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Tapestry (NYSE: TPR) reported a 27% year-to-date stock increase as of June 29, 2024, significantly outperforming the S&P 500’s 2% and Ralph Lauren’s 15% gains. The boost is attributed to strong Q3 earnings and an upward revision in FY2025 guidance, with improved gross margins and traction among younger consumers.
Tapestry’s revenue rose 2.7% to $6.9 billion last year, and Q3 2025 saw an 8% year-over-year increase. Despite a stable financial foundation with a manageable $4.1 billion debt, the company’s historical performance during downturns raises concerns—showing a 46% drop during the 2022 inflation shock and a 64% decline during the 2020 COVID crash.
The company’s valuation metrics—price-to-sales at 2.4, price-to-free cash flow at 18.2, and price-to-earnings at 21.7—are below S&P 500 averages, but these figures reflect slow growth and average profitability. Overall, the stock is viewed as risky due to its lack of resilience in market downturns.
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