Tapestry Inc (TPR)
Profitability ratios
Return on sales
| Jun 30, 2025 | Jun 30, 2024 | Jun 30, 2023 | Jun 30, 2022 | Jun 30, 2021 | |
|---|---|---|---|---|---|
| Gross profit margin | 75.44% | 73.29% | 70.78% | 69.57% | 71.04% |
| Operating profit margin | 5.92% | 17.09% | 17.60% | 17.59% | 16.85% |
| Pretax margin | 3.08% | 15.17% | 17.16% | 15.66% | 15.62% |
| Net profit margin | 2.61% | 12.23% | 14.05% | 12.81% | 14.52% |
The analysis of Tapestry Inc.'s profitability ratios over the period from June 2021 to June 2025 reveals several trends.
Gross profit margin has demonstrated a consistent upward trajectory, increasing from 71.04% in June 2021 to 75.44% in June 2025. This indicates a gradual improvement in the company's ability to manage production costs relative to sales, resulting in higher gross profitability over the period.
Operating profit margin has shown slight fluctuations. It increased marginally from 16.85% in June 2021 to a peak of 17.60% in June 2023, reflecting stable operational efficiency. However, it declined to 17.09% in June 2024 and experienced a significant drop to 5.92% in June 2025. This sharp decrease suggests potential operational challenges or increased operating expenses impacting profitability in the most recent fiscal year.
The pretax profit margin followed a similar pattern, increasing modestly from 15.62% in June 2021 to a peak of 17.16% in June 2023. Subsequently, it declined to 15.17% in June 2024 and further plummeted to 3.08% in June 2025, mirroring the decline in operating margins and indicating a deterioration in pre-tax profitability.
Net profit margin has also exhibited a downward trend, decreasing from 14.52% in June 2021 to 12.81% in June 2022, then slightly rising to 14.05% in June 2023. However, the margin declined again to 12.23% in June 2024 and dramatically to 2.61% in June 2025, highlighting a significant erosion of net profitability in the most recent fiscal year.
Overall, while Tapestry Inc. experienced improvements in gross profit margins in the early years, profitability at the operational, pre-tax, and net levels has shown signs of deterioration toward June 2025. The substantial decline in profit margins in 2025 indicates increased expenses, potential margin compression, or other factors negatively impacting overall profitability.
Return on investment
| Jun 30, 2025 | Jun 30, 2024 | Jun 30, 2023 | Jun 30, 2022 | Jun 30, 2021 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 6.31% | 8.51% | 16.47% | 16.18% | 11.55% |
| Return on assets (ROA) | 2.78% | 6.09% | 13.15% | 11.79% | 9.95% |
| Return on total capital | 0.00% | 39.25% | 51.40% | 48.38% | 29.72% |
| Return on equity (ROE) | 21.36% | 28.17% | 41.09% | 37.47% | 25.59% |
The profitability ratios of Tapestry Inc. over the given period exhibit notable fluctuations indicative of changing operational efficiency and financial leverage.
The Operating Return on Assets (Operating ROA) experienced a steady increase from 11.55% on June 30, 2021, to a peak of 16.47% on June 30, 2023. This suggests an improvement in the company's core operational efficiency in generating operating income relative to its assets during this time frame. However, a significant decline is observed in the subsequent years, dropping to 8.51% in 2024 and further to 6.31% in 2025, indicating reduced effectiveness in leveraging assets for operating profits.
Similarly, the Return on Assets (ROA) followed an upward trend, rising from 9.95% in 2021 to 13.15% in 2023, reflecting enhanced overall asset utilization. This trend reversed sharply in 2024 and 2025, with ROA falling to 6.09% and then markedly to 2.78%, which may be attributable to declining profitability, increased asset base without proportional income growth, or other strategic shifts impacting asset efficiency.
The Return on Total Capital demonstrated a substantial increase from 29.72% in 2021 to a peak of 51.40% in 2023, indicating highly effective utilization of total capital during this period. Nevertheless, this ratio exhibits a dramatic decline thereafter, reaching zero by June 30, 2025, suggesting a potential loss of capital efficiency or significant changes in capital structure that adversely affected overall capital returns.
The Return on Equity (ROE) displays a consistent upward trend from 25.59% in 2021 to a peak of 41.09% in 2023, reflecting strong profitability relative to shareholder equity during that period. Post-2023, ROE decreases to 28.17% in 2024 and further to 21.36% in 2025, which may indicate diminished net income margins, increased equity base diluting earnings, or other financial factors impacting shareholders' returns.
Overall, the company's profitability ratios suggest a period of strong operational and financial performance up to 2023, followed by a notable decline in subsequent years. This pattern warrants further analysis into the underlying causes such as market conditions, strategic shifts, or operational challenges affecting profitability and capital efficiency in recent periods.