Tapestry (TPR) Q4 Results: Revenue Beats, Guidance Raised Amidst Capri Acquisition Cancellation

Key Highlights:

* Q4 CY2024 revenue of $2.20 billion, a 5.3% YoY increase and 4.2% above estimates.
* GAAP EPS of $1.38, a 12.7% miss primarily due to debt extinguishment charge.
* Full-year revenue guidance raised to $6.85 billion, a 1.4% increase.
* Full-year GAAP EPS guidance of $4.88, exceeding analyst estimates by 13%.

Company Overview:

Tapestry (TPR) is a luxury fashion conglomerate with a portfolio of high-quality brands. The company faces market trends of evolving consumer preferences and accelerated e-commerce adoption.

Sales Performance:

Over the last five years, Tapestry's sales growth has averaged a modest 2.4% CAGR. Recent demand has slowed, with annualized revenue growth of 1.4% over the past two years. However, constant currency revenue growth remains stable at 2.5% YoY.

Q4 Results Analysis:

In Q4, Tapestry surpassed revenue estimates with a 5.3% YoY increase. Despite the GAAP EPS miss, analysts anticipate a 1.2% revenue growth over the next 12 months.

Cash Flow Strength:

Tapestry maintains a strong cash flow position. Over the last two years, its free cash flow margin has averaged 16.2%. In Q4, free cash flow margin reached 23%, although it declined slightly compared to the same quarter last year.

Key Takeaways:

* Tapestry surpassed analyst expectations in Q4.
* Full-year guidance was raised, indicating optimism.
* Despite the EPS miss, the company's performance was solid.
* The stock price climbed 14.6% after the results.

Investment Considerations:

To determine whether Tapestry stock is a buy, investors should consider its valuation, business quality, and recent quarterly performance. A detailed research report is available for further analysis.