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Tapestry Inc TPR

Morningstar Rating
$47.22 −0.31 (0.65%)
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Company Report

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.

Price vs Fair Value

TPR is trading at a 21% discount.
Price
$47.22
Fair Value
$28.00
Uncertainty
High
1-Star Price
$93.00
5-Star Price
$33.00
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
$47.53
Day Range
$47.2048.06
52-Week Range
$25.9948.80
Bid/Ask
$45.27 / $48.05
Market Cap
$10.83 Bil
Volume/Avg
3.0 Mil / 3.9 Mil

Key Statistics

Price/Earnings (Normalized)
11.01
Price/Sales
1.65
Dividend Yield (Trailing)
2.75%
Dividend Yield (Forward)
2.96%
Total Yield
6.48%

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
RL
MC
Price/Earnings (Normalized)
11.0119.4527.87
Price/Book Value
4.074.606.93
Price/Sales
1.651.884.92
Price/Cash Flow
8.7113.7718.43
Price/Earnings
TPR
RL
MC

Financial Strength

Metric
TPR
RL
MC
Quick Ratio
5.491.460.58
Current Ratio
6.252.171.32
Interest Coverage
16.1318.2323.09
Quick Ratio
TPR
RL
MC

Profitability

Metric
TPR
RL
MC
Return on Assets (Normalized)
11.80%9.42%11.43%
Return on Equity (Normalized)
41.86%26.42%27.46%
Return on Invested Capital (Normalized)
15.41%11.88%16.81%
Return on Assets
TPR
RL
MC
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Luxury Goods Industry Comparables

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Name
Morningstar Rating for Stocks
Economic Moat
Market Cap
LVMHF
Lvmh Moet Hennessy Louis Vuitton SEDqdb$456.8 Bil
LVMUY
Lvmh Moet Hennessy Louis Vuitton SE ADRYtdm$456.8 Bil
HESAF
Hermes International SAQty$261.2 Bil
HESAY
Hermes International SA ADRHss$261.2 Bil
CHDRF
Christian Dior SEPdmz$156.9 Bil
CHDRY
Christian Dior SE ADRWly$156.9 Bil
SWGAY
The Swatch Group AG ADRRvhkh$12.2 Bil
CPRI
Capri Holdings LtdKrbrf$5.3 Bil
REAL
The RealReal IncDhjhb$288.9 Mil

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