Tapestry Inc

Tapestry, Inc. (NYSE: TPR) is a house of accessories and lifestyle brands. The Company's global house of brands includes Coach and kate spade new york. Coach brand is a global fashion house of accessories and lifestyle collections. Kate Spade New York is a global lifestyle brand that designs things for the everyday, delivering seasonal collections of handbags, ready-to-wear, jewelry, footwear, gifts, home decor and more. 

Key Business and Financial Updates:

• Financial Performance Highlights: Tapestry, Inc. achieved record fourth-quarter revenue of USD 1.7 billion in fiscal 2025, marking an 8% increase compared to the prior year, primarily driven by a 14% growth (13% on a constant currency basis) at the Coach brand. For the full fiscal year, the company reported record annual revenue of USD 7.0 billion, reflecting a 5% rise from the previous year, fueled by 10% growth at Coach. Gross margin expanded by 210 basis points annually, supported by operational efficiencies. Additionally, Tapestry returned USD 2.3 billion to shareholders through dividends and share repurchases, bolstered by a strong balance sheet and robust cash flow. The Board of Directors approved a 14% dividend increase, and the company initiated its fiscal 2026 outlook, projecting continued growth in revenue, operating margin, and earnings, inclusive of tariff and trade policy impacts.
• Strategic Achievements: In fiscal 2025, Tapestry advanced its strategic priorities, focusing on building lasting customer relationships, powering global growth, delivering compelling omni-channel experiences, and fueling fashion innovation and product excellence. The company acquired approximately 1.5 million new customers in North America during the fourth quarter and over 6.8 million for the year, with Gen Z and Millennials comprising about 60% of these additions. Revenue growth was evident across regions, including constant currency gains in North America (8% in Q4 and 5% annually), Europe (10% in Q4 and 28% annually), and Asia-Pacific (6% in Q4 and 2% annually). Direct-to-consumer revenue increased by 6% in the quarter and 5% for the year on a constant currency basis, with digital sales growing in the mid-teens and low-double-digits, respectively. Handbag revenue at Coach saw mid-teens average unit retail (AUR) gains in the quarter and low-double-digit gains annually, contributing to gross margin expansion of 140 basis points in Q4 and 210 basis points for the year.
• Revenue Breakdown: Tapestry's fiscal 2025 revenue demonstrated strong performance across brands and regions. Coach generated USD 1.43 billion in Q4 (up 14% reported, 13% constant currency) and USD 5.60 billion annually (up 10% both reported and constant currency). Kate Spade reported USD 253 million in Q4 (down 13% both reported and constant currency) and USD 1.20 billion annually (down 10% both). Stuart Weitzman recorded USD 46 million in Q4 (down 10% both) and USD 215 million annually (down 11% both). Regionally, North America contributed USD 1.10 billion in Q4 (up 8%) and USD 4.52 billion annually (up 5%). Greater China saw USD 274 million in Q4 (up 18%) and USD 1.06 billion annually (up 5%). Japan generated USD 118 million in Q4 (down 7% reported, 11% constant currency) and USD 515 million annually (down 7% reported, 5% constant currency). Other Asia contributed USD 86 million in Q4 (flat reported, down 1% constant currency) and USD 380 million annually (up 9% reported, 8% constant currency). Europe achieved USD 104 million in Q4 (up 13% reported, 10% constant currency) and USD 421 million annually (up 29% reported, 28% constant currency).
• Shareholder Returns and Financial Position: In fiscal 2025, Tapestry returned USD 2.3 billion to shareholders, including USD 300 million in dividends at an annual rate of USD 1.40 per share and a USD 2 billion accelerated share repurchase (ASR) program, which initially delivered 28.4 million shares at an estimated average price of USD 78 per share, with final settlement expected in the first quarter of fiscal 2026. For fiscal 2026, the Board approved a quarterly dividend of USD 0.40 per share (a 14% increase, implying an annual rate of USD 1.60), payable on September 22, 2025. The company anticipates repurchasing an additional USD 800 million in common stock. On the balance sheet, cash and equivalents totaled USD 1.12 billion, with net debt at USD 1.27 billion and a leverage ratio of 1.4x. Inventory stood at USD 861 million (excluding USD 92 million for Stuart Weitzman assets held for sale). Operating cash flow was USD 1.22 billion, with adjusted free cash flow at USD 1.35 billion. Capital expenditures and cloud computing costs amounted to USD 153 million.
• Fiscal 2026 Outlook and Non-GAAP Adjustments: Tapestry's fiscal 2026 outlook projects revenue approaching USD 7.2 billion (low-single-digit growth reported; mid-single-digit pro-forma excluding Stuart Weitzman), with foreign currency providing an 80-basis-point tailwind. Operating margin is expected to exceed the prior year, incorporating over 250 basis points of underlying expansion offset by a 230-basis-point tariff and duty headwind (approximately USD 160 million impact). Net interest expense is forecasted at USD 65 million, with a tax rate of 18% and weighted average diluted shares of 213 million, yielding earnings per diluted share of USD 5.30 to USD 5.45 (4% to 7% growth, including a USD 0.60 tariff impact). Adjusted free cash flow is anticipated to approach USD 1.3 billion. For fiscal 2025, non-GAAP adjustments included USD 872 million in pre-tax charges in Q4 (primarily USD 855 million in Kate Spade impairments due to tariff impacts and other costs), reducing net income by USD 740 million and EPS by USD 3.53. Annually, charges totaled USD 1.16 billion pre-tax, lowering net income by USD 951 million and EPS by USD 4.28.

Technical Observation (on the daily chart):

The Relative Strength Index (RSI) over a 14-day period stands at a value of 45.93, nearing oversold zone, with expectations of a consolidation or an upward momentum if the price sustains above the important support levels of USD 90.00-USD 100.00. Additionally, the stock's current positioning is above both the 50-period SMA and 200-period SMA, which may serve as dynamic short to medium-term support levels.

As per the above-mentioned price action, important support near USD 90.00-USD 100.00, momentum in the stock over the last month, and technical indicators analysis, a ‘WATCH’ rating has been given for Tapestry, Inc. (NYSE: TPR) at the closing price of USD 100.74, as of August 15, 2025. 

Individuals can evaluate the stock based on the support and resistance levels provided in the report in case of keen interest taking into consideration the risk-reward scenario. 

Markets are trading in a highly volatile zone currently due to certain macro-economic issues and prevailing geopolitical tensions. Therefore, it is prudent to follow a cautious approach while investing.

Related Risk: This report may be looked at from a high-risk perspective and a recommendation is provided for a short duration. This report is solely based on technical parameters, and the fundamental performance of the stocks has not been considered in the decision-making process. Other factors which could impact the stock prices include market risks, regulatory risks, interest rates risks, currency risks, social and political instability risks etc. 

Note 1: Past performance is not a reliable indicator of future performance.

Note 2: The reference date for all price data, currency, technical indicators, support, and resistance level is August 15, 2025. The reference data in this report has been partly sourced from REFINITIV.

Note 3: Investment decisions should be made depending on an individual's appetite for upside potential, risks, holding duration, and any previous holdings. An 'Exit' from the stock can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided has been achieved and is subject to the factors discussed above.

Note 4: Target Price refers to a price level that the stock is expected to reach as per the relative valuation method and or technical analysis taking into consideration both short-term and long-term scenarios.

Note 5: ‘Kalkine reports are prepared based on the stock prices captured either from the New York Stock Exchange (NYSE), NASDAQ Capital Markets (NASDAQ), and or REFINITIV. Typically, all sources (NYSE, NASDAQ, or REFINITIV) may reflect stock prices with a delay which could be a lag of 15-20 minutes. There can be no assurance that future results or events will be consistent with the information provided in the report. The information is subject to change without any prior notice.