TPRTPR
US • —
$146.38
P/E
46.87
PEG
—
FCF Yield
—
Rev Growth YoY
+14.1% YoY
Gross Margin
76.2%
Health Score
5/10
D/E Ratio
2.79
Confidence
MEDIUM
Business Snapshot
Tapestry (TPR) is a luxury fashion house that designs and markets handbags, accessories, and footwear under brands including Coach, Kate Spade, and Stuart Weitzman. The company operates in the global luxury accessories market, competing with players like Michael Kors (Capri Holdings) and Ralph Lauren, holding a strong position in the accessible luxury segment. Tapestry's consistent track record of earnings beats demonstrates management's ability to meet or exceed expectations, signaling operational discipline. The company generates high gross margins typical of the luxury sector, but carries a debt/equity ratio of 2.79x, indicating significant leverage on the balance sheet.
Financial Health
Gross margin stands at 76.2%, reflecting the premium pricing power typical of luxury brands, while net margin of 8.4% leaves room for improvement relative to the gross margin level. The debt/equity ratio of 2.79x classifies the balance sheet as stretched, suggesting the company relies heavily on debt financing to support operations and growth...
Risk Assessment
- VALUATION — P/E of 46.87x is more than double the sector average of 22x, suggesting elevated expectations.
- DEBT / LIQUIDITY — Debt/equity of 2.79x reflects a highly leveraged capital structure that amplifies financial risk.
- EARNINGS QUALITY — Earnings declined 17.8% year-over-year despite 14.1% revenue growth, indicating margin deterioration.
- TECHNICALS — RSI, MACD, and moving average data are unavailable for this period; momentum cannot be independently confirmed.
- INSIDER ACTIVITY — Insiders have net sold over the last 90 days with 0 buys versus 1 sell, a cautious signal....
Gross margin stands at 76.2%, reflecting the premium pricing power typical of luxury brands, while net margin of 8.4% leaves room for improvement relative to the gross margin level. The debt/equity ratio of 2.79x classifies the balance sheet as stretched, suggesting the company relies heavily on debt financing to support operations and growth. A current ratio of 1.87x provides adequate short-term liquidity coverage, offering some buffer against near-term obligations. Return on equity is exceptionally high at 106.4%, which is partly inflated by the high leverage. Overall, Tapestry shows strong underlying brand profitability but carries elevated financial risk from its debt load, which could pressure dividend capacity and reinvestment flexibility.
- VALUATION — P/E of 46.87x is more than double the sector average of 22x, suggesting elevated expectations. - DEBT / LIQUIDITY — Debt/equity of 2.79x reflects a highly leveraged capital structure that amplifies financial risk. - EARNINGS QUALITY — Earnings declined 17.8% year-over-year despite 14.1% revenue growth, indicating margin deterioration. - TECHNICALS — RSI, MACD, and moving average data are unavailable for this period; momentum cannot be independently confirmed. - INSIDER ACTIVITY — Insiders have net sold over the last 90 days with 0 buys versus 1 sell, a cautious signal.
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