We recently published 12 Latest Stocks On Jim Cramer’s Radar. Tapestry, Inc. (NYSE:TPR) is one of the stocks Jim Cramer recently discussed.
Apparel company Tapestry, Inc. (NYSE:TPR)’s shares have gained 53% year-to-date despite a rather massive 15.7% drop in August. The shares fell after the firm’s fiscal fourth quarter earnings report. The results saw Tapestry, Inc. (NYSE:TPR) guide full-year fiscal 2026 earnings to $5.30 to $5.45 per share, which fell short of analyst estimates of $5.49. At the heart of the lower guide was the firm’s warning that it expected tariffs to hit its income statement. Cramer was surprised by Tapestry, Inc. (NYSE:TPR)’s earnings report:
“[On shares being down due to impact from tariffs] Now there’s one where if you want to have a consumer price index problem, I didn’t that there’s was going to be as bad as it is. And that’s Coach. And you know, wow, I mean they didn’t signal that beforehand. It was kind of, quizzical.”
Previously, the CNBC TV show host discussed Tapestry, Inc. (NYSE:TPR) in significant detail:
“Late last year, the Biden administration’s Federal Trade Commission blocked yet another merger, Tapestry’s $8.5 billion acquisition of Capri Holdings… Despite all the tariff uncertainty, Tapestry was able to raise its sales and earnings guidance. What’s driving the strength? Now, a lot of it’s because the Coach brand keeps getting better and better… Now, why is Coach winning? I think this is another example of what we have seen in the consumer discretionary space for a while now. Consumers want value, not necessarily absolute value, but relative value. They want high-quality goods at reasonable prices…
… The way I see it, even with the once red-hot Kate Spade doing terribly right now, Tapestry’s been putting up great numbers, so if they can turn around Kate Spade, that would be pure upside. In the end, giving up on the Capri Holdings acquisition turned out to be a brilliant move for Tapestry. Rather than buying a bunch of struggling brands, they made a much better investment in their own stock, sold off the unexciting Stuart Weitzman business, and have turned their core Coach brand into a powerhouse.
Copyright: dolgachov / 123RF Stock Photo
When your competitors are in bad shape, you don’t try to take them over, you just eat them alive, which is what Coach has been doing to Michael Kors… Given the stock’s incredible performance since last October, obviously the expectations here are high… I don’t think the stock is crazy expensive here, trading at just under 22 times this year’s earnings estimate, 18% earnings growth business looks good.
But considering that the stock’s up 69% for the year, this quarter, I’m calling it inherently risky. Here’s the bottom line: Ideally, I want Tapestry to report a good quarter that doesn’t quite satisfy the shareholder base, causing a sell-off that allows you to buy this stock at a lower price. But if you like the story, you got my blessing to put on a small position before the quarter because from my perspective, Tapestry’s management knows exactly what they’re doing and they’re doing it well.”
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Disclosure: None. This article is originally published at Insider Monkey.
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