Executive Summary
Tapestry Inc reported Q4 FY2024 (quarter ended June 29, 2024) revenue of $1.591 billion, down 23.7% year-over-year, with a robust gross margin of approximately 74.9% and an operating margin of about 14.8%. Net income totaled $159.3 million, translating to $0.69 per diluted share. The quarter delivered solid cash generation: operating cash flow of $256.0 million and free cash flow of $209.8 million, supporting a liquidity position of approximately $6.14 billion in cash and equivalents and a net debt position of roughly $2.62 billion. The company continued to deploy capital toward investments and returns, including $0.7 million in share repurchases and $80.5 million in dividends, while investing $46.2 million in capex and absorbing $1.59 billion in investment activity related to holdings. The result underscores Tapestry’s ability to sustain high gross margins and disciplined expense management even as top-line growth slowed, reflecting ongoing mix shift toward higher-margin direct-to-consumer channels and brand strength across Coach, Kate Spade and Stuart Weitzman. Looking ahead, the company did not publish formal forward guidance in the supplied data, but margins remain a relative strength while revenue headwinds persist in a discretionary consumer environment. Investors should monitor: (i) demand trajectory in key regions and channels, (ii) progress on inventory optimization and price realization, (iii) balance sheet leverage given the sizable long-term debt, and (iv) capital allocation including potential returns and selective investments as macro conditions evolve.
Key Performance Indicators
QoQ: 15.03% | YoY:-48.52%
QoQ: 14.28% | YoY:-50.57%
QoQ: 13.11% | YoY:-51.06%
Key Insights
Revenue: $1.591B in Q4-2024, YoY decline of 23.67% and QoQ increase of 7.33%. Gross Profit: $1.191B, YoY -20.70%, QoQ +7.57%. Gross Margin: ~74.87% (gross profit / revenue). Operating Income: $235.0M, YoY -48.52%, QoQ +15.03%. Operating Margin: ~14.77% (Operating income / revenue). Net Income: $159.3M, YoY -50.57%, QoQ +14.28%. Net Margin: ~10.01%. EPS (diluted): $0.68-$0.69 range, YoY -51.06%, QoQ +13.11%. Cash from operations: $256.0M. Free Cash Flow: $209.8M. Capex: $46.2M. Free Cash Flow to ...
Financial Highlights
Revenue: $1.591B in Q4-2024, YoY decline of 23.67% and QoQ increase of 7.33%. Gross Profit: $1.191B, YoY -20.70%, QoQ +7.57%. Gross Margin: ~74.87% (gross profit / revenue). Operating Income: $235.0M, YoY -48.52%, QoQ +15.03%. Operating Margin: ~14.77% (Operating income / revenue). Net Income: $159.3M, YoY -50.57%, QoQ +14.28%. Net Margin: ~10.01%. EPS (diluted): $0.68-$0.69 range, YoY -51.06%, QoQ +13.11%. Cash from operations: $256.0M. Free Cash Flow: $209.8M. Capex: $46.2M. Free Cash Flow to Equity/Shareholder metrics are supported by a strong cash balance of $6.14B and total cash plus short-term investments of $7.20B. Total debt: $8.77B; Net debt: $2.62B. Debt/EBITDA considerations are elevated given the long-term debt load, though interest coverage stands at ~7.7x. Dividend: $80.5M; Share repurchases: ~$0.7M. Liquidity indicators remain robust with current and quick ratios well above 1.0 and a cash-rich balance sheet that supports ongoing returns and potential deleveraging if warranted by future cash flows.
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
1.59B |
-23.67% |
7.33% |
| Gross Profit |
1.19B |
-20.70% |
7.57% |
| Operating Income |
235.00M |
-48.52% |
15.03% |
| Net Income |
159.30M |
-50.57% |
14.28% |
| EPS |
0.69 |
-51.06% |
13.11% |
Key Financial Ratios
operatingProfitMargin
14.8%
operatingCashFlowPerShare
$1.11
freeCashFlowPerShare
$0.91
dividendPayoutRatio
50.5%
Management Commentary
Note: The provided data set contains no earnings transcript. Consequently, there are no management quotes or themes to quote directly. Below is a concise qualitative framing based on the reported results and typical strategic levers for Tapestry. - Strategic emphasis is likely on sustaining gross margins and profitability through brand strength, product mix optimization, and direct-to-consumer enhancement, supported by a meaningful cash buffer. - Operational focus likely centers on inventory optimization, price realization, and selective investment in flagship stores and e-commerce to drive DTC mix, given the margin resilience evident in Q4 results. - Market conditions framework would typically reference ongoing discretionary consumer headwinds, with regional variances that historically favor North America and online channels for Tapestry. - Financial discipline remains evident in capital allocation (dividends and modest buybacks) while financing activities reflect a debt load that the company manages through solid cash flow generation.
Forward Guidance
No explicit forward-looking guidance was disclosed in the provided data set. Based on the quarter’s profitability resilience, strong cash flow, and a sizable liquidity position, the directional outlook suggests potential margin stability or modest expansion through mix optimization and price realization if demand stabilizes. Key factors to monitor include: 1) consumer demand trends in core markets and the pace of DTC growth versus wholesale; 2) inventory levels and discounting pressure; 3) progress on cost containment, SG&A efficiency, and potential investments in high-return areas (e-commerce, Asia expansion, and footwear segments); 4) debt trajectory and potential deleveraging opportunities given free cash flow and capital returns; and 5) any changes to the cadence of share repurchases or dividends in response to evolving liquidity conditions.