Tapestry Inc (TPR)
Return on total capital
| Jun 30, 2025 | Jun 30, 2024 | Jun 30, 2023 | Jun 30, 2022 | Jun 30, 2021 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | — | 1,136,900 | 1,170,700 | 1,105,700 | 968,700 |
| Long-term debt | US$ in thousands | — | — | — | — | — |
| Total stockholders’ equity | US$ in thousands | 857,800 | 2,896,900 | 2,277,800 | 2,285,500 | 3,259,300 |
| Return on total capital | 0.00% | 39.25% | 51.40% | 48.38% | 29.72% |
June 30, 2025 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $—K ÷ ($—K + $857,800K)
= 0.00%
The analysis of Tapestry Inc's return on total capital (ROTC) over the specified period reveals significant fluctuations that reflect the company's changing efficiency in generating profits relative to its total capital base.
From June 30, 2021, to June 30, 2023, the company's ROTC demonstrated a marked upward trend, increasing from 29.72% to 51.40%. This escalation suggests a period of enhanced operational performance and effective utilization of capital resources, likely driven by improved profitability, operational efficiencies, or strategic initiatives that increased profit margins relative to the capital employed.
In particular, the growth from the 2021 figure indicates a substantial improvement in capital productivity, reaching a peak of over half of the total capital employed by mid-2023. This trend underscores a period of strong financial health and operational success.
However, a decline is evident into June 30, 2024, when the ROTC decreased to 39.25%. Although still higher than the 2021 level, this reduction indicates some erosion in the company's capacity to generate returns from its total capital, potentially attributable to increased capital investment, rising costs, or a moderation in profit margins.
The data for June 30, 2025, reports a return of 0.00%, which likely signifies the absence of profit generation, possibly due to extraordinary losses, restructuring, accounting adjustments, or other factors leading to a break-even or loss situation, thereby eliminating any attributable return on capital.
Overall, the trend shows an initial period of robust growth in capital efficiency, followed by a decline, culminating in a complete absence of return at the end of the period analyzed. This pattern highlights the importance of scrutinizing underlying operational and strategic factors influencing the company's profitability and capital utilization over time.
Peer comparison
Jun 30, 2025