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Tapestry Inc TPR

Morningstar Rating
$47.48 +0.80 (1.71%)
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Company Report

The New Tapestry Will Continue to Be Led by Coach, but Capri Will Bolster Position in Global Luxury

We believe Coach (74.5% of fiscal 2023 revenue) has the brand strength and pricing power to provide a narrow moat for Tapestry. The firm has turned Coach around through store closures, restrictions on discounting, and increased e-commerce, the last of which took off during the pandemic. The brand is a leader in the attractive handbag category and consistently generates gross margins above 70%. Further, we expect growth in complementary categories like footwear and fashion. We anticipate China to be a key growth region for Coach, as according to Bain, Chinese consumers will make up 38%-40% of worldwide luxury goods spending in 2030, up from 33% in 2019. We forecast Coach’s Greater China sales to reach $1.3 billion in fiscal 2033 (20% of sales), up from $897 million in fiscal 2023 (18% of sales).

Price vs Fair Value

TPR is trading at a 24% discount.
Price
$45.55
Fair Value
$75.00
Uncertainty
High
1-Star Price
$69.00
5-Star Price
$99.00
Economic Moat
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Capital Allocation
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Bulls Say, Bears Say

Bulls

Coach is one of the share leaders in the desirable category of handbags and other leather goods. Coach bags achieve better pricing than many others, allowing for gross margins above 70%.

Bears

Kate Spade and Stuart Weitzman do not have the pricing power or profitability of Coach and therefore detract from Tapestry’s overall profitability.

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News

Trading Information

Previous Close Price
$46.68
Day Range
$46.7747.62
52-Week Range
$25.9948.80
Bid/Ask
$46.97 / $47.80
Market Cap
$10.89 Bil
Volume/Avg
3.1 Mil / 3.8 Mil

Key Statistics

Price/Earnings (Normalized)
11.07
Price/Sales
1.66
Dividend Yield (Trailing)
2.84%
Dividend Yield (Forward)
2.95%
Total Yield
6.55%

Company Profile

Coach, Kate Spade, and Stuart Weitzman are Tapestry’s fashion and accessory brands. The firm’s products are sold through about 1,400 company-operated stores, wholesale channels, and e-commerce in North America (66% of fiscal 2023 sales), Europe, Asia (29% of fiscal 2023 sales), and elsewhere. Coach (75% of fiscal 2023 sales) is best known for affordable luxury leather products. Kate Spade (21% of fiscal 2023 sales) is known for colorful patterns and graphics. Women’s handbags and accessories produced 69% of Tapestry's sales in fiscal 2023. Stuart Weitzman (4% of sales) generates nearly all its revenue from women’s footwear. In August 2023, Tapestry agreed to acquire rival Capri and its three brands, Michael Kors, Versace, and Jimmy Choo.
Sector
Consumer Cyclical
Industry
Luxury Goods
Stock Style Box
Mid Core
Total Number of Employees
20,600

Competitors

Valuation

Metric
TPR
RMS
MC
Price/Earnings (Normalized)
11.0754.0027.46
Price/Book Value
4.1016.306.83
Price/Sales
1.6618.474.84
Price/Cash Flow
8.7648.3918.15
Price/Earnings
TPR
RMS
MC

Financial Strength

Metric
TPR
RMS
MC
Quick Ratio
5.493.580.58
Current Ratio
6.254.401.32
Interest Coverage
16.1399.3223.09
Quick Ratio
TPR
RMS
MC

Profitability

Metric
TPR
RMS
MC
Return on Assets (Normalized)
11.80%24.29%11.43%
Return on Equity (Normalized)
41.86%33.36%27.46%
Return on Invested Capital (Normalized)
15.41%27.81%16.88%
Return on Assets
TPR
RMS
MC
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Name
Morningstar Rating for Stocks
Capital Allocation
Economic Moat
Market Cap
LVMHF
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HESAY
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CHDRF
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CHDRY
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SWGAY
The Swatch Group AG ADRKjjcdzhVnbbqmp$11.9 Bil
CPRI
Capri Holdings LtdZwdvfjdbSqmr$5.3 Bil
REAL
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