Tapestry Inc (TPR)
Interest coverage
| 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 |
| Interest expense | US$ in thousands | 85,400 | 125,000 | 27,600 | 58,700 | 71,400 |
| Interest coverage | 0.00 | 9.10 | 42.42 | 18.84 | 13.57 |
June 30, 2025 calculation
Interest coverage = EBIT ÷ Interest expense
= $—K ÷ $85,400K
= 0.00
The interest coverage ratios for Tapestry Inc. over the indicated periods demonstrate notable fluctuations, reflecting changes in the company's ability to meet its interest obligations from its earnings before interest and taxes (EBIT).
As of June 30, 2021, the interest coverage ratio stood at 13.57, indicating that the company's EBIT was approximately 13.57 times its interest expense. This high ratio suggests a strong capacity to cover interest payments, reflecting a robust financial position at that time.
By June 30, 2022, the ratio increased markedly to 18.84. This increase suggests an improvement in operational profitability or a reduction in interest obligations, further strengthening the company's ability to service its debt.
The upward trend continued into June 30, 2023, with the ratio reaching 42.42. Such a substantial increase indicates an even stronger capacity to cover interest expenses, which could be attributed to significantly improved EBIT, reduced interest expense, or a combination of both. This level of coverage typically underscores low financial risk concerning interest obligations.
However, by June 30, 2024, the ratio dramatically declined to 9.10. While still indicating sufficient coverage, this reduction points to a relative weakening in the company's ability to meet interest expenses. Factors contributing to this decrease could include declining EBIT, increased interest expenses, or both.
Finally, on June 30, 2025, the interest coverage ratio drops to zero, suggesting that Tapestry Inc. may no longer have sufficient EBIT to cover interest expenses, or possibly that the company has eliminated interest payments altogether, perhaps through debt restructuring, default, or other financial arrangements. This significant deterioration in the ratio signals heightened financial risk and warrants closer scrutiny of the company's debt obligations and overall financial health.
Overall, the trend from 2021 to 2023 indicates a period of strong financial stability with high interest coverage ratios. However, the subsequent decline in 2024 and 2025 signals increasing financial vulnerability, with a critical concern emerging as the coverage ratio approaches zero, indicating potential challenges in meeting interest obligations moving forward.
Peer comparison
Jun 30, 2025