Retailing/Specialty Stores: Luxury Brands

TAPESTRY
Published and distributed by Cowen and Company, LLC

EQUITY RESEARCH EARNINGS UPDATE

February 8, 2024

Price: $42.99 (02/8/2024) 2Q EPS: COACHONOMICS FLYWHEEL,

Price Target: $52.00 (Prior $40.00) CULTURAL RELEVANCE, & GOOD PRODUCT
OUTPERFORM (1)
PLATFORMS
ESG SCORE: 58/100

Oliver Chen, CFA THE TD COWEN INSIGHT

646 562 1424
oliver.chen@cowen.com
Reiterate Outperform. EPS beat driven by revenue and margin upside at Coach (+7%
vs. 3.5%). We like TPR’s cost management, Gen Z relevant marketing, new customer
Katy Hallberg acquisition, & +MSD% AUR growth. New FY24E EPS guidance (beat by 17c, raised by 10c)
646 562 1321 reflects stronger revenues at Coach partially offset by challenges at KS & SW, while also
katy.hallberg@cowen.com benefiting from margin expansion on freight and operations.
Tom Nass, CFA
646 562 1316 TPR exceeded expectations with EPS of $1.63 vs. Street's $1.46, primarily driven by +7% cc
thomas.nass@cowen.com revenue growth at Coach along with +300bps of EBIT margin expansion for the brand. The
Neil Goh business also saw impressive cost control across Kate Spade and Stuart Weitzman, which
646 562 1322 contributed to better than expected operating income. Sales were supported by strong
neil.goh@cowen.com international trends (+19% in Greater China, +11% in Europe, +9% in Other Asia), while North
America was in-line to last year. Further, the company saw +MSD% trends in both stores
Key Data
and online, which were partially offset by slower trends in wholesale (-4%).
Symbol NYSE: TPR
Beta: 1.54 We believe TPR is leveraging proprietary data, inventory agility, and effective marketing
52-Week Range: $45.37-$26.59 to continue to gain customers in an otherwise challenging environment. TPR's flywheel
Market Cap: $9.9B model is powered by increasing gross margin through cost reduction, higher prices, and
Net Debt (MM): $1,877.4
lower promos. This, coupled with cost-efficient SG&A, allows the business to invest heavily
in marketing to drive brand heat. We raise our target to $52 from $40 based on 11x our
Cash/Share: $5.59
FY25E EPS estimate.
Dil. Shares Out (MM): 231.7
Enterprise Value (MM): $11,838.2 Key Highlights: (1) Trends in North America were better than anticipated at in-line to last
ROIC: 15.4% year's sales although stronger margins, driven by solid performance at Coach including
ROE (LTM): 18.9% +MSD% handbag AUR; (2) Gross margins were strong during the quarter and increased
BV/Share: $10.54
+304bps largely due to continued benefits from freight, as well as operational strength
and geo mix; and (3) Kate Spade will have a greater pipeline of newness in 2H given better
Dividend: $1.30
customer responses to innovation.
Yield: 3.02%
Modeling Considerations: (1) The freight benefit will be most pronounced in 3Q which
FY (Jun) 2023A 2024E 2025E should moderate slightly in 4Q, although the gross margin could continue to benefit from
EPS strong AURs and geo mix; (2) Management does not currently expect a material impact on
Q1 $0.79 $0.93A - either pricing or lead timing with regard to the Red Sea crisis; and (3) The company could
Prior Q1 - - -
see higher SG&A growth in 3Q relative to 4Q given investments in the business and growth -
we model SG&A +4.3% in 3Q and +0.8% in 4Q.
Q2 $1.36 $1.63A -
Prior Q2 - $1.45 - TD Cowen's Updated Thoughts on the CPRI Acquisition: The company continues to work
Q3 $0.78 $0.69 - towards completing the acquisition of CPRI and most recently was granted approval by
Prior Q3 - $0.77 - China's SAMR. The approval was also granted without conditions. Recall, the FTC issued a
Q4 $0.95 $1.01 - second request in early November and investors continue to be in a wait-and-see mode in
Prior Q4 - $0.93 -
terms of FTC approval.
Year $3.88 $4.25 $4.66 We continue to believe the deal will close given the competitive and discretionary nature
Prior Year - $4.13 $4.46 of handbags. We also see opportunity for TPR to monetize one of the assets if needed
P/E 11.1x 10.1x 9.2x post-close, in order to pay down debt, although we believe there is sufficient FCF from
Consensus EPS $3.88 $4.14 $4.49 the combined entity to reduce leverage. In our view, we do not believe consumers would
Consensus source: FactSet be harmed with a combination given the competitive nature of the category and varying
degrees of cultural relevance. We acknowledge the combined market share is substantial if
Revenue (MM) you chose to define the outlet market or $300-500 price band only.
Year $6,660.9 $6,712.2 $6,977.5
Prior Year - $6,716.8 $6,955.4
EV/S 1.8x 1.8x 1.7x

Please see pages 8 to 13 of this report for important disclosures. TDCOWEN.COM

TD COWEN Tapestry
EQUITY RESEARCH February 8, 2024

AT A GLANCE

Our Investment Thesis Forthcoming Catalysts

We rate TPR Outperform given: (1) prospects for EPS growth on average unit retail and gross ■ 3Q24 EPS in May
margin increases at Coach and Kate Spade, (2) Coach Outlet strength driving new customer ■ CPRI Acquisition closing
acquisition, especially value-oriented younger customers, and (3) further growth prospects
from higher e-comm penetration and China penetration, both of which carry higher margins.
We also like TPR's ability to generate sustainable FCF, each brand's international growth
opportunities, and Coach's consistent performance.

Base Case Assumptions Upside Scenario Downside Scenario

■ Long-term annual growth rate +HSD%-
LDD% as brand awareness and inventory
productivity increase
■ Gross margin expansion with lower
promotions, higher AURs
■ SG&A expense reductions leading to
lower SG&A dollars
■ Tapestry, Inc. revenues up +LT%
■ Kate Spade & Stuart Weitzman sales
improving faster than anticipated
■ Gross & EBIT margin expansion beating
expectations
■ Weak consumer confidence pressuring
discretionary spending
■ Spending by Chinese consumers falls off
■ Digital channel disruptions

Price Performance Company Description

Tapestry, Inc. is a New York-based house of modern luxury lifestyle brands that includes
$50
the Coach brand, Kate Spade New York, and Stuart Weitzman. Coach brand was founded in
1941 and has established itself as one of the most recognized fine accessories and modern
45 luxury brands in N. America and in targeted international markets, reaching total revenue
of $6.7bn in FY22. Stuart Weitzman is a leading global women's premium footwear brand
40 that generated $318mm revenue in FY22. TPR also acquired Kate Spade in July 2017. Kate
Spade is lifestyle brand known for its crisp color, graphic prints and playful sophistication.
As of June 30, 2022, Coach brand operated 343 stores in N. America and 602 stores
35
internationally; Kate Spade operated 207 stores in N. America and 191 stores abroad; and
Stuart Weitzman operated 100 stores globally. All three brands also distribute product via
30 wholesale at major department stores in the U.S. and abroad, as well as via digital flagships.

25
May-23 Aug-23 Nov-23 Feb-24
Analyst Top Picks
Source: Bloomberg
Ticker Price ( 02/8/2024) Price Target Rating
Walmart WMT $169.37 $188.00 Outperform
Costco Wholesale COST $724.16 $700.00 Outperform
Ulta Beauty ULTA 519.12 580.00 Outperform

2 TDCOWEN.COM
TD COWEN Tapestry
EQUITY RESEARCH February 8, 2024

TD COWEN ESG SCORES

Tapestry Tapestry(TPR) ESG Material Category Rankings as of February 8, 2024

NYSE: TPR
Top 3 Material ESG Categories Dynamic Materiality TM Score
ESG Score: 58/100 Product Lifecycle 23% 76
Material Sourcing 20% N/A
ESG Industry Percentile: 24th Employee Health 11% 78

ESG MATERIALITY
Establishing materiality is critical to evaluating a company’s ESG performance. Factors most material in one sector (or to a particular company) may not be as important to another. In
addition, the factors that are material – and the degree to which factors are material – can change over time.

Applying data to frameworks established by SASB (the Sustainability Accounting Standards Board) and by Truvalue Labs, we present in the chart above the three most material
ESG factors that investors should focus on for the company that is the subject of this report; the Dynamic Materiality™ of each factor (i.e., what percentage of overall materiality the
category represents for the subject company); and a Score for the subject company in each of these three categories (on a 0 to 100 basis, with 50 being average).

We also calculate an overall ESG Score for the subject company, which is presented above (in green) and on the cover of this report. A full explanation of how this ESG Score is derived
is presented below.

HOW ARE TD COWEN’S ESG SCORES CALCULATED?

TD Cowen leverages technology from Truvalue Labs to generate our ESG scores. Truvalue Labs uses artificial intelligence to capture the stakeholder view of how companies are
performing on ESG metrics, using the Sustainability Accounting Standards Board (SASB) materiality framework (www.sasb.org). These data are leveraged to calculate a score for
each company, which allows TD Cowen to have a common framework and uniform way to approach ESG discussions with our clients. TD Cowen ESG scores appear on Company and
Company Quick Take notes and are updated daily.

HOW DOES THE PROCESS WORK?

The process begins with capturing unstructured data from more than 100,000 sources, in 14 languages. These data are culled from a wide range of sources with varied perspectives,
including industry publications, news outlets, NGOs, trade unions, government sources, legal and regulatory filings, and academic publications.

Natural language processing is used to interpret semantic content from the original sources and generate analytics by applying criteria consistent with established sustainability and
ESG frameworks. Performance is scored on a 0 to 100 scale. A score of 50 represents a neutral impact. Scores above 50 indicate more positive performance, and scores below reflect
more negative performance. A score of NA means not enough data is available on the company to generate a score.

TDCOWEN.COM 3
TD COWEN Tapestry
EQUITY RESEARCH February 8, 2024

Coach Powers Solid 2Q Performance on Sales & Margin

Coach reported solid +7% cc revenue growth as the brand maintains impressive momentum
across geographies. Leather goods remain a key margin and traffic driver due to continued
innovation across the Tabby family among other icons, while the brand is also seeing growth
within the lifestyle product. Note, Tabby has doubled year-over-year. Further, TPR continues
to execute on +MSD% AUR growth through higher initial pricing for new products and
less discounting. Meanwhile, Kate Spade saw sales decline -6% on a cc basis, although
operating income of $72.1mm was ahead of Street expectations of $59.6mm on effective
cost management. Near-term, we expect sales to be supported by the launch of the online
outlet site and incremental newness slated for 2H.

Figure 1 - TPR Sales Mix

Source: TD Cowen, Company Data

TPR Raises FY24E Outlook on Better 2Q Trends, But Cautious Approach to 2H
TPR is maintaining the reported revenue outlook of $6.7bn, which implies ~1% growth, and
includes ~100bps of anticipated FX headwinds. That said, key components to the reaffirmed
revenue guidance include stronger performance by Coach and moderating headwinds from
F/X, although lower overall expectations for Kate Spade and Stuart Weitzman. The new
guidance reflects a ~10c increase to the EPS outlook ($4.20-4.25) which includes the 17c beat
in 2Q as well as further reinvestment into the brands through the 2H. By geography, TPR
expects North America revenue in-line to slightly positive, Greater China +MSD%, Other Asia
+LDD%, Europe +HSD%, and Japan +MSD%. On the margin side, TPR is guiding for 200bps of
gross margin expansion, which includes a 120bps benefit from freight, as well as ~100bps of
deleverage on SG&A related to greater investments in growth.
Figure 2 - Brand Performance
1Q23 2Q23 3Q23 4Q23 1Q24 2Q24
Coach Revenue Growth 0% -5% 7% 3% 3% 6%
EBIT margin 30.3% 31.3% 29.9% 31.7% 32.1% 34.3%
y/y bps (260)bps 20bps 320bps 260bps 180bps 300bps
Kate Spade Revenue Growth 7% -2% -1% -10% -6% -6%
EBIT margin 7.1% 14.1% 2.7% 4.8% 8.8% 15.7%
y/y bps (570)bps (310)bps (100)bps (330)bps 160bps 160bps
Stuart Weitzman Revenue Growth -2% -26% 7% -13% -19% -4%
EBIT margin -7.7% 0.8% 1.2% -5.0% -16.3% 1.7%
y/y bps (600)bps (1,320)bps 1,120bps (40)bps (870)bps 90bps
Total Company Revenue Growth 2% -5% 5% 0% 0% 3%
EBIT margin 16.9% 20.6% 15.0% 16.9% 18.0% 22.8%
y/y bps (381)bps (159)bps 276bps 92bps 110bps 218bps

Source: TD Cowen, Company Data

3Q EPS Recap
■ Coach: Revenue increased +7% cc to $1.54bn and beat the Street's estimate of $1.50bn
driven by brand heat and momentum across geographies. The brand also reported
operating income of $528.3mm, ahead of the Street's $487.1mm, and implies a margin of
34.3% or +300bps y/y.

■ Kate Spade: Revenue fell -6% cc to $460.4mm and just missed the Street's expectations of
$479.1mm. Despite lower revenue, the brand posted operating income of $72.1mm which
was well ahead of the Street's $59.6mm estimate and implies at 15.7% margin.

4 TDCOWEN.COM
TD COWEN Tapestry
EQUITY RESEARCH February 8, 2024

■ Stuart Weitzman: While sales fell -3% cc to $82.2mm, the results beat the consensus
estimate of $79.3mm and represent a meaningful improvement from the -19.4% decline in
1Q. Operating income of $1.4mm was also well ahead of the Street's -$2.8mm estimate.

Companies mentioned: Capri Holdings (CPRI, $47.54, Market Perform)

TDCOWEN.COM 5
TD COWEN Tapestry
EQUITY RESEARCH February 8, 2024

TPR IS

53rd week 53rd week

Tapestry, Inc. FY16A FY17A FY18A FY19A
FY19E FY20A
FY19E FY21A FY22A 1Q23A 2Q23A 3Q23A 4Q23A FY23A 1Q24E 2Q24E 3Q24E 4Q24E FY24E FY25E
Income statement Jun-16 Jun-17 Jun-18 Jun-19 Jun-20 Jun-21 Jun-22 Sep-22 Dec-22 Mar-23 Jun-23 Jun-23 Sep-23 Dec-23 Mar-24 Jun-24 Jun-24 Jun-25
$ in MM, except per share data
Coach brand 4,147 4,114 4,222 4,271 3,526 4,253 4,921 1,119 1,450 1,144 1,247 4,960 1,157 1,542 1,142 1,260 5,102 5,247
Kate Spade 0 0 1,285 1,367 1,150 1,210 1,446 322 490 297 310 1,419 303 460 282 306 1,352 1,456
Stuart Weitzman 345 374 374 389 286 283 318 65 85 68 63 282 53 82 64 60 258 274
Net revenues, cont. operations 4,492 4,488 5,880 6,027 4,961 5,746 6,685 1,507 2,025 1,510 1,620 6,661 1,513 2,085 1,488 1,627 6,712 6,977
Cost of sales 1,439 1,404 1,910 1,946 1,604 1,673 2,034 452 636 411 447 1,946 416 591 389 433 1,829 1,874
SG&A 2,276 2,271 2,978 3,136 2,919 2,979 3,432 800 971 872 899 3,542 825 1,017 909 906 3,658 3,792
Adj. Operating income 777 813 992 945 438 1,095 1,219 255 418 226 274 1,173 273 476 189 287 1,225 1,311
Adj. EBITDA 1,214 687 1,344 1,414 299 463 268 325 1,355 317 521 231 339 1,408 1,494
Interest & other income (expense), net -27 -28 -74 -48 -73 -71 -129 -18 -1 -3 -7 -29 -15 -45 -46 -50 -155 -155
Pretax income 750 784 918 898 365 1,025 1,090 237 417 223 267 1,143 258 431 143 237 1,070 1,156
Taxes 173 179 158 149 94 184 207 41 87 37 43 207 42 99 26 45 211 231
Net Income 552 609 760 749 271 841 936 196 330 187 224 936 216 377 161 236 991 1,057
Diluted shares 279 283 290 291 276 283 272 247 243 240 235 241 233 232 234 235 233 227
EPS, reported $1.65 $2.09 $1.37 $2.32 ($2.36) $3.19 $3.15 $0.79 $1.36 $0.78 $0.95 $3.88 $0.84 $1.39 $0.50 $0.82 $3.55 $4.08
Adj. EPS $1.98 $2.15 $2.64 $2.57 $0.97 $2.97 $3.44 $0.79 $1.36 $0.78 $0.95 $3.88 $0.93 $1.63 $0.69 $1.01 $4.25 $4.66

Growth and ratio analysis

Coach YoY sales growth (1%) (1%) 3% 1% (17%) 21% 16% 0% -5% 7% 3% 1% 3% 6% 0% 1% 3% 3%
Kate Spade YoY sales growth - - - 4% (14%) 5% 19% 7% -2% -1% -10% (2%) -6% -6% -5% -1% (5%) 8%
Stuart Weitzman YoY sales growth - 9% (0%) 4% (27%) (1%) 12% -2% -26% 7% -13% (11%) -19% -4% -7% -4% (8%) 6%
Total Company YoY sales growth 7% (0%) 31% 3% (18%) 16% 16% 2% (5%) 5% (0%) (0%) 0% 3% (1%) 0% 1% 4%

Adj. Gross margin 68.0% 68.7% 67.5% 68.0% 67.7% 70.9% 69.6% 70.0% 68.6% 72.8% 72.4% 70.8% 72.5% 71.6% 73.8% 73.4% 72.7% 73.1%
YoY change -167 bps 76 bps -119 bps 62 bps -38 bps 323 bps -132 bps -214 bps 53 bps 284 bps 353 bps 122 bps 251 bps 304 bps 107 bps 95 bps 195 bps 40 bps
Adj. SG&A rate, excluding items 50.7% 50.6% 50.7% 52.0% 58.8% 51.8% 51.3% 53.1% 47.9% 57.8% 55.5% 53.2% 54.5% 50.2% 61.1% 55.7% 54.5% 54.3%
YoY change -15 bps -6 bps 5 bps 147 bps 680 bps -700 bps -49 bps 168 bps 212 bps 8 bps 262 bps 184 bps 141 bps 221 bps 334 bps 19 bps 131 bps -14 bps

Adj. Operating margin, excluding items 17.3% 18.0% 16.9% 15.7% 8.8% 19.1% 18.2% 16.9% 20.6% 15.0% 16.9% 17.6% 18.0% 22.8% 12.7% 17.7% 18.3% 18.8%
YoY change -132 bps 78 bps -117 bps -118 bps -685 bps 1022 bps -83 bps -381 bps -159 bps 276 bps 92 bps -62 bps 110 bps 218 bps -227 bps 76 bps 65 bps 77 bps
EPS, reported 13.6% 26.8% -34.5% 69.3% -201.9% -234.9% 277.4% -0.3% 18.2% 68.5% 27.2% 387.3% 5.8% 2.6% -35.5% -13.9% 668.4% 29.5%
EPS, adjusted* 3.2% 9.0% 22.3% -2.3% -62.4% 207.6% 15.7% -3.7% 2.2% 51.7% 21.8% 12.7% 17.1% 19.9% -11.3% 5.8% 9.7% 9.5%
Tax rate 23.1% 22.8% 17.2% 20.9% (4.5%) 7.8% 18.2% 16.5% 21.2% 16.4% 16.0% 18.1% 16.1% 20.0% 18.0% 19.0% 19.1% 20.0%
* FY17 4Q and Full-Year EPS growth adjusted to exclude 53rd week in FY16

Source: TD Cowen.

6 TDCOWEN.COM
TD COWEN Tapestry
EQUITY RESEARCH February 8, 2024

VALUATION METHODOLOGY AND RISKS

Valuation Methodology

Luxury Brands:
Our valuation methodology is primarily based on Price-to-Earnings (P/E), followed by
Enterprise Value to EBITDA (EV/EBITDA), Price-to-Free Cash Flow (P/FCF) ratios, and DCF
analysis. We may also use Enterprise Value to Revenue (EV/Revs) for companies operating
at depressed levels of profitability. In some cases we use probability weighed, scenario-
based decision trees as a basis for devising our price targets. We incorporate the company’s
and its peers’ historical and current valuation multiples, as well as our analysis of future
growth rates, company-specific risks, return on invested capital, and other inputs from our
research when devising our valuation multiples and the probabilities we assign to different
scenarios when developing our price targets.
We make investment recommendations on certain early stage, pre-revenue companies
based upon an assessment of their business model, technology, probability of market
success, and the potential market opportunity, balanced by an assessment of applicable
risks. Such companies may not be assigned a price target.

Investment Risks

Luxury Brands:
Risks to the companies in our sector include risks and uncertainties associated with the
global economic environment and consumer spending, as well as general competition
within the consumer and fashion products industries and fluctuating consumer demand
trends, which can create variability in sales and margins. Increases in the prices of raw
materials, rent, freight, labor, tariffs, or manufacturers’ inability to produce goods on time or
to specifications may negatively impact results. Execution flaws and the departure of certain
key executives may negatively affect performance and financial results. Legal, regulatory,
political, currency, and economic risks, as well as challenges to maintain favorable brand
recognition, loyalty, and reputation for quality, may affect the ability to conduct business in
both domestic and international markets.

Risks To The Price Target

The turnaround effort may not progress at Kate Spade as well as hoped, resulting in a
delay and risk to returning to growth. Increasing sales mix of footwear and apparel may
exert downward pressure on margins. Fashion and inventory risks in handbag, accessories,
outerwear, and footwear may hamper results across brands. Execution risk, related to new
executives including the CEO and the head designer, may affect results. Competition from
CPRI, Tory Burch and other brands, as well as the resale market, may intensify, resulting in
increased market share loss.

TDCOWEN.COM 7
TD COWEN Tapestry
EQUITY RESEARCH February 8, 2024

ADDENDUM
Stocks Mentioned In Important Disclosures
Ticker Company Name
CPRI Capri Holdings
COST Costco Wholesale
TPR Tapestry
ULTA Ulta Beauty
WMT Walmart

Analyst Certification
Each author of this research report hereby certifies that (i) the views expressed in the research report accurately reflect his or her personal views about any and all of the subject
securities or issuers, and (ii) no part of his or her compensation was, is, or will be related, directly or indirectly, to the specific recommendations or views expressed in this report.

Important Disclosures
Cowen and Company, LLC makes a market in the stock of Tapestry, Costco Wholesale, Capri Holdings, Ulta Beauty and Walmart securities.
Cowen and Company, LLC or its affiliates managed or co-managed a public offering of Tapestry and Walmart in the past 12 months.
Cowen and Company, LLC or its affiliates received compensation for investment banking services from Tapestry and Walmart in the past 12 months.
Cowen and Company, LLC or its affiliates expect to receive, or intend to seek, compensation for investment banking services in the next 3 months from Tapestry.
Tapestry and Walmart is or has been in the past 12 months a client of Cowen and Company, LLC; Cowen and Company, LLC has provided investment banking services during the past
12 months.
Cowen and Company, LLC compensates research analysts for activities and services intended to benefit the firm's investor clients. Individual compensation determinations for research
analysts, including the author(s) of this report, are based on a variety of factors, including the overall profitability of the firm and the total revenue derived from all sources, including
revenues from investment banking, sales and trading or principal trading revenues. Cowen and Company, LLC does not compensate research analysts based on specific investment
banking transactions or specific sales and trading or principal trading revenues.

Disclaimer
TD Cowen Research Reports: TD Cowen research reports are simultaneously available to all clients on our client website. Research reports are for our clients only. Not all research
reports are disseminated, e-mailed or made available to third-party aggregators. Cowen and Company, LLC is not responsible for the redistribution of TD Cowen research by third
party aggregators. Selected research reports are available in printed form in addition to an electronic form. All published research reports can be obtained on the firm’s client website,
https://tdcowenlibrary.bluematrix.com/client/library.jsp.

THIS RESEARCH REPORT WAS PRODUCED SOLELY BY COWEN AND COMPANY, LLC.

THIS RESEARCH REPORT WAS PREPARED IN ACCORDANCE WITH THE RULES UNDER THE FINANCIAL INDUSTRY REGULATORY AUTHORITY (FINRA). THIS REPORT WAS NOT
PREPARED IN ACCORDANCE WITH CANADIAN DISCLOSURE REQUIREMENTS RELATING TO RESEARCH REPORTS.

The information, opinions, estimates and forecasts are as of the date of this report and subject to change without prior notification. We seek to update our research as appropriate, but
various regulations may prevent us from doing so. Research reports are published at irregular intervals as appropriate in the analyst’s judgement.

Further information on subject securities may be obtained from our offices. This research report is published solely for information purposes, and is not to be construed as an offer
to sell or the solicitation of an offer to buy any security in any state where such an offer or solicitation would be illegal. Other than disclosures relating to Cowen and Company, LLC
and its affiliates, the information herein is based on sources we believe to be reliable but is not guaranteed by us and does not purport to be a complete statement or summary of the
available data. Any opinions expressed herein are statements of our judgment on this date and are subject to change without notice. The opinions and recommendations herein do
not take into account individual client circumstances, objectives or needs and are not intended as recommendations of investment strategy. The recipients of this report must make
their own independent decisions regarding any securities subject to this research report. In some cases, securities and other financial instruments may be difficult to value or sell and
reliable information about the value or risks related to the security or financial instrument may be difficult to obtain. To the extent that this report discusses any legal proceedings or
issues, it has not been prepared to express or intended to express any legal conclusion, opinion or advice. Our salespeople, traders and other professionals may provide oral or written
market commentary or trading strategies to our clients that reflect opinions that are contrary to the opinions expressed in our research. Our principal trading area and investing
businesses may make investment decisions that are inconsistent with recommendations or views expressed in our research.
For important disclosures regarding the companies that are the subject of this research report, please contact Compliance Department, Cowen and Company, LLC, 599 Lexington
Avenue, 20th Floor, New York, NY 10022. In addition, the same important disclosures, with the exception of the valuation methods and risks, are available on the Firm's disclosure
website at https://tdcowen.bluematrix.com/sellside/Disclosures.action.

Equity Research Price Targets: Cowen and Company, LLC assigns price targets on all companies covered in equity research unless noted otherwise. The equity research price target
for an issuer's stock represents the value that the analyst reasonably expects the stock to reach over a performance period of twelve months. Any price targets in equity securities
in this report should be considered in the context of all prior published Cowen and Company, LLC equity research reports (including the disclosures in any such equity report or on
the Firm's disclosure website), which may or may not include equity research price targets, as well as developments relating to the issuer, its industry and the financial markets. For
equity research price target valuation methodology and risks associated with the achievement of any given equity research price target, please see the analyst's equity research report
publishing such targets.

TD Cowen Cross-Asset Research: Due to the nature of the fixed income market, the issuers or debt securities of the issuers discussed in “TD Cowen Cross-Asset Research” reports do
not assign ratings and price targets and may not be continuously followed. Accordingly, investors must regard such branded reports as providing stand-alone analysis and reflecting
the analyst’s opinion as of the date of the report and should not expect continuing analysis or additional reports relating to such issuers or debt securities of the issuers.

From time to time “TD Cowen Cross-Asset Research” analysts provide investment recommendations on securities that are the subject of this report. These recommendations are
intended only as of the time and date of publication and only within the parameters specified in each individual report. “TD Cowen Cross-Asset Research” investment recommendations
are made strictly on a case-by-case basis, and no recommendation is provided as part of an overarching rating system or other set of consistently applied benchmarks. The views
expressed in "Cross-Asset Research" report may differ from the views offered in the firm’s equity research reports prepared for our clients.

8 TDCOWEN.COM
TD COWEN Tapestry
EQUITY RESEARCH February 8, 2024

Notice Related To Branding: “TD Cowen” is a division of TD Securities and is the name under which Cowen and Company, LLC and certain entities that fall under the brand TD Securities
conduct certain of its businesses.

“TD Securities” is a trademark of The Toronto-Dominion Bank and represents certain investment banking, capital markets and wholesale banking activities conducted through certain
subsidiaries and branches of The Toronto-Dominion Bank. Cowen and Company, LLC is a wholly-owned, indirect subsidiary of The Toronto-Dominion Bank. TD Securities Inc. is
regulated by the Investment Industry Regulatory Organization of Canada, a member of the Canadian Investor Protection Fund and a member of Canadian Marketplaces. This material is
for general informational purposes only and is not investment advice nor does it constitute an offer, recommendation or solicitation to buy or sell a particular financial instrument.

Notice to UK and European Union Investors: This publication is produced and published by Cowen and Company, LLC which is regulated in the United States by Financial Industry
Regulatory Authority. Cowen and Company's principal trading area and investing businesses may make investment decisions that are inconsistent with recommendations or views
expressed in our research. Cowen and Company, LLC maintains physical, electronic and procedural information barriers to address the flow of information between and among
departments within Cowen and Company, LLC, as well as its affiliates. Additionally, the persons who are not involved with the production of the recommendation but are reasonably
expected to have access to the recommendation prior to its completion are subject to policies and procedures preventing them to trade related to expected recommendation. Research
department related policies are designed to prevent, monitor, surveil and avoid appearance of conflicts of interest with respect to the persons or associated persons involved in
the production of the recommendation. This research report is to be communicated only to persons of a kind described in Articles 19 and 49 of the Financial Services and Markets
Act 2000 (Financial Promotion) Order 2005. It must not be further transmitted to any other person without our consent. The Toronto-Dominion Bank and TD Bank Europe Limited
("TDBEL") are regulated for investment business conducted in the UK by the UK Financial Conduct Authority. TD Global Finance unlimited company is regulated for investment business
conducted in Ireland by the Central Bank of Ireland. Cowen Execution Services Limited is authorised and regulated in the UK by the Financial Conduct Authority.

This document it is intended only to be issued to persons who (i) are persons falling within Article 19(5) ("Investment professional") of the Financial Services and Markets Act 2000
(Financial Promotion) Order 2005 (as amended, the "Financial Promotion Order"), (ii) are persons falling within Article 49(2)(a) to (d) ("High net worth companies, unincorporated
associations, etc.") of the Financial Promotion Order, or (iii) are persons to whom an invitation or inducement to engage in investment activity (within the meaning of section 21 of the
Financial Services and Markets Act 2000) in connection with the issue or sale of any securities may otherwise lawfully be communicated or caused to be communicated. Insofar as the
document is issued in or to the European Union, it is intended only to be issued to persons categorized as 'Per Se Professional' or 'Eligible Counterparties' as defined in S.I. No 375 of
2017, European Union (Markets in Financial Instruments) Regulations 2017, Schedule 2. Clients in the United Kingdom wishing to effect transactions in any security discussed herein
should do so through a qualified salesperson of TDBEL. European clients wishing to effect transactions in any security discussed herein should do so through a qualified salesperson of
TD Global Finance unlimited company. Article 20 Market Abuse Regulation 596/2014 ("MAR") requires market participants who produce or disseminate Investment Recommendations
or other information recommending or suggesting an investment strategy to take reasonable care that such information is objectively presented, and to disclose their interests or
indicate conflicts of interest.

Australia

If you receive this document and you are domiciled in Australia, please note that it is intended to be issued for general information purposes only and distributed to a person who is a
wholesale client, as defined in the Corporations Act 2001 and Corporations Regulations 2001, by Toronto Dominion (South East Asia) Limited ("TDSEA"). TDSEA does not hold itself out
to be providing financial advice in these circumstances. TD Securities is a trademark and represents certain investment dealing and advisory activities of The Toronto-Dominion Bank
and its subsidiaries, including TDSEA. The Toronto-Dominion Bank is not an authorized deposit-taking or financial services institution in Australia. TDSEA is a holder of an Australian
Financial Services License (528885) and is regulated in Australia by the Australian Securities and Investments Commission.

Canada

No securities commission or similar regulatory authority in Canada has reviewed or in any way passed judgment upon this research report, the information contained herein or the
merits of the securities described herein, and any representation to the contrary is an offence. Cowen and Company, LLC operates as a dealer in Canada under an exemption from the
dealer registration requirements contained in National Instrument 31-103 – Registration Requirements and Exemptions (NI 31-103) and, as such, Cowen and Company, LLC is not
required to be and is not a registered dealer in Canada. Canadian clients wishing to effect transactions in any security discussed herein should do so through a qualified salesperson of
TD Securities or TD Securities Inc. TD Securities Inc. is a member of the Canadian Investor Protection Fund.

China, India, and South Korea

Insofar as the document is received by any persons in the People's Republic of China (“PRC”), India and South Korea, it is intended only to be issued to persons who have the relevant
qualifications to engage in the investment activity mentioned in this document. The recipient is responsible for obtaining all relevant government regulatory approvals/licenses
themselves, and represents and warrants to The Toronto-Dominion Bank that the recipient's investments in those securities do not violate any law or regulation, including, but not
limited to, any relevant foreign exchange regulations and/or overseas investment regulations. The Toronto-Dominion Bank has a representative office in Shanghai, Mumbai and Seoul
which should be contacted for any general enquiry related to The Toronto-Dominion Bank or its business. However, neither any of the Toronto-Dominion Bank offshore branches/
subsidiaries nor its representative offices are permitted to conduct business within the borders of the PRC, India and South Korea. In locations in Asia where the Bank does not hold
licenses to conduct business in financial services, it is not our intention to, and the information contained in this document should not be construed as, conducting any regulated
financial activity, including dealing in, or the provision of advice in relation to, any regulated instrument or product. This publication is for general information only, without addressing
any particular needs of any individual or entity, and should not be relied upon without obtaining specific advice in the context of specific circumstances.

Hong Kong SAR (China)

This document, which is intended to be issued in Hong Kong SAR (China) ("Hong Kong") only to Professional Investors within the meaning of the Securities and Futures Ordinance (the
"SFO") and the Securities and Futures (Professional Investor) Rules made under the SFO, has been distributed through Toronto-Dominion Bank, Hong Kong Branch, which is regulated
by the Hong Kong Monetary Authority and the Securities and Futures Commission.

Japan

For Japanese residents, please note that if you have received this document from The Toronto-Dominion Bank entities based outside Japan, it is being provided to qualified financial
institutions (“QFI”) only under a relevant exemption to the Financial Instruments and Exchange Act.

If you have received this document from TD Securities (Japan) Co., Ltd., it is being provided only to institutional investors. TD Securities (Japan) Co., Ltd. is regulated by the Financial
Services Agency of Japan and is distributing this document in Japan as a Type 1 Financial Instruments Business Operator registered with the Kanto Local Finance Bureau under
registration number, Kinsho 2992, and a member of Japan Securities Dealers Association.

New Zealand

The Toronto-Dominion Bank is not a “registered bank” in New Zealand under the Reserve Bank Act 1989.

Singapore

TDCOWEN.COM 9
TD COWEN Tapestry
EQUITY RESEARCH February 8, 2024

This report is distributed in Singapore by The Toronto-Dominion Bank, Singapore Branch, and recipients in Singapore of this report are to contact The Toronto-Dominion Bank,
Singapore Branch in respect of any matters arising from, or in connection with, this report. The Toronto-Dominion Bank, Singapore Branch is regulated by the Monetary Authority
of Singapore. Where this report is issued or promulgated in Singapore, it is only intended for distribution to a person who is an accredited investor, expert investor or institutional
investor as defined in the Securities and Futures Act (Cap. 289), the Securities and Futures (Prescribed Specific Classes of Investors) Regulations 2005, or the Securities and Futures
(Classes of Investors) Regulations 2018 issued by the Monetary Authority of Singapore.

Additional Notice to European Union Investors: Individuals producing recommendations are required to obtain certain licenses by the Financial Regulatory Authority (FINRA). You can
review the author’s current licensing status and history, employment history and, if any, reported regulatory, customer dispute, criminal and other matters via “Brokercheck by FINRA”
at http://brokercheck.finra.org/. An individual’s licensing status with FINRA should not be construed as an endorsement by FINRA. General biographical information is also available for
each Research Analyst at www.tdcowen.com.

Additionally, the complete preceding 12-month recommendations history related to recommendation in this research report is available at https://tdcowen.bluematrix.com/sellside/
Disclosures.action

The recommendation contained in this report was produced at February 8, 2024, 17:02ET. and disseminated at February 8, 2024, 17:02ET.
Copyright, User Agreement and other general information related to this report
© 2024 Cowen and Company, LLC. All rights reserved. Member NYSE, FINRA and SIPC. This research report is prepared for the exclusive use of TD Cowen clients and may not be
reproduced, displayed, modified, distributed, transmitted or disclosed, in whole or in part, or in any form or manner, to others outside your organization without the express prior
written consent of TD Cowen. TD Cowen research reports are distributed simultaneously to all clients eligible to receive such research reports. Any unauthorized use or disclosure is
prohibited. Receipt and/or review of this research constitutes your agreement not to reproduce, display, modify, distribute, transmit, or disclose to others outside your organization.
All TD Cowen trademarks displayed in this report are owned by TD Cowen and may not be used without its prior written consent.

Cowen and Company, LLC. New York 646 562 1010 Boston 617 946 3700 San Francisco 415 646 7200 Chicago 312 577 2240 Cleveland 440 331 3531 Atlanta 866 544 7009
Stamford 646 616 3000 Washington, D.C. 202 868 5300 London (affiliate) 44 207 071 7500

TD COWEN EQUITY RESEARCH RATING DEFINITIONS

Outperform (1): The stock is expected to achieve a total positive return of at least 15% over the next 12 months

Market Perform (2): The stock is expected to have a total return that falls between the parameters of an Outperform and Underperform over the next 12 months

Underperform (3): Stock is expected to achieve a total negative return of at least 10% over the next 12 months

Assumption: The expected total return calculation includes anticipated dividend yield

TD Cowen Equity Research Rating Distribution

Distribution of Ratings/Investment Banking Services (IB) as of 12/31/23
Rating Count Ratings Distribution Count IB Services/Past 12 Months
Buy (a) 623 65.86% 189 30.34%
Hold (b) 315 33.30% 52 16.51%
Sell (c) 8 0.85% 1 12.50%
(a) Corresponds to "Outperform" rated stocks as defined in Cowen and Company, LLC's equity research rating definitions. (b) Corresponds to "Market Perform" as defined in Cowen
and Company, LLC's equity research ratings definitions. (c) Corresponds to "Underperform" as defined in Cowen and Company, LLC's equity research ratings definitions. Cowen and
Company Equity Research Rating Distribution Table does not include any company for which the equity research rating is currently suspended or any debt security followed by TD
Cowen Cross-Asset Research.

Note: "Buy", "Hold" and "Sell" are not terms that Cowen and Company, LLC uses in its ratings system and should not be construed as investment options. Rather, these ratings terms
are used illustratively to comply with FINRA regulation.

Costco Wholesale Rating History as of 02/07/2024

powered by: BlueMatrix
(1):$410.00 (1):$440.00 (1):$520.00 (1):$630.00 (1):$650.00 (1):$600.00 (1):$680.00 (1):$700.00
09/02/20 05/28/21 10/07/21 01/06/22 02/09/22 01/23/23 09/27/23 12/18/23
800

700

600

500

400

300
Apr 21 Jul 21 Oct 21 Jan 22 Apr 22 Jul 22 Oct 22 Jan 23 Apr 23 Jul 23 Oct 23 Jan 24

Closing Price Target Price

10 TDCOWEN.COM
TD COWEN Tapestry
EQUITY RESEARCH February 8, 2024

Capri Holdings Rating History as of 02/07/2024

powered by: BlueMatrix
(2):$40.00 (2):$57.00 (1):$75.00 (1):$80.00 (1):$70.00 (2):$55.00 (2):$40.00 (2):$57.00
02/03/21 05/28/21 08/04/21 11/08/21 06/01/22 02/13/23 05/31/23 11/09/23
90

80

70

60

50

40

30
Apr 21 Jul 21 Oct 21 Jan 22 Apr 22 Jul 22 Oct 22 Jan 23 Apr 23 Jul 23 Oct 23 Jan 24

Closing Price Target Price

Tapestry Rating History as of 02/07/2024

powered by: BlueMatrix
(1):$42.00 (1):$46.00 (1):$50.00 (1):$52.00 (1):$56.00 (1):$40.00 (1):$46.00 (1):$55.00 (1):$40.00
01/28/21 03/11/21 04/26/21 05/06/21 11/11/21 05/12/22 08/18/22 02/10/23 11/09/23
60
55
50
45
40
35
30
25
Apr 21 Jul 21 Oct 21 Jan 22 Apr 22 Jul 22 Oct 22 Jan 23 Apr 23 Jul 23 Oct 23 Jan 24

Closing Price Target Price

Ulta Beauty Rating History as of 02/07/2024

powered by: BlueMatrix
(1):$300.00 (1):$375.00 (1):$385.00 (1):$490.00 (1):$440.00 (1):$480.00 (1):$503.00 (1):$570.00 (1):$530.00 (1):$531.00 (1):$570.00 (1):$580.00
12/03/20 03/12/21 06/07/21 08/26/21 10/20/21 03/11/22 08/26/22 02/16/23 05/26/23 10/25/23 12/01/23 01/31/24
600
550
500
450
400
350
300
250
Apr 21 Jul 21 Oct 21 Jan 22 Apr 22 Jul 22 Oct 22 Jan 23 Apr 23 Jul 23 Oct 23 Jan 24

Closing Price Target Price

TDCOWEN.COM 11
TD COWEN Tapestry
EQUITY RESEARCH February 8, 2024

Walmart Rating History as of 02/07/2024

powered by: BlueMatrix
(1):$170.00 (1):$175.00 (1):$165.00 (1):$180.00 (1):$150.00 (1):$165.00 (1):$175.00 (1):$180.00 (1):$185.00 (1):$188.00
11/17/20 08/17/21 02/14/22 05/06/22 07/26/22 08/16/22 11/15/22 02/15/23 08/18/23 11/16/23
190
180
170
160
150
140
130
120
110
Apr 21 Jul 21 Oct 21 Jan 22 Apr 22 Jul 22 Oct 22 Jan 23 Apr 23 Jul 23 Oct 23 Jan 24

Closing Price Target Price

Legend for Price Chart:

I = Initiation | 1 = Outperform | 2 = Market Perform | 3 = Underperform | UR = Price Target Under Review | D = Discontinued Coverage | $xx = Price Target | NA = Not Available |
S=Suspended

12 TDCOWEN.COM
TD COWEN Tapestry
EQUITY RESEARCH February 8, 2024

POINTS OF CONTACT

Analyst Profiles

Oliver Chen, CFA Katy Hallberg Tom Nass, CFA

New York New York New York
646 562 1424 646 562 1321 646 562 1316
oliver.chen@cowen.com katy.hallberg@cowen.com thomas.nass@cowen.com

Oliver Chen is an II-ranked analyst covering Katy Hallberg is an associate on the Tom Nass is an associate on the specialty
retailing/specialty, broadlines, department specialty retail & broadlines/department retail & broadlines/department stores
stores, & luxury goods. He has an MBA from stores team. She joined TD Cowen in 2021. team. He joined TD Cowen in 2022.
Wharton.

Neil Goh
New York
646 562 1322
neil.goh@cowen.com

Neil Goh is an associate on the specialty

retail & broadlines/department stores
team. He joined TD Cowen in 2023 from
Morgan Stanley.

Reaching TD Cowen

Main Cowen and Company Locations

New York Boston Cleveland San Francisco

599 Lexington Avenue Two International Place 20006 Detroit Road One Maritime Plaza, 9th Floor
New York, NY 10022 Boston, MA 02110 Suite 100 San Francisco, CA 94111
646 562 1010 617 946 3700 Rocky River, OH 44116 415 646 7200
800 221 5616 800 343 7068 440 331 3531 800 858 9316
Atlanta Chicago Stamford Washington, D.C.
3424 Peachtree Road NE 181 West Madison Street 262 Harbor Drive 2900 K Street, NW
Suite 2200 Suite 3135 Stamford, CT 06902 Suite 520
Atlanta, GA 30326 Chicago, IL 60602 646 616 3000 Washington, DC 20007
866 544 7009 312 577 2240 202 868 5300

International Location

Cowen Execution Services Limited

London
1 Snowden Street - 11th Floor
London EC2A 2DQ
United Kingdom
44 20 7071 7500

@TDCOWENRESEARCH TD COWEN TD COWEN

TDCOWEN.COM 13