Tapestry, Inc. (TPR): history, ownership, mission, how it works & makes money

A Brief History of Tapestry, Inc.

Tapestry, Inc., a leading American luxury fashion company, has evolved significantly since its inception. As of 2024, Tapestry operates three iconic brands: Coach, Kate Spade, and Stuart Weitzman. The company focuses on delivering high-quality products and maintaining strong brand identities across various markets.

Company Overview

Founded in 1941, Tapestry initially started as a leather goods company. The brand transformed significantly over the decades, diversifying its offerings and expanding its global presence. In 2017, Tapestry acquired Kate Spade for approximately $2.4 billion, further enhancing its portfolio. In 2021, Tapestry acquired Stuart Weitzman, which solidified its position in the luxury footwear market.

Financial Performance

As of the first quarter of fiscal 2025, Tapestry reported net sales of $1.51 billion, a slight decrease of 0.4% compared to $1.51 billion in the first quarter of fiscal 2024. The breakdown of net sales by brand is as follows:

The gross profit for Tapestry in Q1 FY2025 was $1.13 billion, a 3.4% increase from $1.10 billion in the same period of the previous year. The gross margin improved to 75.3% from 72.5% year-over-year, attributed to net pricing improvements and lower freight costs.

Operating Expenses

In the first quarter of fiscal 2025, Tapestry's Selling, General and Administrative (SG&A) expenses increased by 4.5% to $882.9 million, up from $844.5 million in the prior year. This increase was primarily due to higher marketing expenses and increased compensation costs.

Net Income

Net income for Tapestry in the first quarter of fiscal 2025 was $186.6 million, a decrease of 4.3% from $195.0 million in the first quarter of fiscal 2024. The net income per diluted share fell to $0.79 compared to $0.84 in the prior year. Excluding items affecting comparability, net income increased to $241.6 million from $216.3 million, reflecting improved operational efficiency.

Debt and Liquidity

As of September 28, 2024, Tapestry reported total long-term debt of $7.01 billion, up from $6.94 billion at the end of the previous fiscal year. The company has a robust liquidity position, with cash and cash equivalents amounting to $6.46 billion, an increase of $320.9 million from June 29, 2024.

Market Position and Strategy

Tapestry continues to focus on enhancing its brand portfolio while expanding its direct-to-consumer (DTC) channels. The company is investing in digital initiatives to boost e-commerce sales, which have been a significant growth driver. In fiscal 2025, Tapestry aims to leverage its global footprint to capture emerging market opportunities while maintaining its luxury brand positioning.

A Who Owns Tapestry, Inc. (TPR)

Ownership Structure

Tapestry, Inc. (TPR) has a diverse ownership structure consisting of institutional investors, individual shareholders, and company insiders. As of 2024, the breakdown of ownership is as follows:

Major Institutional Shareholders

Key institutional shareholders include:

Insider Ownership

Insider ownership remains a significant aspect of Tapestry's governance:

Recent Share Issuance and Stock Performance

As of September 28, 2024, Tapestry reported a total of 233 million shares outstanding. The stock price has seen fluctuations, with a recent price of $26.50 per share as of October 2024, reflecting a market capitalization of approximately $6.18 billion.

Acquisition of Capri Holdings

In November 2023, Tapestry announced the acquisition of Capri Holdings Limited, which is expected to significantly alter its ownership structure and market position:

This merger is positioned to enhance Tapestry's brand portfolio and expand its global reach, potentially impacting shareholder dynamics moving forward.

Shareholder Meetings and Voting Rights

Shareholder meetings are typically held annually, where major decisions, including board elections and executive compensation, are voted on by shareholders based on their share ownership. Each share of common stock entitles the holder to one vote.

Tapestry, Inc. (TPR) Mission Statement

Tapestry, Inc. is committed to delivering distinctive and innovative products through its iconic brands, Coach, Kate Spade, and Stuart Weitzman. The company aims to create a sustainable fashion industry that empowers communities and fosters diversity and inclusion.

Financial Overview

As of the first quarter of fiscal 2025, Tapestry reported net sales of $1.51 billion, a decrease of 0.4% compared to $1.51 billion in the first quarter of fiscal 2024. The breakdown of net sales by brand is as follows:

Gross Profit and Margin

In the first quarter of fiscal 2025, Tapestry's gross profit was $1.13 billion, reflecting a 3.4% increase from $1.10 billion in the first quarter of fiscal 2024. The gross margin improved to 75.3% compared to 72.5% for the same period last year.

Operating Income

Operating income for Tapestry was $252.0 million, slightly down from $253.2 million in the previous year. The operating margin remained stable at 16.7% for both periods.

Expenses Overview

SG&A expenses rose to $882.9 million, a 4.5% increase from $844.5 million in the prior year. This increase was primarily driven by higher marketing expenditures and increased compensation costs, resulting in SG&A as a percentage of net sales rising to 58.6% from 55.8%.

Cash Flow and Investments

For the three months ended September 28, 2024, Tapestry generated net cash from operating activities of $119.5 million, compared to $75.3 million in the same period of the prior year. The company's cash and cash equivalents at the end of the quarter were $6.46 billion.

Debt Overview

Tapestry's total long-term debt as of September 28, 2024, amounted to $7.01 billion, reflecting various senior notes with varying maturity dates and interest rates.

How Tapestry, Inc. (TPR) Works

Company Overview

Tapestry, Inc. operates as a leading designer and marketer of luxury accessories and lifestyle brands. Its portfolio includes Coach, Kate Spade, and Stuart Weitzman, each contributing to its diverse revenue streams.

Financial Performance

For the first quarter of fiscal 2025, Tapestry reported net sales of $1.51 billion, a decrease of 0.4% compared to $1.51 billion in the same quarter of fiscal 2024.

Segment Performance

The company's three primary brands are segmented as follows:

Cost Structure

Tapestry's selling, general, and administrative (SG&A) expenses increased to $882.9 million in Q1 2025 from $844.5 million in Q1 2024.

Balance Sheet Overview

As of September 28, 2024, Tapestry's total assets were valued at $13.73 billion, with total liabilities of $10.75 billion, resulting in total stockholders' equity of $2.98 billion.

Market Analysis

Tapestry operates in various geographic markets, with North America being the largest revenue contributor. For Q1 2025, the breakdown of net sales by region is as follows:

Recent Developments

On August 10, 2023, Tapestry entered into a merger agreement with Capri Holdings Limited, which is expected to enhance its market position and operational capabilities.

Conclusion

The financial metrics and segment performance indicate Tapestry's ongoing adaptability in a competitive luxury market. The company continues to focus on enhancing profitability through strategic initiatives and operational efficiencies.

How Tapestry, Inc. (TPR) Makes Money

Business Model Overview

Tapestry, Inc. operates primarily through three key brands: Coach, Kate Spade, and Stuart Weitzman. The company generates revenue through direct-to-consumer (DTC) sales, wholesale distribution, and licensing agreements.

Revenue Streams

Tapestry's revenue is derived from the following segments:

• Direct-to-Consumer Sales
• Wholesale Distribution
• Licensing Agreements

Financial Performance

For the first quarter of fiscal 2025, Tapestry reported the following financial figures:

Segment Performance

Performance by brand for Q1 2025 is as follows:

Cost Structure

Tapestry's cost of sales for Q1 2025 was $372.6 million, resulting in a gross margin of 75.3%, a 280 basis point increase compared to the previous year. Selling, general, and administrative (SG&A) expenses amounted to $882.9 million, representing 58.6% of net sales, an increase from 55.8% in Q1 2024.

Direct-to-Consumer Sales

In Q1 2025, DTC sales increased significantly, contributing to the overall revenue growth. Notably:

• Coach DTC sales rose by $32.9 million, driven mainly by e-commerce growth.
• Kate Spade saw a decline in DTC sales by $24.4 million due to lower foot traffic in stores.
• Stuart Weitzman experienced a slight increase in DTC sales, contributing positively to its overall performance.

Wholesale Distribution

Wholesale sales showed mixed results:

• Coach experienced a decrease of $11.7 million in wholesale sales in North America.
• Kate Spade's wholesale sales increased by $4.9 million.
• Stuart Weitzman reported stable performance, reflecting a slight increase in sales.

Licensing Revenue

Licensing revenue constituted approximately 1% of total net sales, recognized over time during the contract period. This included sales-based royalties and guaranteed minimum royalties.

International Sales

Geographic breakdown of net sales for Q1 2025 is as follows:

Conclusion

Tapestry, Inc. continues to leverage its strong brand portfolio and diversified revenue streams to drive profitability and growth in the competitive luxury goods market.

Updated on 16 Nov 2024

Resources:

1. Tapestry, Inc. (TPR) Financial Statements – Access the full quarterly financial statements for Q1 2025 to get an in-depth view of Tapestry, Inc. (TPR)' financial performance, including balance sheets, income statements, and cash flow statements.
2. SEC Filings – View Tapestry, Inc. (TPR)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.