-Tapestry kept up a brisk pace of sales in the April-June quarter, with revenue likely growing 5.5%, thanks to growing demand for its stylish handbags that are more affordable than traditional luxury labels.

 Accessible luxury companies, including Tapestry and Ralph Lauren, are gaining momentum in an economy hit by tariffs and inflation, where younger shoppers are being more prudent with their purchases. Shoppers are walking away from the more opulent wares offered by luxury firms, including Kering .

Revenue in the New York-based company's fiscal fourth quarter is expected to have climbed to $1.7 billion, its second-quickest pace of growth in 12 quarters, according to LSEG data. Last week, Tapestry's rival and Michael Kors-owner Capri forecast quarterly revenue above estimates.

Shares of Tapestry, which beat Wall Street revenue estimates in the past four quarters, have surged more than two-thirds this year. Revenue from the Coach brand, which accounted for 82% of the company's revenue for the first nine months of the year, likely grew almost 11% in the June quarter, according to LSEG estimates.

"They've successfully repositioned the brand to target younger demographics with their Tabby and Brooklyn Bag brands," said Adam Steffanus, a managing director at Advisory Research Investment Management, which owns Tapestry stock. Steffanus noted that sales of European luxury brands LVMH  and Chanel have suffered because they raised their prices too high.

Tapestry said in May that it was well covered on cross-border tariff risk thanks to less than 10% of production from China and a diversified manufacturing base that includes 70% of production from Vietnam, Cambodia, and the Philippines.

Still, Tapestry's other brand, Kate Spade, has been a drag on its performance. The brand has suffered from heavy promotions that have hurt its status as an upscale brand, Steffanus said. 

Morningstar analyst David Swartz said Coach could raise prices without driving away customers because of its high margins, but Tapestry cannot do the same for Kate Spade handbags.

Kate Spade's revenue likely fell 13% in the April-June period, according to LSEG estimates.

Tapestry reports earnings on Thursday. At least 16 analysts rate it "buy" or higher, with five rating it "hold." It has no "sell" calls, according to LSEG data.