TAPESTRY, INC.

Coach/Kate Spade owner with high gross margin and strong FCF; net income one-off-hit and leverage elevated.

Strengths

• High gross margin and FCF — gross margin 75.4% (79th), FCF $1.09B (85th), FCF margin 15.6%
• Strong returns — ROE 21.4% (75th)
• Steady growth — revenue +5.1%

Risks

• Elevated leverage — D/E 2.79 (94th)
• Net income one-off-hit — -77.5% (25th), likely the terminated Capri deal
• Accessible-luxury demand sensitivity — per 10-K

Notable findings

• Exec changeRecent 8-K item 5.02 8-K ↗
• High leverageHigh leverage (debt/equity 2.79)
• Customer concentration~40% of revenue from one customer/distributor — We operate on a global basis, with approximately 40
• Fund exitedNotable fund(s) exited this quarter: VANGUARD GROUP INC
• Buying back stockNet buyback — share count -5%/yr over 4y
• Insider sellingInsider selling — 20 open-market sale(s) by 7 insider(s) (cluster of 7 insiders, ~$32M, last 6mo) Form 4 ↗
• Notable holderHeld by 6 notable fund(s): STATE STREET CORP, FMR LLC, GOLDMAN SACHS GROUP INC +3 more (as of 2026-03-31)
• Revenue declineRevenue -23.2% YoY
• Pending mergerCapri Holdings Limited Acquisition On August 10, 2023, the Company entered into the Merger Agreement by and among the Company, Sunrise Merger Sub, Inc