Tapestry, Inc.TPRNYSE
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Executive Summary
Latest Data: Jun 2025Consumer Cyclical•Luxury Goods
$31.7BLarge Cap
A mid-sized company, operating profitably priced at a premium.
Key Investment Themes
Mature business (5% growth)
Premium valuation (60.6x P/E)
Strong cash generation (16% FCF margin)
Business Narrative
Tapestry, Inc. provides luxury accessories and branded lifestyle products in the United States, Japan, Greater China, and internationally. The company operates in three segments: Coach, Kate Spade, and Stuart Weitzman.
Consumer CyclicalLuxury Goods
Recurring Revenue
Revenue Mix
Single segment business
Bull Case
- +Strong cash generation funds reinvestment and shareholder returns
Bear Case
- -Premium valuation leaves limited margin of safety
- -High leverage amplifies downside risk in economic downturns
Company at a Glance
Business Performance
Key Highlights
Positive Signals
- Excellent return on equity above 20%
Watch Areas
- Thin profit margins under 5%
- Elevated debt levels may limit financial flexibility
- Trading 102% above 5-year average valuation
- Premium valuation requires continued strong execution
Financial Health
Liquidity
Watch
Current Ratio1.87
1.0-2.0 = Adequate
Cash & Equivalents$1.1B
Leverage
Concern
Debt / Equity4.55
>2.0 = High leverage
Interest Coverage4.86x
2-5x = Adequate
Efficiency
Concern
Return on Equity21.4%
≥15% = Excellent
Return on Capital6.6%
<8% = Weak
Valuation Assessment
Market Cap
$31.7B
Large Cap
P/E (TTM)
60.6x
Elevated
vs 5Y avg: 29.9x (+102%)
P/S (TTM)
4.2x
In-line
vs 5Y avg: 1.8x (+135%)
EV/EBITDA
38.2x
Elevated
vs 5Y avg: 15.7x
(+143%)
(+143%)
P/E Historical Range (5Y)
Min: 9.4xAvg: 29.9xNow: 60.6xMax: 103.1x
P/S Historical Range (5Y)
Min: 1.2xAvg: 1.8xNow: 4.2xMax: 2.7x
EV/EBITDA Historical Range (5Y)
Min: 8.0xAvg: 15.7xNow: 38.2xMax: 41.2x
Valuation Corridor
CHEAP
FCF Yield
5.3%
vs Cost of Capital ~8.0% = Strong
P/E Corridor (5Y)60.6x
9.4xFair: 9.4x-70.9x103.1x
P/S Corridor (5Y)4.2x
1.2xFair: 1.2x-2.4x2.7x
EV/EBITDA Corridor (5Y)38.2x
8.0xFair: 8.0x-30.0x41.2x
Detailed Financials
Comprehensive financial statement data for deep analysis
| Metric | Jun 21 | Jun 22 | Jun 23 | Jun 24 | Jun 25 |
|---|---|---|---|---|---|
| Return on Equity | - | - | - | - | - |
| Return on Invested Capital | - | - | - | - | - |
| Gross Margin | 71.0% | 69.6%↓2.1% | 70.8%↑1.7% | 73.3%↑3.5% | 75.4%↑2.9% |
| Operating Margin | 16.8% | 17.6%↑4.4% | 17.6%↑0.1% | 17.1%↓2.9% | 5.9%↓65.4% |
| Net Margin | 14.5% | 12.8%↓11.8% | 14.1%↑9.7% | 12.2%↓13.0% | 2.6%↓78.6% |
| Earnings Yield | - | - | - | - | - |
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