Tapestry's Direct-to-Consumer Model Emerges as a Key Growth Driver

Tapestry, Inc. TPR is strengthening its consumer reach through a strong direct-to-consumer (DTC) platform spanning stores, outlets and digital channels. DTC represented approximately 87% of total net sales in fiscal 2026, underscoring its importance to the company’s business model. In the fourth quarter, DTC revenues increased 11% on a pro forma constant-currency basis, while digital revenues grew at a mid-single-digit rate and store revenues increased at a mid-teens rate, highlighting continued strength across Tapestry’s consumer-facing channels.

The company’s DTC performance was complemented by broad-based geographic momentum during the quarter. Pro forma revenues increased 11% on a constant-currency basis, while North America revenues grew 7%, Europe advanced 19% and total Asia-Pacific revenues increased 19%. Greater China was particularly strong, with revenues rising 28% on a constant-currency basis.

Tapestry is leveraging its direct consumer relationships to improve decision-making. Management highlighted data, decision intelligence and AI as differentiated strengths that enable the company to translate consumer insights into action at scale. This approach supports more informed decisions across the business and strengthens Tapestry’s connection with consumers.

The company is continuing to expand its digital reach across major markets. Tapestry operates e-commerce sites across North America, Greater China, Japan and Europe, while leveraging third-party digital platforms. Its global digital infrastructure provides additional avenues to reach consumers and complements its physical retail presence.

Management expects continued growth in fiscal 2027. Tapestry projects revenues to be in the range of $8.4-$8.5 billion, representing mid-single-digit growth, while adjusted EPS is expected to be $7.80-$7.90, reflecting low-double-digit growth. Operating margin is expected to expand by approximately 50 basis points, supporting the company’s outlook for continued profitable growth.

TPR’s Price Performance, Valuation & Estimates

Shares of Tapestry have risen 35.5% over the past year, significantly outperforming the industry, which has remained unchanged during the period.

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From a valuation standpoint, TPR trades at a forward price-to-earnings ratio of 16.56X, above the industry’s average of 13.21X. It has a Value Score of A.

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The Zacks Consensus Estimate for Tapestry’s fiscal 2027 earnings implies year-over-year growth of 12.2%, whereas the same for fiscal 2028 indicates an uptick of 9.8%. Earnings estimates for fiscal 2027 and 2028 have been increased by 13 cents and decreased by 8 cents, respectively, over the past seven days.

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TPR’s Zacks Rank & Key Picks

Tapestry currently carries a Zacks Rank #3 (Hold).

FIGS, Inc. FIGS is an apparel company focused on the healthcare industry. Its offerings include lab coats, jackets, footwear, bags, socks and other accessories used by healthcare professionals. The company carries a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The Zacks Consensus Estimate for FIGS’ current financial-year earnings and sales suggests growth of 89.5% and 18.2%, respectively, from the year-ago actuals. FIGS delivered a trailing four-quarter average earnings surprise of 201.8%.

Boot Barn Holdings, Inc. BOOT is the largest lifestyle retailer in the United States, specializing in western and work-related footwear, apparel and accessories. The company also holds a Zacks Rank #2 at present. 

The Zacks Consensus Estimate for Boot Barn’s current fiscal-year earnings and sales suggests growth of 22.6% and 15.7%, respectively, from the year-ago actuals. BOOT delivered a trailing four-quarter average earnings surprise of 11.4%.

Fossil Group, Inc. FOSL is involved in designing, marketing and distributing consumer fashion accessories. It also carries a Zacks Rank #2.

The Zacks Consensus Estimate for Fossil Group’s current fiscal-year earnings suggests growth of 96.7% from the year-ago actuals. FOSL delivered a trailing four-quarter average negative earnings surprise of 236.2%.

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