Tapestry: The Selloff Misprices Coach's Next Phase

LL Insights 689 Followers Follow Summary Tapestry is rated Buy after a sharp post-earnings sell-off, with Coach driving high-margin growth and international expansion offsetting Kate Spade's weakness. Coach's pricing power, customer acquisition—especially Gen Z—and operational leverage underpin double-digit EPS growth and robust free cash flow guidance for FY27. International markets, particularly Greater China and Europe, are expected to deliver mid-teen growth, mitigating North America's slower pace and supporting consolidated revenue targets. TPR's valuation is attractive at 16.4x EPS guidance, with $1.35B buybacks and a higher dividend, offering a >20% total return profile without requiring a Kate Spade turnaround. Getty Images Setting the Stage With Tapestry's ( TPR ) most recent quarterly report, there was a stark contrast between how well the company performed and how investors reacted to that performance. Despite exceeding estimates on its fiscal fourth-quarter This article was written by LL Insights 689 Followers Follow I am a retired quant with a PhD in mechanical engineering. I started off my professional career as an engineer and eventually transitioned into a hybrid developer/quantative analyst role at the investment arm of one of the nation's largest insurance companies.I ended my career as a fixed income specialist, with a strong focus on developing mathematical models for the trading desk. Our investment arm consistently outperformed industry averages and ranks among the top global asset managers for fixed income markets.I have a particular interest in fixed-income and technology equities.I have recently returned to work as a Chief Developer at one of the largest financial firms in the U.S. +34.30% Average annual return per ratingClosely associated with Simple Investment Ideas Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.