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Tapestry Inc TPR

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Narrow-Moat Tapestry Closed Fiscal 2021 on a Good Note; Outlook Is Reasonable; Shares Attractive

David Swartz Equity Analyst

Analyst Note

| David Swartz |

Tapestry recorded (June-ended) fiscal 2021 fourth-quarter results that surpassed our expectations. Handbags and some types of apparel have been selling well as economies in the U.S. and greater China have recovered. We think Tapestry has good momentum as it enters fiscal 2022, so we expect to lift our per share fair value estimate of $43.50 by a mid-single-digit percentage. Tapestry is one of the few firms in the apparel and accessories space that we currently view as undervalued, especially after its share price slid 3% after the earnings report.

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Company Profile

Business Description

Coach, Kate Spade, and Stuart Weitzman are the fashion and accessory brands that comprise Tapestry. The firm’s products are sold through about 1,500 company-operated stores, wholesale channels, and e-commerce in North America (62% of fiscal 2020 sales), Europe, Asia (32% of fiscal 2020 sales), and elsewhere. Coach (71% of fiscal 2020 sales) is best known for affordable luxury leather products. Kate Spade (23% of fiscal 2020 sales) is known for colorful patterns and graphics. Women’s handbags and accessories produced 68% of Tapestry's sales in fiscal 2020. Stuart Weitzman, Tapestry's smallest brand, generates nearly all (98%) of its revenue from women’s footwear.

Contact
10 Hudson Yards
New York, NY, 10001
T +1 212 946-8400
Sector Consumer Cyclical
Industry Luxury Goods
Most Recent Earnings Jun 30, 2021
Fiscal Year End Jul 2, 2022
Stock Type Cyclical
Employees 16,400

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