the Covid sell-off, and around 63% in 2018’s correction. The Dot-Com crash and the recent inflation shock also hit hard, with dips close to 48% and 45% respectively. Even solid companies like TPR face steep declines when the market turns south.
But the risk is not limited to major market crashes. Stocks fall even when markets are good – think events like earnings, business updates, outlook changes. Read TPR Dip Buyer Analyses to see how the stock has recovered from sharp dips in the past.
The Trefis High Quality (HQ) Portfolio, with a collection of 30 stocks, has a track record of comfortably outperforming its benchmark that includes all 3 – the S&P 500, S&P mid-cap, and Russell 2000 indices. Why is that? As a group, HQ Portfolio stocks provided better returns with less risk versus the benchmark index; less of a roller-coaster ride, as evident in HQ Portfolio performance metrics.