Tapestry Earnings: Coach Shines as Work Continues to Close Capri Deal; Shares Undervalued

Led by Coach, Tapestry’s sales and non-GAAP earnings surpassed our expectations in its (December-ended) fiscal 2024 second quarter. These results support our narrow moat rating on Tapestry, which is based on Coach’s brand value. Tapestry’s shares have rallied strongly over the past three months but remain well below our $60 fair value estimate, which we do not expect to change materially. As we anticipate the Capri acquisition will close in 2024 as planned, our valuation is based on a combined Tapestry and Capri model.