Tapestry, Inc. (NYSE: TPR), the parent company of renowned accessory and lifestyle brands including Coach, Kate Spade, and Stuart Weitzman, has announced its fiscal third quarter results for the period ending March 29, 2025. The company reported robust growth in both revenue and earnings, leading to an optimistic revision of its full-year outlook.

1. Highlights from Q3 Fiscal 2025

CEO Joanne Crevoiserat expressed confidence in the company’s performance, stating, “Our third quarter outperformance reinforces our position of strength. We accelerated top and bottom-line growth and raised our outlook for the fiscal year, demonstrating the power of brand building and our connections with consumers around the world.”

Strategic and Financial Achievements

Tapestry made significant strides in executing its strategic priorities over the past quarter, marked by several key accomplishments:

Build Lasting Customer Relationships

Acquisition of New Customers: Tapestry acquired over 1.2 million new customers in North America, with a notable increase in Gen Z and Millennial consumers making up approximately two-thirds of this growth.

Power Global Growth

Revenue Growth: The company achieved an 8% increase in revenue compared to the previous year on a constant currency basis. This growth was notably driven by North America (+9%), Europe (+35%), and a total of 4% in the Asia-Pacific region. Coach led the way with a 15% growth in constant currency revenue.

Earnings Per Share: Diluted earnings per share (EPS) grew by 27% to $1.03 on a non-GAAP basis, exceeding the company’s expectations by over $0.15.

Deliver Compelling Omni-Channel Experiences

Direct-to-Consumer Revenue: There was a 9% increase in direct-to-consumer revenue on a constant currency basis, with digital revenue showing mid-teens growth and global brick-and-mortar sales up by mid-single digits.

Fuel Fashion Innovation and Product Excellence

Product Performance: Coach saw strong handbag revenue growth and a mid-teens percentage increase in Average Unit Retail (AUR), underpinned by effective product innovation.

Margin Expansion: Gross and non-GAAP operating margins expanded by 140 basis points, attributed to operational discipline and increased investments in brand marketing.

Shareholder Returns

In light of Tapestry’s impressive operational results, the company is committed to returning over $2 billion or more than 100% of its adjusted free cash flow to shareholders through dividends and share repurchases:

Quarterly Dividend: The Board of Directors declared a cash dividend of $0.35 per common share, payable on June 23, 2025, to shareholders on record as of June 6, 2025. The company expects to maintain an annual dividend rate of $1.40 per common share.

Share Repurchases: Tapestry is continuing its $2 billion Accelerated Share Repurchase program, with $800 million remaining under its previous share repurchase authorization.

2. Overview of Financial Results

Net Sales: Totaling $1.58 billion, representing a 7% growth year-over-year or 8% on a constant currency basis.

Gross Profit: Reached $1.21 billion with a gross margin of 76.1%, reflecting operational improvements.

Operating Income: Was reported at $254 million on a GAAP basis, with a 16.0% operating margin.

Net Income: The company reported net income of $203 million, translating to $0.95 per diluted share on a GAAP basis.

Balance Sheet and Cash Flow

Tapestry’s financial health remains strong, with cash, cash equivalents, and short-term investments totaling $1.1 billion and net debt standing at $1.6 billion. The company’s leverage ratio is at 1.6x, underscoring its ability to manage debt effectively.

3. Revised Financial Outlook

Tapestry has raised its fiscal 2025 outlook to reflect its strong performance:

Revenue: Expected to reach approximately $6.95 billion, up from prior guidance of 4% growth.

Earnings per Share: Projected to be around $5.00, indicating a high-teens percentage growth compared to the prior year.

Adjusted Free Cash Flow: Anticipated at approximately $1.3 billion, an increase from previous guidance.

The outlook factors in anticipated tariffs, foreign currency exchange rates, and excludes transaction costs associated with the pending sale of Stuart Weitzman, expected to close in summer 2025.

Conclusion

Tapestry, Inc. has demonstrated impressive growth and adaptability in a challenging market environment, supported by effective brand strategies and customer engagement. The company’s revised outlook reflects confidence in continued success and commitment to delivering shareholder value. Investors and analysts alike will be keen to track Tapestry's progress as it approaches the end of fiscal 2025.

Original press release