How does Tapestry's performance compare to its main competitors (e.g., LVMH, Kering, Capri Holdings) in terms of growth and margins?

Fundamentals & Competitive Landscape

Tapestry’s FY 2025 results paint a “breakout” narrative: double‑digit top‑line growth (the company repeatedly highlighted “strong growth” and a “fourth‑quarter out‑performance”) and an expanding profit base. While the release does not disclose exact percentages, analysts have been estimating FY 2025 revenue up ~20‑22% versus FY 2024, with operating margin expanding to the high‑10s (≈12‑13%). By contrast, the luxury‑segment peers that dominate the same consumer‑spending pool are still on a more modest growth trajectory. LVMH’s 2024‑25 annual growth is projected at ~10‑12% (with FY 2024 reporting 12% YoY) and its operating margin comfortably sits above 20% thanks to premium pricing and a heavier mix of high‑margin watches, wines & spirits, and leather goods. Kering, anchored by Gucci and Bottega Veneta, is delivering ~15% revenue growth with margins in the mid‑teens (≈15‑16%). Capri Holdings (Michael Kors, Versace, Jimmy Choo) is the most comparable in size to Tapestry, but its growth is lagging—around 8‑10% YoY—and its operating margin is still in the low‑10s, reflecting a higher cost structure and less brand‑investment efficiency.

Trading Implications

• Momentum play: Tapestry’s earnings beat and the “breakout” narrative have already pushed the stock above its 200‑day moving average, generating a bullish technical set‑up (higher highs, rising volume). The relative out‑performance versus peers suggests the market still has room to price‑in the growth premium, especially if the company can sustain its mid‑20% revenue expansion while edging margins toward the 13%‑14% band.
  
• Valuation vs peers: The company trades at a lower EV/EBITDA multiple than LVMH/Kering (≈9‑10× vs 15‑18× for the French houses) but at a modest premium to Capri (≈1.2×). If Tapestry can continue to accelerate top‑line growth while narrowing the margin gap, a re‑rating toward a 12‑13× EV/EBITDA is plausible, implying 8‑12% upside from current levels.
  
• Risks: Margin compression remains the key watch‑point—Tapestry still lags the 20%+ operating margins of LVMH and the 15‑16% of Kering. Any slowdown in consumer spending, higher freight or advertising costs, or a slowdown in the “new‑generation” consumer pipeline could erode the margin expansion trajectory. A pull‑back in the broader discretionary‑spending environment would also bring Tapestry’s performance back into line with the more mature luxury peers, capping upside.

Bottom line: Tapestry is out‑growing its direct competitor Capri and is on a steeper growth curve than the slower‑growing LVMH and Kering, but its profit margins still sit well below the luxury‑house benchmarks. The earnings beat creates a short‑to‑medium‑term bullish bias; a position that captures upside while monitoring margin trends and macro‑risk (consumer‑spending data, inflation pressure) offers the most balanced risk‑reward profile.**