TPR

Cyclical

Tapestry, Inc.

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Market Data

Financials

XBRL · SEC EDGAR

2008–2025(18yr)

Revenue

Net Income

Free CF

Metric	FY 2008	FY 2009	FY 2010	FY 2011	FY 2012	FY 2013	FY 2014	FY 2015	FY 2016	FY 2017	FY 2018	FY 2019	FY 2020	FY 2021	FY 2022	FY 2023	FY 2024	FY 2025Latest	YoY
Revenue	$3.2B	$3.2B	$3.6B	$4.2B	$4.8B	$5.1B	$4.8B	$4.2B	$4.5B	$4.5B	$5.9B	$6.0B	$5.0B	$5.7B	$6.7B	$6.7B	$6.7B	$7.0B	+5.1%
Gross Profit	$2.4B	$2.3B	$2.6B	$3.0B	$3.5B	$3.7B	$3.3B	$2.9B	$3.1B	$3.1B	$3.9B	$4.1B	$3.2B	$4.1B	$4.7B	$4.7B	$4.9B	$5.3B	+8.2%
Gross Margin	75.7%	71.9%	73.0%	72.7%	72.8%	72.9%	68.6%	69.4%	67.9%	68.6%	65.5%	67.3%	65.3%	71.0%	69.6%	70.8%	73.3%	75.4%	+2.1pp
Operating Income	$1.1B	$971.9M	$1.2B	$1.3B	$1.5B	$1.5B	$1.1B	$618.0M	$653.5M	$787.4M	$670.8M	$814.1M	-$550.8M	$968.0M	$1.2B	$1.2B	$1.1B	$415.0M	-63.6%
Operating Margin	36.1%	30.1%	31.9%	31.4%	31.7%	30.0%	23.3%	14.7%	14.5%	17.5%	11.4%	13.5%	-11.1%	16.8%	17.6%	17.6%	17.1%	5.9%	-11.2pp
Net Income	$783.1M	$623.4M	$734.9M	$880.8M	$1.0B	$1.0B	$781.3M	$402.4M	$460.5M	$591.0M	$397.5M	$643.4M	-$652.1M	$834.2M	$856.3M	$936.0M	$816.0M	$183.2M	-77.5%
Net Margin	24.6%	19.3%	20.4%	21.2%	21.8%	20.4%	16.3%	9.6%	10.3%	13.2%	6.8%	10.7%	-13.1%	14.5%	12.8%	14.1%	12.2%	2.6%	-9.6pp
Free Cash Flow	$748.6M	$672.1M	$909.8M	$885.5M	$1.0B	$1.2B	$765.8M	$738.1M	$362.2M	$570.7M	$729.3M	$517.5M	$201.6M	$1.2B	$759.3M	$791.0M	$1.1B	$1.1B	-4.6%
FCF Margin	23.5%	20.8%	25.2%	21.3%	21.8%	23.1%	15.9%	17.6%	8.1%	12.7%	12.4%	8.6%	4.1%	21.0%	11.4%	11.9%	17.2%	15.6%	-1.6pp
EPS (Diluted)	$2.17	$1.91	$2.33	$2.92	$3.53	$3.61	$2.79	$1.45	$1.65	$2.09	$1.38	$2.21	$-2.34	$2.95	$3.17	$3.88	$3.50	$0.82	-76.6%

Total Debt$2.4B

Cash & Equiv.$1.1B

Net Debt$1.3B

4 min read

1. THE BIG PICTURE

Tapestry is successfully pivoting from a traditional retailer to a high-tech "Expressive Luxury" house, evidenced by its sector-leading 22.4% operating margins and 21.4% free cash flow margin. While Tapestry, Inc. is currently a "house divided"—with Coach surging 25% while Kate Spade sales contract—it is using its superior cash generation to retire shares at a rate far exceeding its peers. By combining predictive AI for inventory management with an aggressive 10.2% buyback yield, Tapestry is effectively engineering earnings growth even as it faces a cooling global market for discretionary goods.

2. WHERE THE RISKS HIT HARDEST

Tapestry’s Omni-Channel Leadership is threatened by Macroeconomic Sensitivity because its heavy investment in physical retail and outlet stores relies on consistent mall traffic; an economic recession or a spike in unemployment would turn these high-traffic locations into fixed-cost burdens (10-K Item 1A). Furthermore, Tapestry, Inc.'s Stated Competitive Advantage in brand recognition is threatened by Trade Policy and Tariffs. Because Tapestry relies on manufacturing in Vietnam, Cambodia, and mainland China to maintain its 75.5% gross margin—the highest among its peers—any imposition of new tariffs would force Tapestry, Inc. to either raise prices on discretionary luxury items or absorb costs that would immediately erode its primary profitability edge.

3. WHAT THE NUMBERS SAY TOGETHER

The financial data reveals a company that is outperforming its industry on almost every efficiency metric despite significant internal brand divergence. While TTMTTMTrailing Twelve Months — the most recent full year of financial data, updated on a rolling basis each quarter revenue growth stands at a modest 5.1%, the most recent quarter showed a 14% jump to $2.50 billion, suggesting a sharp acceleration during the holiday season driven by the "Amplify" strategy (8-K). This growth is not uniform: the 25% surge at Coach is masking a 14% decline at Kate Spade and a 6% drop in Japan (8-K).

Supplemental signals suggest a tug-of-war between management and the market. While Tapestry raised its fiscal 2026 outlook and reported a significant earnings jump to $2.68 per diluted share, short interest remains notable at 7.1% of the float (Yahoo Finance). This indicates that a segment of the market remains skeptical of Tapestry, Inc.'s ability to sustain this momentum, particularly given its $2.39 billion debt load and the discretionary nature of its products. However, the 10.2% buyback yield—the highest in the peer group—provides a powerful structural tailwind for earnings per share that peers like Nike (2.0%) or TJX (1.3%) cannot match.

4. IS IT WORTH IT AT THIS PRICE?

At 20.7x Forward P/EP/EPrice-to-Earnings ratio — share price divided by annual earnings per share; how much investors pay per dollar of profit. Higher P/E = higher growth expectations, the market is pricing in approximately 8.5% long-term growth (CAPM analysis). This represents a modest discount to the peer median of 24.5x, which is difficult to justify given that Tapestry leads its peer group in revenue growth, operating margin, and FCFFCFFree Cash Flow — cash left after paying for operations and capital investments; what the company can actually spend, save, or return to shareholders margin. Tapestry, Inc. is currently the "cheapest" in the group on a Forward P/EP/EPrice-to-Earnings ratio — share price divided by annual earnings per share; how much investors pay per dollar of profit. Higher P/E = higher growth expectations basis, yet it delivers the highest return on capital through buybacks.

The current price is supported by Tapestry, Inc.’s actual trajectory; the market-implied 8.5% growth rate is well below the 25% EPSEPSEarnings Per Share — the company's net profit divided by its share count; the most common per-share profitability metric growth management is targeting for fiscal 2026 (8-K). However, the sensitivity is high: if growth were to slow to 5%, the justified multiple would fall to 12.1x, representing significant downside (CAPM analysis). Investors are essentially getting a best-in-class margin profile at a discount, provided they believe the Coach brand can continue to carry the weight of the underperforming Kate Spade and Stuart Weitzman lines.

5. WHAT WOULD CHANGE THIS VIEW?

Cautious if Kate Spade’s revenue decline (currently -14%) fails to stabilize in the next two quarters, suggesting the brand is losing its "Expressive Luxury" relevance permanently.
Constructive if the operating margin expands beyond the projected 180 basis points, proving that the integration of generative AI into pricing and marketing is yielding structural cost advantages.
Cautious if net debt-to-FCFFCFFree Cash Flow — cash left after paying for operations and capital investments; what the company can actually spend, save, or return to shareholders leverage rises significantly above its current 0.8x level, especially if cash flows are diverted from buybacks to service the $2.39 billion debt load during a period of rising interest rates.

6. BOTTOM LINE

Structural Advantage: A high-margin brand powerhouse anchored by Coach, supported by a sophisticated digital platform that converts 21.4% of revenue into free cash flow. Bottom Line: Tapestry is a best-in-class operator priced at a discount to its slower-growing peers, offering an attractive entry point for those who believe its "futurespeed" strategy can outrun macroeconomic headwinds.

Source: Synthesis · LLM Analysis

4 min read

1. Top 5 Material Risks

Trade Policy and Tariffs: Tapestry, Inc. relies on free trade agreements and global manufacturing, with primary production for Coach and Kate Spade located in Vietnam, Cambodia, the Philippines, India, and mainland China. New or increased tariffs could force Tapestry, Inc. to absorb costs or raise prices, directly impacting revenue and profitability.
Macroeconomic Sensitivity: As a provider of discretionary items, Tapestry, Inc. is highly sensitive to economic downturns, inflation, and unemployment. These factors reduce disposable income and consumer traffic in malls and shopping centers, which are critical to Tapestry, Inc.’s retail performance.
Global Operational Risks: With approximately 40.0% of net sales originating outside the U.S. in fiscal year 2025, Tapestry, Inc. faces risks from geopolitical instability, currency exchange rate fluctuations, and potential changes in trade agreements that could negatively impact gross margin rates.
Supply Chain and Fulfillment: Tapestry, Inc. depends on a limited number of fulfillment centers. Disruptions—whether from port congestion, labor disputes, or geopolitical events like attacks in the Red Sea—can lead to increased inbound freight costs and inventory losses.
Brand Relevance and Digital Execution: Tapestry, Inc.’s growth depends on its ability to anticipate fashion trends and execute an omni-channel strategy. Failure to respond to changing consumer preferences or effectively manage digital and e-commerce priorities could lead to a loss of brand desirability and reduced sales.

2. Company-Specific Risks

Wholesale Concentration: The wholesale business accounted for approximately 13% of total net sales for fiscal 2025; consolidations or bankruptcies among these customers could concentrate ownership and reduce the number of retail outlets carrying Tapestry, Inc. products.
Lease Obligations: Tapestry, Inc. operates through non-cancelable, multi-year "net" leases. If a store becomes uneconomical, Tapestry, Inc. remains obligated for base rent payments for the balance of the lease term, which can negatively impact financial results.
Acquisition Integration: Tapestry, Inc. maintains M&AM&AMergers & Acquisitions — the buying, selling, or combining of companies flexibility as part of its growth strategy. The integration of acquired businesses is complex and costly, and failure to realize expected synergies or revenue targets could lead to non-cash impairment charges on goodwill and intangible assets.
Capital Allocation: Tapestry, Inc.’s dividend and share repurchase programs (including the $2.00 billion ASR program announced in November 2024) require significant cash flow. Any inability to maintain these programs at expected levels could negatively impact investor confidence and Tapestry, Inc.’s stock price.

3. Regulatory/Legal Risks

Global Tax Reform: Tapestry, Inc. is monitoring the impact of the OECD’s Global Anti-Base Erosion Rules (GloBE). While fiscal 2025 was not materially impacted, Tapestry, Inc. believes the Qualifying Domestic Minimum Top-Up Tax (QDMTT) could negatively impact its effective tax rate in fiscal 2026 and beyond.
Data Privacy Compliance: Tapestry, Inc. must comply with a complex web of international and state-level privacy laws, including the GDPR, CCPA/CPRA, and various other U.S. state privacy acts. Failure to comply or a security breach could result in sizable fines and significant litigation costs.
Anti-Corruption Laws: Tapestry, Inc. is subject to the Foreign Corrupt Practices Act (FCPA) and the U.K. Bribery Act. Compliance requires rigorous oversight of independent manufacturers and suppliers, and any violations could lead to legal liability and reputational damage.
Exclusive Forum Provision: Tapestry, Inc.’s bylaws designate the Circuit Court for Baltimore City, Maryland as the exclusive forum for certain legal actions, which may limit a stockholder’s ability to bring claims in other jurisdictions.

4. Financial Impact Map

Trade Policy and Tariffs → Revenue and Profitability → Potential cost absorption or price increases on goods manufactured in Vietnam, Cambodia, the Philippines, India, and mainland China.
Macroeconomic Sensitivity → Net Sales → Decline in consumer purchases of discretionary items during recessionary periods or high unemployment.
Global Operational Risks → Gross Margin Rates → Negative impact from foreign currency exchange rate fluctuations and increased supply costs in international markets.
Supply Chain and Fulfillment → Inbound Freight Costs → Increased costs and potential inventory losses due to port congestion or shipping constraints.
Indebtedness → Liquidity and Capital Expenditures → $2.39 billion in consolidated debt as of June 28, 2025, requires compliance with a 4.00:1.00 net leverage ratio, potentially forcing reduced investments if cash flows are insufficient.

Source: 10-K Item 1A · LLM Analysis

Recent Filings

Form	Filed	Period
10-Q	Feb 2026	Dec 2025
8-K	Feb 2026	—
14A	Sep 2025	—
10-K	Aug 2025	Jun 2025