Tapestry Inc (TPR)

Short-term

Turnover ratios

The activity ratios for Tapestry Inc over the fiscal years ending June 30, 2021 through June 30, 2025, reveal trends in inventory management, receivables efficiency, payables practices, and overall working capital utilization.

Inventory Turnover:
The inventory turnover ratio fluctuated modestly over the period. It decreased from 2.27 in 2021 to 2.05 in 2022, indicating a slight slowdown in inventory sales or management efficiency. This ratio then experienced a modest rebound to 2.12 in 2023 and crept upward further to 2.16 in 2024 before declining slightly to 2.00 in 2025. The overall trend suggests a relatively stable inventory management pattern with minor fluctuations, reflecting consistent turnover periods.

Receivables Turnover:
The receivables turnover experienced notable variations. It started at 28.70 in 2021, decreased to 26.49 in 2022, then increased substantially to 31.49 in 2023, indicating improved collection efficiency during that year. However, significant deterioration occurred in 2024, dropping sharply to 14.37, which suggests a slowdown in receivables collections or potential extension of credit terms. The ratio then improved again to 29.30 in 2025, almost returning to 2021 levels, indicating an overall recovery in receivables management.

Payables Turnover:
The payables turnover ratio shows a generally increasing trend from 3.74 in 2021 to 4.67 in 2023, indicating a tendency to pay suppliers more frequently or promptly, which could be a sign of improved liquidity or strategic payment practices. Subsequently, the ratio declined slightly to 3.94 in 2024 and then to 3.78 in 2025, suggesting a modest slowdown in payables turnover but still remaining at a relatively efficient level.

Working Capital Turnover:
This ratio measures how effectively the company utilizes its working capital to generate sales. There was a substantial jump from 2.95 in 2021 to 6.05 in 2022, then a slight increase to 6.18 in 2023, reflecting efficient utilization of working capital. The ratio sharply declined to 0.94 in 2024, indicating a significant drop in working capital efficiency during that period. In 2025, the ratio rebounded to 5.20, demonstrating a recovery in working capital utilization, albeit not reaching the levels seen in 2022 and 2023.

Summary:
Overall, Tapestry Inc’s activity ratios display a pattern of stable inventory management with slight fluctuations, significant variability in receivables collection efficiency, a generally improving payables practice, and a highly volatile but overall recovering working capital turnover. The sharp decline in working capital efficiency in 2024 warrants further investigation to understand underlying causes, while the subsequent rebound indicates an adaptation or implementation of strategies to enhance balance sheet management.

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Average number of days

The activity ratios of Tapestry Inc., as reflected in the provided data, offer insights into the company's operational efficiency over the period from June 2021 to June 2025.

Days of Inventory on Hand (DOH):
The company's inventory holding period exhibits a fluctuating trend during the analyzed years. In June 2021, the DOH was approximately 161.14 days, which increased significantly to 178.40 days by June 2022, indicating a lengthening of inventory duration. Thereafter, there was a slight decrease to 172.47 days in June 2023, followed by a marginal reduction to 168.97 days in June 2024. However, by June 2025, the DOH increased again to 182.46 days. The overall pattern suggests periods of inventory accumulation interspersed with modest improvements, with inventory typically remaining held for several months at a time.

Days of Sales Outstanding (DSO):
Tapestry Inc.'s collection period—measured in DSO—demonstrates considerable variability. The DSO was relatively low at 12.72 days in June 2021 and increased to 13.78 days in June 2022, indicating a slight decrease in receivables collection efficiency. Notably, in June 2023, the DSO decreased further to 11.59 days, suggesting improved receivables management during that period. However, this efficiency was compromised in June 2024 when DSO spiked to 25.41 days, indicating delays in collections and potential liquidity implications. By June 2025, the DSO reverted to closer to initial levels at 12.46 days, evidencing a return to more efficient receivables management.

Number of Days of Payables:
The company's payables period reflects its approach to managing liabilities. The payables days decreased from 97.63 days in June 2021 to 78.20 days in June 2023, implying a quicker turnover in settling payables or possibly improved payment terms. Subsequently, the payables days increased to 92.64 days in June 2024 and further to 96.69 days in June 2025, signaling a lengthening of the payment cycle, potentially to conserve cash or leverage supplier terms.

Summary:
Overall, Tapestry Inc. has experienced variations in operational efficiency, particularly evident in the inventory and receivables management metrics. The inventory period has fluctuated around roughly 160 to 182 days, which may indicate challenges in inventory turnover or strategic stockholding. The receivables collection efficiency has generally been good, with periods of delay notably in 2024. The payables management indicates a trend towards longer payment periods after 2023, possibly reflecting strategic decisions to optimize cash flows.

This analysis reflects a company whose operational cycle dynamics have evolved over time, with periods of efficiency and challenges that may affect overall working capital management and liquidity position.

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Long-term

The analysis of Tapestry Inc.'s long-term activity ratios reveals notable trends in asset utilization over the period from June 30, 2021, to June 30, 2024.

The Fixed Asset Turnover ratio, which measures how efficiently the company employs its fixed assets to generate sales, shows an upward trajectory from 2.64 in 2021 to 3.66 in 2022, indicating improved utilization. However, this ratio declines slightly to 3.43 in 2023, suggesting a slight reduction in efficiency, before increasing again to 3.65 in 2024. The absence of data for 2025 precludes further analysis for that year.

In contrast, the Total Asset Turnover ratio exhibits more variability. It increased from 0.69 in 2021 to 0.92 in 2022, reflecting enhanced overall asset efficiency. This positive trend continues modestly with a slight increase to 0.94 in 2023. However, a notable decline occurs in 2024, when the ratio drops to 0.50, indicating a significant decrease in the company's effectiveness in generating sales from its total assets. The ratio then rebounds sharply in 2025 to 1.07, surpassing previous years, and suggesting a substantial improvement in overall asset utilization.

Overall, these ratios depict a pattern of improvement in asset efficiency during 2021 and 2022, a temporary dip in 2024, and a strong recovery in 2025, particularly in total asset turnover. This fluctuation may reflect changes in operational assets, strategic investments, or adjustments in sales efficiency. The sustained high levels of fixed asset turnover post-2022 indicate ongoing effective utilization of fixed assets, whereas the volatility in total asset turnover underscores varying effectiveness across overall asset management.