Description

Tapestry Revives Kate Spade With a High-Impact Turnaround & Gen Z Targeting; But Is It Enough?

Tapestry delivered a strong first quarter performance characterized by broad-based revenue growth, margin expansion and increased customer acquisition, while also acknowledging areas of continued investment and pressure across the portfolio. Pro forma revenue increased 16%, led by 21% growth at Coach, with North America, Europe and Greater China each contributing double-digit gains. Direct-to-consumer revenue rose at a mid-teens rate in both digital and brick-and-mortar channels, supported by improved consumer engagement and higher average unit retail. Gross margin expanded by 120 basis points to 76.5%, driven by operational efficiencies and the divestiture of Stuart Weitzman, partially offset by higher tariffs, duties and currency headwinds. SG&A grew 11% as the company increased marketing investment to 11% of revenue, but expense leverage contributed to 200 basis points of operating margin expansion. Adjusted EPS rose 35% to USD 1.38. Inventory levels remained well managed, trending modestly below the prior year on a reported basis.

Our Report Structure:

⦁ Company Overview
⦁ Investment Thesis
⦁ Key Drivers
⦁ Historical Quarterly Statement Analysis – Income Statement & Cash Flows
⦁ Historical Quarterly Balance Sheet Analysis
⦁ Historical Annual Financial Statement Analysis
⦁ Analysis Of Key Financial Ratios
⦁ Financial Forecasts For 3 Years
⦁ Forecasting The Capital Structure & Net Debt
⦁ Discounted Cash Flow Valuation
⦁ Trading Multiples
⦁ Key Risks
⦁ Disclosures

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