Narrow-Moat Tapestry Performing Well Despite Some Macroeconomic Issues; Shares Very Attractive

Boosted by higher average retail prices, Tapestry met our expectations in its (September-ended) fiscal 2023 first quarter. Although the firm slightly lowered guidance for the rest of the fiscal year due to the strong U.S. dollar, some impact on sales in North America from slower consumer spending, and ongoing virus-related restrictions in China, we think demand for accessories and luxury goods is holding up relatively well. We do not expect to make any material change to our $54 fair value estimate and view Tapestry as very undervalued. Our narrow moat rating on the company is based on the value of the Coach brand, which we think has helped it overcome the many challenges that have faced accessories and apparel firms over the last few quarters.