Tapestry Inc (TPR)

Tapestry Inc.: A Comprehensive Overview

Company Profile:

History: Tapestry, Inc. (formerly Coach, Inc.) was founded in 1941 as a family-run workshop in New York City. Initially producing leather wallets and billfolds, Coach expanded its product line to handbags in the 1960s. The company went public in 1985 and experienced significant growth throughout the 1990s and 2000s. In 2013, Coach acquired Stuart Weitzman, a luxury footwear brand, followed by Kate Spade New York in 2017. In 2018, the company changed its name to Tapestry, Inc. to reflect its portfolio of brands.

Core Business: Tapestry, Inc. operates as a global house of modern luxury accessories and lifestyle brands. Its portfolio includes Coach, Stuart Weitzman, and Kate Spade New York. These brands offer a range of products, including handbags, leather goods, footwear, apparel, jewelry, and accessories. The company operates through a network of retail stores, e-commerce platforms, and wholesale partners.

Leadership: Tapestry, Inc. is led by CEO Joanne Crevoiserat, who joined the company in 2022. The leadership team also includes Todd Kahn (Chief Financial Officer), Yannick Bovy (Chief Brand Officer), and Joshua Schulman (President and CEO, Tapestry Asia-Pacific). The Board of Directors is chaired by Susan Kropf and comprises experienced individuals with expertise in various fields.

Top Products and Market Share:

Top Products: Tapestry's top products include Coach handbags, Stuart Weitzman boots and heels, and Kate Spade New York clothing and accessories.

Market Share: Tapestry holds a significant market share in the global luxury accessories market. Coach is estimated to have a 12% market share in the women's handbags segment, while Stuart Weitzman holds a 5% share in the luxury footwear market. Kate Spade New York's market share is estimated to be around 2% in the women's apparel and accessories segment.

Product Performance: Tapestry's products have received positive reviews and recognition from industry experts and consumers. Coach has consistently ranked among the top brands in the luxury handbags category. Stuart Weitzman footwear is known for its quality and craftsmanship, while Kate Spade New York's designs are popular with younger consumers.

Competition: Tapestry competes with other luxury brands such as Michael Kors, Gucci, and Louis Vuitton.

Total Addressable Market:

The global luxury accessories market is estimated to be worth over $300 billion. This market is expected to grow steadily in the coming years, driven by rising disposable income, increasing demand for luxury goods, and growing online sales.

Financial Performance:

In fiscal year 2023 (ended June 2023), Tapestry generated revenue of $6.7 billion and net income of $654 million. The company's gross profit margin was 63.3%, and its operating margin was 14.2%. Tapestry has a strong financial position with a healthy balance sheet and positive cash flow.

Year-over-Year Performance: Tapestry's revenue and net income have grown steadily over the past few years. The company has also improved its profit margins and cash flow generation.

Dividends and Shareholder Returns:

Tapestry has a history of paying dividends to its shareholders. The company's current dividend yield is approximately 3%. Tapestry has also generated strong total shareholder returns over the long term.

Growth Trajectory:

Tapestry's growth trajectory has been positive in recent years. The company is expanding its retail presence, investing in its brands, and exploring new growth opportunities. Analysts expect Tapestry to continue to grow its earnings and shareholder returns in the coming years.

Market Dynamics:

The luxury accessories market is highly competitive and dynamic. Tapestry faces several challenges, including rising competition, changing consumer preferences, and economic uncertainty. However, the company is well-positioned to succeed in this environment due to its strong brand portfolio, global reach, and experienced management team.

Competitors:

• Michael Kors (KORS)
• Gucci (KER)
• Louis Vuitton (LVMH)
• Prada (PRADA)
• Chanel (private)

Key Challenges and Opportunities:

Key Challenges:

• Increasing competition
• Rising costs
• Economic uncertainty
• Changing consumer preferences

Key Opportunities:

• Expansion into new markets
• Product innovation
• Digital transformation
• Strategic partnerships

Recent Acquisitions:

• N/A (Tapestry Inc. has not made any acquisitions in the past 3 years.)

AI-Based Fundamental Rating:

Based on an AI-based analysis of Tapestry's financial fundamentals, market position, and future prospects, the company receives a rating of 7.5 out of 10.

Justification: Tapestry is a well-established company with a strong brand portfolio and a proven track record of success. The company has a healthy balance sheet and is generating strong cash flow. Tapestry also has a number of growth opportunities, including expansion into new markets and product innovation. However, the company faces challenges from rising competition, changing consumer preferences, and economic uncertainty.