How Tapestry is Successfully Managing its Debt Responsibly
January 13, 2023
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Tapestry ($NYSE:TPR) is a global fashion house with a portfolio of luxury lifestyle brands, including Coach, Kate Spade, and Stuart Weitzman. Tapestry has been successful in managing its debt responsibly, which can be attributed to a number of factors. This ratio indicates that Tapestry is not overly reliant on debt financing and has a healthy proportion of equity in its capital structure. Furthermore, Tapestry has a consistently strong interest coverage ratio which indicates that it has sufficient profits to cover its interest payments. This is further supported by Tapestry’s prudent financial policies which ensure that it does not take on more debt than is necessary for the business needs. Another factor that has enabled Tapestry to manage its debt responsibly is its commitment to reducing costs. Over the past few years, Tapestry has implemented cost reduction programs which have helped it to reduce its operating expenses. This has enabled it to make cost savings which can then be used to pay down its existing debt.
Furthermore, Tapestry has also sought to refinance its existing debt at lower rates in order to reduce its interest payments. Finally, Tapestry has also been proactive in managing its long-term debt by taking steps to reduce its total debt levels. Over the past few years, Tapestry has made strategic divestments and used the proceeds to pay down its long-term debt. This has enabled Tapestry to reduce its total debt levels and make it easier for them to manage their debt in the future. Overall, Tapestry has been successful in managing its debt responsibly due to its prudent financial policies, cost reduction efforts, and long-term debt management strategies. These measures have enabled Tapestry to maintain a healthy balance sheet and ensure that it does not become overly reliant on debt financing.
Market Price
The company has been able to do this by ensuring that its debt levels remain within its capacity to pay and that its debt obligations are met in a timely manner. On Thursday, Tapestry‘s stock opened at $42.4 and closed at $43.1, up by 1.8% from the previous day’s closing price of $42.4. This is a sign of investor confidence in the company’s ability to manage its debt responsibly. Tapestry has also been working hard to reduce its debt burden by restructuring its existing debt and refinancing it to more favorable terms. This has enabled the company to take advantage of lower interest rates and better repayment schedules which have helped to reduce their overall debt burden and improve their creditworthiness. Tapestry has also been able to reduce their debt levels by selling non-core assets, such as real estate holdings, which have resulted in a significant reduction in their overall debt load.
In addition, Tapestry has been able to maintain a healthy cash flow by controlling their expenses and managing their working capital efficiently. This has enabled the company to pay off their debt in a timely manner and ensure that they remain in good standing with their creditors. Tapestry has also taken steps to improve their financial position by increasing their revenues through strategic investments and expanding their operations into new markets. Overall, Tapestry has been successful in managing its debt responsibly, despite the current negative media sentiment. With continued efforts to reduce their debt burden, Tapestry will be well positioned to continue to grow and prosper in the future. Live Quote…
About the Company
Income Snapshot
Below shows the total revenue, net income and net margin for Tapestry. More…
| Total Revenues | Net Income | Net Margin |
| 6.71k | 824.7 | 13.5% |
Cash Flow Snapshot
Below shows the cash from operations, investing and financing for Tapestry. More…
| Operations | Investing | Financing |
| 661 | 321.6 | -1.66k |
Balance Sheet Snapshot
Below shows the total assets, liabilities and book value per share for Tapestry. More…
| Total Assets | Total Liabilities | Book Value Per Share |
| 7.08k | 4.82k | 9.32 |
Key Ratios Snapshot
Some of the financial key ratios for Tapestry are shown below. More…
| 3Y Rev Growth | 3Y Operating Profit Growth | Operating Margin |
| 3.8% | 17.3% | 16.5% |
| FCF Margin | ROE | ROA |
| 8.5% | 29.1% | 9.3% |
VI Analysis
Tapestry, Inc. is a company that has seen its share of financial ups and downs. It’s important for investors to take a close look at the company’s fundamentals before investing in it. Fortunately, the VI app helps make this process simpler by providing a VI Risk Rating for Tapestry. The rating reflects Tapestry’s long-term potential and gives investors a better understanding of the risks associated with their investments. As it stands, Tapestry has been given a high risk rating by the VI app. This means that investors should be aware of potential risks, including those related to the company’s income sheet, balance sheet, and non-financial metrics. It’s important to take into consideration all of these risk factors before investing in Tapestry. The VI app has also detected three risk warnings related to Tapestry’s financials. These warnings can provide investors with valuable insight into the company’s long-term potential. By registering with the app, investors can learn more about these warnings and make informed decisions about their investments. Ultimately, Tapestry is a high risk investment due to its financial and business aspects. It’s important for investors to pay close attention to the company’s fundamentals before investing in it, and the VI app provides a helpful tool to make this process easier. By taking advantage of the app’s features and research capabilities, investors can make an informed decision about their investments in Tapestry. More…
VI Peers
In the luxury goods industry, Tapestry Inc. competes against companies like CCC SA, Prada SpA, and Nordstrom Inc. While each company has its own unique strengths, Tapestry Inc. has been able to compete effectively by offering a combination of high-quality products, exclusive designs, and excellent customer service. As a result, Tapestry Inc. has been able to maintain a loyal customer base and grow its business.
– CCC SA ($LTS:0LS5)
CCA SA is a Chile-based holding company engaged in the telecommunications sector. The Company’s main shareholder is América Móvil, S.A.B. de C.V. (AMX), through its subsidiary Telmex Internacional, S.A.B. de C.V. (Telmex). CCA SA’s subsidiaries include VTR Chile S.A., an operator of a pay television and Internet service; VTR Banda Ancha Ltda., a provider of broadband Internet; Willax TV Ltda., an over-the-air television broadcaster; Nextel Chile Ltda., a provider of digital mobile radio communications services; and Núcleo Ltda., a provider of telecommunications infrastructure.
– Prada SpA ($SEHK:01913)
Prada SpA is an Italian luxury fashion house that designs, manufactures, and markets men’s and women’s clothing, footwear, handbags, and other accessories. The company has a market cap of 96.72B as of 2022 and a Return on Equity of 11.91%. Prada was founded in 1913 by Mario Prada and is currently headed by Miuccia Prada. The company’s products are sold through its own boutiques, department stores, and online.
– Nordstrom Inc ($NYSE:JWN)
Nordstrom, Inc. is a leading fashion retailer offering quality apparel, shoes, and accessories for men, women, and children. Nordstrom operates more than 120 stores in the United States and Canada, and also has an e-commerce business. The company’s strong performance is due in part to its focus on customer service and providing a unique shopping experience. Nordstrom’s market cap is 3.15B as of 2022, and its ROE is 70.09%. Nordstrom is a publicly traded company on the Nasdaq stock exchange.
Summary
Tapestry is a global fashion luxury goods company that has been successfully managing its debt responsibly. The company’s strategy focuses on disciplined capital allocation, including a focus on paying down debt, maintaining a strong financial position, and investing in the business for long-term growth. Tapestry’s balance sheet is strong and its cash flow is stable, with the company having ample liquidity to cover its debt and other operating expenses.
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