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Tapestry (TPR) Up More Than 40% in 3 Months on Solid Execution
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Tapestry, Inc. (TPR - Free Report) , one of the widely recognized names in the apparel and footwear industry, has exhibited an outstanding run on the bourses in the past three months. Thanks to its operational initiatives — strengthening of omni-channel solutions, expanding customer reach and focus on brand innovation — the stock has outpaced the Zacks Retail - Apparel And Shoes industry and the Retail-Wholesale sector. In the said period, shares of this New York-based company have soared about 46.5% compared with the industry’s rally of 24.5%. Meanwhile, the sector declined 1.2%.
Additionally, an uptrend in the Zacks Consensus Estimate echoes the same sentiment. The consensus estimates for the current and next financial year have increased about 12.3% and 8.8% to $2.55 and $2.84, respectively, over the past 60 days. Notably, this Zacks Rank #2 (Buy) stock’s long-term earnings growth rate of 10% indicates its inherent strength.
Some Fact Checks
Tapestry is benefiting from the successful execution of Acceleration Program. The program is aimed at transforming the company into a leaner and more responsive organization. It also intends to build significant data and analytics capabilities with focus on enhancing digital and omnichannel capabilities, and operating with a clearly defined path and strategy for each of its brands namely Coach, Kate Spade and Stuart Weitzman.
Notably, the company continued with its sturdy e-commerce performance during the second quarter of fiscal 2021 with digital sales rising in triple digits compared with the year-ago period. Also, this house of modern luxury accessories and lifestyle brands witnessed significant improvement in overall sales trends on a sequential basis.
Meanwhile, Tapestry's focus on optimizing its cost structure and attempt to lower promotional activity and improve Average Unit Retail across brands also remain noteworthy. These are providing cushion to margins. Notably, the company has been targeting reductions in SG&A expenses and rightsizing store fleet. We note that the company’s second-quarter adjusted operating margin increased 380 basis points to 24.4%. Also, management remains on track to realize about $300 million in gross run rate expense savings, including $200 million projected for fiscal 2021.
The company’s long-term growth drivers include deep engagement with consumers, innovative and compelling products, and entry into under-penetrated markets. Notably, the company’s compelling pricing strategy, smaller format locations and cost-effective global sourcing model have been enhancing store productivity.
From the growth perspective, China remains one of the prominent markets for Tapestry. The company has been accelerating growth in the region through tailored and innovative product assortments, enhanced marketing and expanded reach across direct channels and third-party online distribution. Impressively, the company registered year-over-year increase of 30% in sales in Mainland China during the second quarter of fiscal 2021.
Again, given stronger-than-expected results in the first half and anticipating a sustained recovery, Tapestry now envisions revenues for fiscal 2021 to improve at a high-single digit rate on a 52-week basis and around 10% on a 53-week basis. The company continues to expect top-line inflection and robust bottom-line growth during the second half of the fiscal year.
Boot Barn Holdings (BOOT - Free Report) has a long-term earnings growth rate of 20%. It currently carries a Zacks Rank #2.
MarineMax (HZO - Free Report) has a trailing four-quarter earnings surprise of 99.9%, on average. The stock carries a Zacks Rank #2.
Zacks Top 10 Stocks for 2021
In addition to the stocks discussed above, would you like to know about our 10 best buy-and-hold tickers for the entirety of 2021?
Last year's 2020 Zacks Top 10 Stocks portfolio returned gains as high as +386.8%. Now a brand-new portfolio has been handpicked from over 4,000 companies covered by the Zacks Rank. Don’t miss your chance to get in on these long-term buys.
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Tapestry (TPR) Up More Than 40% in 3 Months on Solid Execution
Tapestry, Inc. (TPR - Free Report) , one of the widely recognized names in the apparel and footwear industry, has exhibited an outstanding run on the bourses in the past three months. Thanks to its operational initiatives — strengthening of omni-channel solutions, expanding customer reach and focus on brand innovation — the stock has outpaced the Zacks Retail - Apparel And Shoes industry and the Retail-Wholesale sector. In the said period, shares of this New York-based company have soared about 46.5% compared with the industry’s rally of 24.5%. Meanwhile, the sector declined 1.2%.
Additionally, an uptrend in the Zacks Consensus Estimate echoes the same sentiment. The consensus estimates for the current and next financial year have increased about 12.3% and 8.8% to $2.55 and $2.84, respectively, over the past 60 days. Notably, this Zacks Rank #2 (Buy) stock’s long-term earnings growth rate of 10% indicates its inherent strength.
Some Fact Checks
Tapestry is benefiting from the successful execution of Acceleration Program. The program is aimed at transforming the company into a leaner and more responsive organization. It also intends to build significant data and analytics capabilities with focus on enhancing digital and omnichannel capabilities, and operating with a clearly defined path and strategy for each of its brands namely Coach, Kate Spade and Stuart Weitzman.
Notably, the company continued with its sturdy e-commerce performance during the second quarter of fiscal 2021 with digital sales rising in triple digits compared with the year-ago period. Also, this house of modern luxury accessories and lifestyle brands witnessed significant improvement in overall sales trends on a sequential basis.
Meanwhile, Tapestry's focus on optimizing its cost structure and attempt to lower promotional activity and improve Average Unit Retail across brands also remain noteworthy. These are providing cushion to margins. Notably, the company has been targeting reductions in SG&A expenses and rightsizing store fleet. We note that the company’s second-quarter adjusted operating margin increased 380 basis points to 24.4%. Also, management remains on track to realize about $300 million in gross run rate expense savings, including $200 million projected for fiscal 2021.
The company’s long-term growth drivers include deep engagement with consumers, innovative and compelling products, and entry into under-penetrated markets. Notably, the company’s compelling pricing strategy, smaller format locations and cost-effective global sourcing model have been enhancing store productivity.
From the growth perspective, China remains one of the prominent markets for Tapestry. The company has been accelerating growth in the region through tailored and innovative product assortments, enhanced marketing and expanded reach across direct channels and third-party online distribution. Impressively, the company registered year-over-year increase of 30% in sales in Mainland China during the second quarter of fiscal 2021.
Again, given stronger-than-expected results in the first half and anticipating a sustained recovery, Tapestry now envisions revenues for fiscal 2021 to improve at a high-single digit rate on a 52-week basis and around 10% on a 53-week basis. The company continues to expect top-line inflection and robust bottom-line growth during the second half of the fiscal year.
3 More Stocks Worth a Look
Hibbett Sports has a long-term earnings growth rate of 17.2%. It presently sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Boot Barn Holdings (BOOT - Free Report) has a long-term earnings growth rate of 20%. It currently carries a Zacks Rank #2.
MarineMax (HZO - Free Report) has a trailing four-quarter earnings surprise of 99.9%, on average. The stock carries a Zacks Rank #2.
Zacks Top 10 Stocks for 2021
In addition to the stocks discussed above, would you like to know about our 10 best buy-and-hold tickers for the entirety of 2021?
Last year's 2020 Zacks Top 10 Stocks portfolio returned gains as high as +386.8%. Now a brand-new portfolio has been handpicked from over 4,000 companies covered by the Zacks Rank. Don’t miss your chance to get in on these long-term buys.
Access Zacks Top 10 Stocks for 2021 today >>