Opinions Kash Pashootan
Tapestry Inc.TPRCOMMENTJan 16, 2015
Kash PashootanStock price when the opinion was issued
As of Jun 05, 2026. Market Open.
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Last year, the FTC blocked the Tapestry-Capri merger to include Kate Space, Versace and Jimmy Choo brands among others. Since then, TPR has soared 148%; announced and accelerated a share buyback; delivered top and bottom line beats and raised forecast for three straight quarters. Drivin this is improving sales in the Coach brand which is stealing market brand. Buy on a pullback or a small position now.
Some high-end names like Louis Vuitton have not been doing well. But TPR has been performing decently. Above 200-day MA, which is moving higher. Mid-high luxury, and that part of the market is doing better. Could be that the ultra-rich are "downshifting" into names owned by this brand.
15.5x forward PE, slightly above 10-year historical norms for this name. 9-10% growth. So valuation is decent. Investors should be cautious about impact of a downturn in the economy on this type of name.
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Premium contentPremium contentStockchase Research Editor: Michael O'Reilly TPR is an international manufacturer of luxury items that include the Coach and Kate Spade brands. They have built cash reserves back above $2 billion during the pandemic, while paying down debt. They trade at 16x earnings, compared to peers like RL at 49x. They have re-instated the dividend at a good yield, while keeping the payout ratio under 50% of cash flow. We would buy this with a stop loss at $30, looking to achieve $53.50 -- upside potential over 29%. Yield 2.45%. (Analysts’ price target is $53.13)
Got an analyst upgrade today and the stock surged and lifted the entire retail clothing sector. He prefers tried-and-true Lululemon though.
Bruce MurrayBruce MurrayBruce Murray
This is having a real hard time. They have fallen out of the consumer’s eye of being the luxury brand that they once were. Once you lose that momentum, it is very difficult to regain it. Sales are down 21% year-over-year in North America. Recently did an acquisition of Stuart Weitzman, a luxury shoemaker, and spent $550 million. Not quite sure how this acquisition is going to help them sell more Coach purses. The good news is that sales in China have been picking up, but not nearly enough to offset what they’ve lost in the US. Given the slowdown in sales in the US, they have had to cut prices to move inventory, and by cutting prices, margins have also shrunk.