Tapestry, Inc. (TPR): BCG Matrix [Dec-2025 Updated]

You're looking for a clear, no-nonsense breakdown of Tapestry, Inc.'s portfolio using the BCG Matrix, and honestly, the picture is pretty lopsided right now. It's a story of one powerhouse brand funding two major strategic pivots. Coach is the clear Star, driving $5.6 billion in FY2025 revenue and capturing a new generation, while the corporate platform acts as the reliable Cash Cow, generating $1.35 billion in adjusted free cash flow to support the whole operation. Meanwhile, you've got Kate Spade as the primary Question Mark needing heavy investment after a 10% revenue fall, and the low-growth Stuart Weitzman Dog is thankfully being exited after its $215 million revenue decline. Dive in below to see how this dynamic shapes their near-term strategy and where the capital is actually flowing.

Background of Tapestry, Inc. (TPR)

Tapestry, Inc. (TPR) operates as a global house of iconic accessories and lifestyle brands, with Chief Executive Officer Joanne Crevoiserat leading the organization through a pivotal year in fiscal 2025.

The company's portfolio going into the latter half of 2025 is primarily focused on its core brands, Coach and Kate Spade, following a significant strategic move. Tapestry, Inc. executed the divestiture of its Stuart Weitzman brand to Caleres, Inc., completing the sale on August 4, 2025, for $105 million in cash.

For the full fiscal year 2025, which ended June 28, 2025, Tapestry, Inc. reported record annual revenue of $7.0 billion, marking a 5% increase from the prior year.

This top-line growth was supported by operational discipline, leading to a gross margin expansion of 210 basis points to 75.4% for the full year. On a non-GAAP basis, the operating margin reached 20% for fiscal 2025, and adjusted earnings per diluted share finished at $5.10.

Performance across the brands was mixed in fiscal 2025. The flagship Coach brand was the primary driver, achieving 10% constant currency growth and generating $5.6 billion in annual revenue. Conversely, the Kate Spade brand saw its revenue fall 10% to $1.20 billion, which resulted in the company recording $855 million in impairment charges related to the brand's intangible assets and goodwill.

Tapestry, Inc. emphasized its commitment to shareholder returns, distributing $2.3 billion to shareholders in fiscal 2025. This included $300 million paid as dividends and $2 billion returned via an Accelerated Share Repurchase program.

The company also focused on consumer acquisition, adding over 6.8 million new customers throughout fiscal 2025, with 60% of those new relationships established with Gen Z and Millennial consumers.

Looking ahead to fiscal 2026, Tapestry, Inc. projects revenue to approach $7.2 billion and forecasts earnings per diluted share to fall between $5.30 and $5.45.

Tapestry, Inc. (TPR) - BCG Matrix: Stars

You're looking at the engine driving Tapestry, Inc.'s current success, and that's definitely the Coach brand. As a Star in the Boston Consulting Group (BCG) Matrix, Coach operates in a high-growth segment and commands a leading market share. This position means it requires significant investment to maintain its growth trajectory, but the payoff is clear in its financial contribution.

Coach was the clear market leader for Tapestry, Inc. in Fiscal Year 2025, bringing in $5.6 billion in annual revenue. This performance was not just about size; it was about momentum. The brand achieved 10% constant currency revenue growth for FY2025, which significantly outpaced the overall group growth rate.

Here's a quick look at the key performance indicators that cement Coach's Star status for FY2025:

The brand's ability to capture future consumers is impressive. You see this in the customer acquisition data, where Gen Z and Millennials made up 60% of the new customers brought into the Tapestry ecosystem. This focus on younger demographics is key to sustaining high market share in a growing category. Also, look at the geographic acceleration; the high-growth momentum is visible across key international markets.

The regional performance shows where the market is expanding fastest for the brand:

• Europe saw growth of +28% in FY2025.
• Greater China grew by +5% in FY2025.
• North America grew by +5% in FY2025 (constant currency).

To keep this engine running, Tapestry, Inc. must continue to invest heavily in promotion and placement. The high market share is supported by a very strong profitability profile, with the brand's gross margin expanding to a robust 78.1% in FY2025. If Coach can sustain this success as the overall market growth rate inevitably slows, it is perfectly positioned to transition into a Cash Cow later on. Finance: review the FY2026 marketing spend allocation to ensure it supports the 10% constant currency growth target.

Tapestry, Inc. (TPR) - BCG Matrix: Cash Cows

You're looking at the core engine of Tapestry, Inc., the corporate platform itself, which acts as the primary Cash Cow, consistently generating substantial capital to support the entire portfolio.

This unit is a market leader that generates more cash than it consumes, which is exactly what you want from a mature, high-market-share business segment. For the full fiscal year 2025, Tapestry, Inc. delivered $1.35 billion in adjusted free cash flow. This robust cash generation is a testament to the operational discipline achieved across the platform.

The profitability underpinning this cash flow is clear when you look at the margins. Tapestry, Inc. achieved a strong non-GAAP operating margin of 20.0% for the full year 2025. That kind of margin in a mature segment means they aren't spending heavily on promotion or placement; instead, they are milking the gains passively while focusing investments on efficiency improvements.

The company is actively returning this capital, showing confidence in its financial standing. In FY2025, Tapestry, Inc. returned $2.3 billion to shareholders via buybacks and dividends. This capital deployment is strategic, supporting both shareholder returns and internal initiatives.

Here's a quick look at the key financial metrics that define this Cash Cow status for fiscal year 2025:

This robust cash flow is doing double duty, you see. It funds the strategic share repurchases, but it also helps cover the necessary, albeit painful, restructuring efforts elsewhere. For instance, the underperformance of the Kate Spade brand resulted in $855 million in impairment charges in FY2025, and the cash generated here provides the financial cushion to manage those turnaround efforts without stressing the core business.

The capital allocation strategy is clear:

• Fund the turnaround efforts at Kate Spade.
• Support strategic share repurchases.
• Maintain the current level of productivity.
• Pay dividends to shareholders.

Finance: draft 13-week cash view by Friday.

Tapestry, Inc. (TPR) - BCG Matrix: Dogs

Dogs are units or products with a low market share and low growth rates. They frequently break even, neither earning nor consuming much cash. Dogs are generally considered cash traps because businesses have money tied up in them, even though they bring back almost nothing in return. These business units are prime candidates for divestiture.

Stuart Weitzman is the textbook Dog in the Tapestry, Inc. portfolio, representing a low-share, low-growth business that the company is actively exiting. This move aligns with the BCG principle that Dogs should be avoided and minimized, as expensive turn-around plans usually do not help. You're looking at a clear strategic decision to shed an underperforming asset.

The financial performance leading up to the exit clearly illustrates this classification. For Fiscal Year 2025 (FY2025), the brand's revenue declined 11% to only $215 million. This consistent underperformance was a drag on blended margins, which is why the divestiture was necessary to sharpen focus on the core, higher-growth brands.

The action taken was definitive: the brand was divested in a $105 million cash deal to Caleres. This transaction is expected to close in the summer of 2025, subject to customary closing conditions. Its removal streamlines the portfolio, allowing Tapestry, Inc. to concentrate capital and management attention on Coach and Kate Spade.

Here's a quick look at the key financial metrics that cemented Stuart Weitzman's Dog status:

The brand's consistent underperformance was a drag on blended margins. For instance, in the third quarter of FY2025, the revenue drop was steep at 17% on a constant currency basis, translating to 46.2 million euros in sales. Furthermore, the brand reported an increasing full-year loss, hitting $21.2 million in the last full year reported before the sale announcement, up from $6.7 million the year prior.

The strategic rationale for the sale is clear: divestiture removes a cash drain and a margin diluter. You can see the focus shifting to the core brands, Coach and Kate Spade, which are expected to drive durable organic growth now that capital is no longer tied up in this low-return segment. Finance: draft the pro-forma margin impact analysis excluding Stuart Weitzman by next Tuesday.

Tapestry, Inc. (TPR) - BCG Matrix: Question Marks

You're looking at the portfolio, and right there in the high-growth/low-share quadrant sits Kate Spade. This brand is the quintessential Question Mark for Tapestry, Inc. right now; it's in a growing premium personal goods market-a space Tapestry values at over $335 billion globally-but its own market share and performance are clearly lagging. It's consuming capital and management focus, needing heavy investment to shift its trajectory before it slips into the Dog category. Honestly, the numbers from fiscal 2025 tell a clear story of underperformance relative to the group's record results.

The financial impact of this brand's struggles was significant enough to warrant a major write-down. For fiscal year 2025, Kate Spade's revenue fell by 10%, landing at $1.20 billion. This decline signals that the brand has yet to find its footing or a clear, compelling market position in the current environment. To be fair, this performance contrasts sharply with the overall company results, where Tapestry, Inc. posted record annual revenue of $7.01 billion, up 5% year-over-year, largely thanks to Coach's 10% growth. This divergence is why Kate Spade is firmly in the Question Mark box.

The most concrete evidence of the reduced cash flow expectations tied to Kate Spade's performance was the massive accounting charge taken. In FY2025, Tapestry, Inc. recorded an $855 million impairment charge related to the brand's intangible assets and goodwill. This charge significantly weighed on the GAAP net income, which came in at $183 million for the year, down from $816 million in the prior year. That's a substantial hit, reflecting the capital required to either turn this brand around or prepare for a potential divestiture down the line.

Here's a quick look at how Kate Spade stacks up against the star performer and the total company for the fiscal year ended June 28, 2025:

Management is definitely aware of the situation and is actively working to shift the brand's narrative. The strategy centers on a deep dive into the brand's core identity, which you'd expect for a Question Mark needing a major investment infusion. They are focusing on design and product strategy to restore growth. This is the make-or-break moment for the brand within the Tapestry portfolio.

The path forward for Kate Spade is binary; it requires decisive action, either heavy investment to capture market share quickly or a sale. The future growth prospects for this unit hinge entirely on the success of the new brand value proposition and the leadership steering this repositioning effort. You'll want to watch for early indicators of consumer adoption in the coming quarters. The immediate action items for the turnaround team include:

• Refining the design aesthetic for modern relevance.
• Redefining the core brand value proposition.
• Restoring positive year-over-year sales growth.
• Demonstrating sequential improvement in brand heat.

If the sequential improvement seen in the latter part of FY2025 continues-where the year-over-year decline improved from 13% in Q4 2025 to 9% in Q1 2026-the brand might see positive year-over-year growth in FY27, which is what management is projecting. Still, until that positive growth is consistently delivered, it remains a cash consumer requiring strategic oversight.

Finance: draft the projected cash burn/investment required for the Kate Spade turnaround plan for the first half of FY2026 by next Wednesday.