CEO炉边谈话要点

Aneesha Sherman+1 917 344 8457aneesha.sherman@bernsteinsg.com Jessica Tian+1 917 344 8413jessica.tian@bernsteinsg.com Jed Hodulik+1 917 344 8594jed.hodulik@bernsteinsg.com Price Target TPR 180.00 USD Tapestry: Takeaways from CEO fireside conversation Last week at Bernstein’s Strategic Decisions Conference, we hosted Tapestry for a CEOfireside and meetings. Our key takeaways were around the continued runway for Gen Zcustomer acquisition for Coach, more opportunities for margin expansion, and Mgmt’sconfidence in a continued runway for strong earnings growth medium-term. Gen Z customer acquisition is a key growth driver for Coach, creating a positive haloeffect on brand heat across the customer base. Coach is not only taking share fromEuropean luxury but is growing the category by adding new Gen-Z consumers at point ofentry for their first luxury handbag. Gen-Zs have higher AURs, higher retention rates, anddrive resonance and brand heat across older generations. Continued upside on margins from operational and AI improvements, and strongmarketing ROI. TPR has embedded AI into core operations and real-time decisions onpricing, promotions, design, supply chain, allocation and marketing (see our conversationwith TPR’s Chief Data Officer) which drive margins through operational efficiency and AURand AUC gains. Margins have improved despite Marketing growing from 3% of sales (2019)to 13%, as Mgmt makes high ROI marketing investments that boost growth and leverage. After hitting mid-term targets two years early, how to think about growth from here?Within a year, TPR has already hit its 3-yr targets on growth (mid-teens in 1yr vs. MSD%for 3 yrs) and margin (>22%). Mgmt considered MSD% a good base growth level to buildfrom, with opportunity for higher growth at stronger margins, from a highly cash generativebusiness that returns 100% of cash flow to shareholders. The mostly variable cost baseallows the flexibility to lean into growth and invest behind it, but also to protect margins if thedemand environment were to slow down. Investment Implications DETAILS Other work on TPR: •How are brands and retailers embedding AI? Fireside chat with Tapestry's Chief Data Officer•Tapestry: A rare discount for Coach•Tapestry: Can Coach's winning streak continue? (redux)•US Apparel & Specialty Retail: What's in our shopping basket for 2026? KEY TAKEAWAYS Tapestry has gone through a major transformation over the past six years. Compared to when Joanne Crevoiseratbecame CEO in 2020, the company is much more consumer-centric(including greater agility and real-timeresponsiveness), harnesses data more in daily decision-making (helped by ongoing investments to scale data usage and AIcapabilities) and is investing much more into a powerful marketing and brand-building engine (with marketing up from ~3% ofsales in 2019 to ~13% in 2026). As a result, the company now operates with greater clarity around its target consumer, a morestreamlined and disciplined assortment, and improved execution, all of which are driving stronger performance. Coach’s continued share gains are driven by a strong focus on Gen Z customer acquisition. Although AUR for the corecategory of handbags has gone up steadily on a quarterly basis for over five years in a row, growth is not coming from like-for-like pricing changes but rather from a positive price mix driven largely by acquiring new customers entering the brand at higherprice points. The growth is particularly coming from first-time category entrants to the luxury bag market, which is a large andexpanding TAM globally, and together with Millennials are expected to account for ~70% of category spend by 2030. Although Gen Zs are sometimes thought of as fickle and not brand loyal, TPR’s retention rates among Gen Z are higher thanacross their total customer base, supported by a flywheel of strong initial engagement (marketing, digital, stores, product),repeat purchase, and continued brand reinforcement. These consumers also create brand heat and a positive halo that drivesrelevance across other generations. Coach is growing the category, not just taking share from European luxury brands. While some share shift is clearlyhappening, as Coach’s gap vs. European luxury pricing is at an all-time high, driving a strong value proposition, there is alsocategory expansion. The data shows this clearly: For the second year in a row, Coach is growing double digits in a globalhandbags category that is expanding only LSD% which means that, ex-Coach, TPR’s analysis suggests that category growthis effectively flat. This indicates that Coach’s growth is primarily coming from bringing new consumers into the category, in linewith Mgmt’s positioning of the brand as the “point-of-market entry” for new consumers looking for a luxury handbag. As top line grows, margins have steadily increased, and Mgmt sees more opportunities for margin expansion. Coachhas invested in sophisticated, AI-driven pattern recognition and