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Tapestry (TPR)
NYSE:TPR

Tapestry (TPR) AI Stock Analysis

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Tapestry

(NYSE:TPR)

Rating:76Outperform
Price Target:
$94.00
▲(19.44%Upside)
Tapestry's overall stock score of 76 reflects its strong financial performance, particularly in profitability and operational efficiency, alongside positive earnings call outcomes that underscore its market growth and strategic positioning. Technical analysis supports upward momentum, although the stock may be nearing overbought territory. Valuation appears reasonable but not significantly undervalued. Challenges with leverage and specific brand performance require monitoring.
Positive Factors
Brand Performance
Momentum at the Coach brand is accelerating, with ex-FX brand growth increasing to 15% globally and 19% in North America.
Earnings Outlook
TPR delivered a strong 3Q beat and raised its FY outlook.
Operational Efficiency
$300M 'Program Accelerate' expense efficiencies are driving accelerated bottom-line growth.
Negative Factors
Brand Challenges
Kate remains disappointing, though turnaround efforts are only starting to get underway.
Tariffs
At least a $90 million tariff impact is expected if unmitigated, affecting cost structure.

Tapestry (TPR) vs. SPDR S&P 500 ETF (SPY)

Tapestry Business Overview & Revenue Model

Company DescriptionTapestry, Inc. (TPR) is a leading New York-based house of modern luxury accessories and lifestyle brands. The company operates in the global fashion and retail sectors and is best known for its portfolio of renowned brands, including Coach, Kate Spade New York, and Stuart Weitzman. These brands offer a diverse range of products, such as handbags, footwear, apparel, and various accessories, catering to a wide demographic of discerning consumers.
How the Company Makes MoneyTapestry, Inc. generates revenue primarily through the sale of its luxury fashion products under its flagship brands: Coach, Kate Spade, and Stuart Weitzman. The company operates a multi-channel distribution model that includes retail stores, e-commerce platforms, and wholesale partnerships. Retail sales are driven through Tapestry's network of directly operated stores and e-commerce websites, providing a high-margin revenue stream. Wholesale distribution through department stores, specialty retailers, and international distributors also contributes significantly to revenue. Additionally, Tapestry benefits from licensing agreements, which allow third parties to produce and sell products under its brand names, providing a steady stream of royalty income. Strategic partnerships and collaborations further enhance brand visibility and market reach, supporting sales growth and brand equity.

Tapestry Earnings Call Summary

Earnings Call Date:May 08, 2025
(Q3-2025)
|
% Change Since: 5.28%|
Next Earnings Date:Aug 14, 2025
Earnings Call Sentiment Positive
The earnings call reflects a strong performance with record-breaking revenue and earnings, driven by significant growth at Coach and robust global expansion. While there are challenges, particularly with Kate Spade and potential tariff impacts, the company's strategic initiatives and market positioning have led to a positive outlook.
Q3-2025 Updates
Positive Updates
Record Third Quarter Revenue and Earnings
Tapestry delivered record third quarter earnings per share, which increased 27% compared to the prior year. Total revenue gains were 8% at constant currency, driven by 15% growth at Coach.
Strong Global Growth
International revenue rose 8%, with a 35% increase in Europe and a 5% increase in Greater China. North America revenue increased by 9%.
New Customer Acquisition
In North America, Tapestry acquired over 1.2 million new customers, with two-thirds being Gen Z and Millennials. This demographic transacts at higher average unit retail (AUR) than the rest of the customer base.
Coach Brand Performance
Coach achieved a 15% top line increase, with significant gains in leather goods and handbags, including a nearly 100 basis point increase in margins.
Digital and Omnichannel Growth
Digital grew at a mid-teens rate, representing approximately 30% of revenue. Global brick and mortar sales rose at a mid-single digit rate.
Negative Updates
Kate Spade Revenue Decline
Kate Spade's revenue declined 12% at constant currency. The brand is undergoing a reset which includes reducing promotional activity and focusing on long-term growth.
Japan Sales Decline
Sales in Japan declined 2% due to a challenging market environment.
Potential Tariff Impact
The company is taking actions to mitigate potential impacts from tariffs, with $900 million of cost of goods sold related to imports into the U.S.
Company Guidance
During the Tapestry Conference Call on May 8, 2025, the company provided robust guidance following their record-breaking third quarter results. Tapestry reported an 8% increase in total revenue at constant currency, driven by a 15% growth in the Coach brand and significant geographic gains, including a 35% rise in Europe and a 9% increase in North America. The company acquired 1.2 million new customers in North America, with two-thirds being Gen Z and Millennials. Digital sales grew at a mid-teens rate and represented about 30% of revenue. Tapestry achieved a gross margin of 76.1%, the highest in over 15 years, and an EPS of $1.03, up 27% from the previous year. They raised their fiscal 2025 earnings outlook to approximately $5 per share, maintaining the target despite a complex global landscape. The company emphasized brand building, customer acquisition, and innovative product offerings as key drivers of their success.

Tapestry Financial Statement Overview

Summary
Tapestry shows strong financial health with high profitability margins and efficient cash flow conversion. The income statement reveals consistent revenue and profit growth, while the balance sheet indicates a high leverage position. Cash flow is stable, though recent declines in free cash flow growth need attention.
Income Statement
82
Very Positive
Tapestry's income statement shows strong profitability with a consistent gross profit margin of around 73%, and an impressive net profit margin of 12.5% TTM (Trailing-Twelve-Months). The revenue growth rate of 3.1% from 2024 to TTM indicates moderate growth. EBIT and EBITDA margins remain robust at 17.8% and 19.9% respectively, showcasing efficient cost management and operational strength.
Balance Sheet
67
Positive
The balance sheet reflects a moderate debt-to-equity ratio of 2.75 TTM, suggesting a high leverage position which could pose risks in volatile markets. However, the company maintains a strong equity ratio of 20.4%, indicating a solid asset base. The return on equity stands at a healthy 57.6% TTM, demonstrating strong profitability relative to shareholder investment.
Cash Flow
75
Positive
Tapestry's cash flow statement reveals a stable cash flow generation with an operating cash flow to net income ratio of 1.19 TTM, indicating efficient cash conversion. The free cash flow to net income ratio is similarly strong at 1.04 TTM. The free cash flow growth rate of -22.2% from 2024 to TTM shows some decline, possibly due to increased capital expenditures or other investments.
Breakdown
TTMJun 2024Sep 2023Sep 2022Sep 2021Jun 2020
Income StatementTotal Revenue
6.88B6.67B6.66B6.68B5.75B4.96B
Gross Profit
5.05B4.89B4.71B4.65B4.08B3.24B
EBIT
1.23B1.14B1.17B1.18B968.00M-550.80M
EBITDA
1.43B1.37B1.36B1.37B1.19B-315.80M
Net Income Common Stockholders
859.60M816.00M936.00M856.30M834.20M-652.10M
Balance SheetCash, Cash Equivalents and Short-Term Investments
1.06B7.20B741.50M953.20M2.02B1.43B
Total Assets
7.31B13.40B7.12B7.27B8.38B7.92B
Total Debt
4.11B8.77B3.29B3.26B3.44B4.49B
Net Debt
3.07B2.62B2.57B2.47B1.42B3.05B
Total Liabilities
5.81B10.50B4.84B4.98B5.12B5.65B
Stockholders Equity
1.49B2.90B2.28B2.29B3.26B2.28B
Cash FlowFree Cash Flow
892.20M1.15B791.00M759.30M1.21B201.60M
Operating Cash Flow
1.03B1.26B975.20M853.20M1.32B407.00M
Investing Cash Flow
392.40M-1.04B5.70M-253.60M-91.00M44.30M
Financing Cash Flow
-7.33B5.21B-1.04B-1.78B-666.00M5.90M

Tapestry Technical Analysis

Technical Analysis Sentiment
Neutral
Last Price78.70
Price Trends
50DMA
72.78
Positive
100DMA
74.62
Positive
200DMA
62.64
Positive
Market Momentum
MACD
1.67
Positive
RSI
54.55
Neutral
STOCH
35.92
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TPR, the sentiment is Neutral. The current price of 78.7 is below the 20-day moving average (MA) of 79.76, above the 50-day MA of 72.78, and above the 200-day MA of 62.64, indicating a neutral trend. The MACD of 1.67 indicates Positive momentum. The RSI at 54.55 is Neutral, neither overbought nor oversold. The STOCH value of 35.92 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for TPR.

Tapestry Risk Analysis

Tapestry disclosed 34 risk factors in its most recent earnings report. Tapestry reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 2 New Risks
1.
Item 2. Unregistered sales of equity securities, use of proceeds and issuer purchases of equity securities Q4, 2024
2.
Item 5. Other information Q4, 2024

Tapestry Peers Comparison

Overall Rating
UnderperformOutperform
Sector (62)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
TPTPR
76
Outperform
$16.32B20.6740.27%1.78%2.67%1.31%
SISIG
70
Outperform
$2.76B5.562.04%1.79%-3.98%-93.50%
63
Neutral
$793.83M-8.75%7.08%-42.22%
62
Neutral
$6.90B11.242.93%3.89%2.68%-24.71%
49
Neutral
$607.32M32.94%11.89%66.22%
49
Neutral
$2.05B-120.18%-12.34%-574.65%
47
Neutral
$331.27M-195.94%-22.86%-38.76%
* Consumer Cyclical Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
TPR
Tapestry
78.70
36.33
85.74%
CPRI
Capri Holdings
17.72
-16.25
-47.84%
SIG
Signet Jewelers
75.13
-29.84
-28.43%
REAL
RealReal
5.66
1.71
43.29%
LUXE
LuxExperience
9.54
4.02
72.83%
LANV
Lanvin Group Holdings
2.29
0.71
44.94%

Tapestry Corporate Events

Private Placements and Financing
Tapestry Secures New $2 Billion Credit Facility
Neutral
May 23, 2025

On May 22, 2025, Tapestry, Inc. announced a new $2 billion unsecured revolving credit facility to replace its existing credit facility from 2022. This new facility, maturing in 2030, is designed to support the company’s working capital needs, capital expenditures, and other corporate purposes. It offers flexibility with borrowing options in multiple currencies and includes provisions for letters of credit and swing line loans. The agreement also outlines various covenants and conditions, including a leverage ratio requirement and events of default, which could impact the company’s financial operations and stakeholder interests.

The most recent analyst rating on (TPR) stock is a Hold with a $52.00 price target. To see the full list of analyst forecasts on Tapestry stock, see the TPR Stock Forecast page.

Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.