Financial Data and Key Metrics Changes - The company reported a pro forma revenue increase of 16%, adjusted operating margin expansion of 200 basis points, and earnings per share growth of 35% compared to the previous year, all exceeding expectations [4][19][24] - The first-quarter gross margin was 76.5%, reflecting a 120 basis point increase year-over-year, driven by operational improvements and the divestiture of Stuart Weitzman [22][23] Business Line Data and Key Metrics Changes - Coach brand revenue increased by 21%, with North America growing by 26%, China by 21%, and Europe by 39%, indicating strong performance across key markets [6][7][19] - Kate Spade's revenue trends improved sequentially, with a decline of 9% in the first quarter, showing signs of progress in the turnaround efforts [12][13] Market Data and Key Metrics Changes - North America sales accelerated by 18%, Europe revenue grew by 32%, and Greater China revenue increased by 19%, showcasing strong global momentum [19][20] - In Japan, sales declined by 10%, reflecting a challenging consumer environment [21] Company Strategy and Development Direction - The company is focused on its Amplify Growth agenda, emphasizing emotional connections with consumers and targeting Gen Z for customer acquisition [4][5] - The strategy includes product innovation, enhancing direct-to-consumer channels, and creating immersive retail experiences [11][12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the sustainability of growth, citing structural advantages and a strong pipeline of innovation [36][39] - The company raised its fiscal 2026 outlook, expecting revenue of approximately $7.3 billion, representing pro forma growth of 7%-8% [27][28] Other Important Information - The company declared a quarterly cash dividend of $0.40 per share and plans to return $1.3 billion to shareholders through dividends and share repurchases [24][25] - Inventory levels were reported to be 1% below the prior year, indicating effective inventory management [26] Q&A Session Summary Question: Drivers of accelerated growth and sustainability - Management highlighted structural advantages and a focus on new customer acquisition, particularly among Gen Z, as key drivers of growth [35][36] Question: Breakdown of Coach's revenue growth - The growth was attributed to significant customer acquisition, increased average unit retail (AUR), and geographic expansion [40][41] Question: Gross margin expectations - Management confirmed that gross margin guidance remains unchanged, with ongoing progress against tariff impacts [44][46] Question: European market dynamics - The company noted a positive inflection in Europe, driven by effective marketing and customer acquisition strategies [49][50] Question: Kate Spade's merchandise margin progress - Management acknowledged the impact of tariffs and ongoing investments in customer engagement as factors affecting margins [51][52]

Core Insights - Tapestry reported quarterly earnings of $1.38 per share, exceeding the Zacks Consensus Estimate of $1.25 per share, and showing an increase from $1.02 per share a year ago, resulting in an earnings surprise of +10.40% [1] - The company achieved revenues of $1.7 billion for the quarter ended September 2025, surpassing the Zacks Consensus Estimate by 3.92% and up from $1.51 billion year-over-year [2] - Tapestry's stock has increased by approximately 67.3% since the beginning of the year, significantly outperforming the S&P 500's gain of 15.6% [3] Earnings Outlook - The future performance of Tapestry's stock will largely depend on management's commentary during the earnings call and the company's earnings outlook [3][4] - The current consensus EPS estimate for the upcoming quarter is $2.16 on revenues of $2.24 billion, and for the current fiscal year, it is $5.48 on revenues of $7.23 billion [7] Industry Context - The Retail - Apparel and Shoes industry, to which Tapestry belongs, is currently ranked in the top 22% of over 250 Zacks industries, indicating a favorable outlook for the sector [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked using tools like the Zacks Rank [5][6]

This presentation contains certain "forward -looking statements" based on management's current expectations. Forward -looking stat ements include, but are not limited to, the statements under "Financial Outlook," statements regarding long term performance, statements regarding the Company's capital deployment plans, including anticipated annual dividend rates and share repurchase plans, and statements that can be identified by the use of forward -looking terminology such as "may," "can," "if," "continue," " ...

Core Insights - Tapestry reported an increase in first-quarter sales and profit, indicating strong performance [1] - The company raised its full-year outlook, reflecting confidence in future growth [1] - The Coach brand is successfully attracting Gen Z customers, which is a key demographic for the company's growth strategy [1] Financial Performance - First-quarter sales and profit were higher compared to previous periods, showcasing robust financial health [1] - The raised full-year outlook suggests an optimistic forecast for revenue and earnings growth [1] Market Trends - The appeal of the Coach brand to Gen Z customers highlights a shift in consumer preferences and market dynamics [1] - This demographic focus may drive future marketing and product development strategies for Tapestry [1]

Tapestry's efforts to protect margins against tariffs, a leaner Kate Spade product line and strong Gen-Z demand for Coach's Tabby handbags helped the company lift its annual profit and sales targets o... ...

Core Insights - Tapestry Inc. is experiencing strong growth, with fiscal first-quarter sales increasing 16% to $1.7 billion, driven primarily by a 22% increase in Coach sales to $1.4 billion, despite a decline in Kate Spade sales by 8% to $260.2 million [1][3] Group 1: Financial Performance - Adjusted operating income rose 24.2% to $354 million, with operating margins improving to 20.9% from 18.9% a year earlier, partly due to the sale of the Weitzman business [3] - Net profits reached $274.8 million, and adjusted earnings per share were $1.38, exceeding analysts' expectations of $1.26 [3] - Tapestry anticipates a sales increase of 7% to 8% for the fiscal year, projecting total sales of $7.3 billion, and has raised its earnings per share guidance to $5.45 to $5.60 from a previous range of $5.30 to $5.45 [9] Group 2: Strategic Vision and Market Focus - The company aims to grow Coach into a $10 billion business by expanding its target audience beyond previous customers [4] - Tapestry has successfully acquired 2.2 million new shoppers in the last quarter, with Gen Z consumers making up approximately 35% of this growth [6] - The company has increased its marketing investment to 11% of sales in the first quarter, up from 4% in fiscal 2019, indicating a commitment to understanding and engaging consumers [8][9] Group 3: Leadership Insights - CEO Joanne Crevoiserat emphasized that new customer acquisition, particularly among younger consumers, is a key driver of growth [2][5] - The company is focused on understanding consumer behavior and preferences, allowing for more effective marketing strategies [7] - CFO Scott Roe highlighted the transformation of the business model and the positive impact of marketing investments on profitability and cash flow [9]

Financial Performance - Net sales for the first quarter of fiscal 2026 were $1,704.6 million, a 13.1% increase from $1,507.5 million in the first quarter of fiscal 2025[180]. - Gross profit increased to $1,300.5 million, representing 76.3% of net sales, compared to 75.3% in the prior year[180]. - Operating income rose by 30.2% to $328.2 million, up from $252.0 million in the same quarter last year[180]. - Net income for the first quarter of fiscal 2026 was $274.8 million, a 47.2% increase from $186.6 million in the first quarter of fiscal 2025[180]. - In the first quarter of fiscal 2026, total net sales increased by 13.1% or $197.1 million to $1.70 billion compared to the same period in fiscal 2025[191]. - Coach's net sales rose by 22.1% or $259.2 million to $1.43 billion, driven by a $222.7 million increase in DTC sales[192]. - Kate Spade's net sales decreased by 8.1% or $23.0 million to $260.2 million, primarily due to a $28.1 million decline in DTC sales[192]. - Gross profit increased by 14.6% or $165.6 million to $1.30 billion, with a gross margin of 76.3%, up 100 basis points from the previous year[193]. - Operating income increased by $76.2 million to $328.2 million in Q1 fiscal 2026, with an operating margin of 19.3%, up from 16.7% in Q1 fiscal 2025[200]. - Coach's operating income rose by $100.8 million to $487.4 million, with an operating margin of 34.1%, compared to 33.0% in the prior year[202]. - Kate Spade's operating income decreased by $21.4 million to $5.6 million, resulting in an operating margin drop to 2.1% from 9.6%[202]. - Net income increased by 47.2% or $88.2 million to $274.8 million in Q1 fiscal 2026, with net income per diluted share rising to $1.28 from $0.79[205][206]. Divestitures and Acquisitions - The Company divested the Stuart Weitzman business for $105.0 million, completed on August 4, 2025[164]. - The Company incurred total pre-tax charges of $14.7 million related to the Stuart Weitzman divestiture, impacting operating income[186]. - The divestiture of Stuart Weitzman resulted in net sales of $14.6 million and an operating loss of $1.0 million for the first quarter of fiscal 2026[190]. - Excluding the impact of the Stuart Weitzman business, net sales increased by 15.5% or $225.6 million[191]. - The Company completed the divestiture of the Stuart Weitzman Business for total cash consideration of $105.0 million on August 4, 2025[229]. Expenses and Charges - SG&A expenses rose by 10.1% or $89.4 million to $972.3 million, but as a percentage of net sales, they decreased to 57.0% from 58.6%[197]. - Organizational efficiency costs accounted for pre-tax charges of $11.0 million, primarily due to technology and severance costs[186]. - The Company recorded impairment charges of $244.1 million related to goodwill and $610.7 million related to brand intangibles for the Kate Spade reporting unit during fiscal 2025[237]. Cash Flow and Debt - Net cash provided by operating activities decreased by $6.9 million to $112.6 million, primarily due to changes in operating assets and liabilities[216]. - Net cash provided by investing activities was $69.3 million, a decrease of $120.8 million compared to $190.1 million in Q1 fiscal 2025[215]. - Net cash used in financing activities increased to $550.8 million from $74.5 million, primarily due to stock repurchases of $698.2 million[219][220]. - Total debt increased slightly by $0.7 million, with long-term debt at $2,378.6 million and current debt at $256.8 million[223]. - As of September 27, 2025, cash and cash equivalents decreased by $380.5 million to $719.5 million compared to $1,100.0 million on June 28, 2025[223]. - The Company has a total availability of $2.00 billion under its Amended Revolving Credit Facility and Commercial Paper Program, with $240.0 million currently outstanding[224]. - The Company issued notes under the Commercial Paper Program with a weighted average interest rate of 4.260%, totaling $240.0 million outstanding as of September 27, 2025[228]. Market Conditions and Strategy - The macroeconomic environment remains challenging, with ongoing geopolitical instability and trade tensions affecting consumer spending patterns[171]. - The Company aims to drive new customer acquisition focusing on Gen Z consumers and expand its lifestyle offerings in footwear[163]. - Management believes that cash flows from operations and access to credit markets will support operating and capital requirements for fiscal 2026 and beyond[226]. Tax and Corporate Expenses - The effective tax rate decreased to 13.8% in Q1 fiscal 2026 from 17.3% in Q1 fiscal 2025, attributed to excess tax windfall related to share-based compensation[204]. - Corporate operating expenses increased by 6.3% or $9.6 million to $163.8 million, driven by higher professional fees and compensation costs[202]. - Other income decreased by $1.1 million to $3.3 million, primarily due to a decrease in foreign exchange gains[203]. Capital Expenditures and Stock Repurchase - Capital expenditures for the first quarter of fiscal 2026 were $38.0 million, with an expectation of approximately $200.0 million for the full fiscal year[231]. - The Company repurchased $500.0 million of common stock during the three months ended September 27, 2025, with $2.74 billion remaining under the 2026 Share Repurchase Program[233].

• Delivered Revenue of $1.7 Billion, an Increase of 13% Versus Prior Year (+12% Constant Currency) • Achieved Pro Forma Revenue Growth of 16% Led by a 22% (+21% Constant Currency) Gain at the Coach Brand • Drove Operating Margin Expansion of 260 Basis Points on a GAAP Basis and 200 Basis Points on a Non-GAAP Basis Fueled by a Gross Margin Increase and SG&A Leverage • Achieved GAAP Diluted EPS of $1.28, up 61% Versus Prior Year, and Non-GAAP Diluted EPS of $1.38, an Increase of 35% Versus Prior Year • Expect ...

Core Insights - Tapestry, Inc. reported record first quarter revenue and earnings per share (EPS) for fiscal 2026, exceeding expectations and prompting an increase in the full-year outlook [1][3][5] Financial Performance - Net sales reached $1.704 billion, a 13% increase from the previous year, with a 12% increase on a constant currency basis [4][5] - Pro forma net sales, excluding Stuart Weitzman, totaled $1.690 billion, reflecting a 16% growth [4][7] - Gross profit was $1.301 billion, with a gross margin of 76.3%, up from 75.3% in the prior year [4][13] - Operating income increased by 30% to $328 million, with an operating margin of 19.3% [4][13] - GAAP diluted EPS rose 61% to $1.28, while non-GAAP diluted EPS increased by 35% to $1.38 [5][6] Brand Performance - The Coach brand led growth with a 22% increase in revenue, while Kate Spade experienced an 8% decline [7][32] - North America saw an 18% increase in sales, with Europe achieving a 39% growth [8][7] Strategic Initiatives - Tapestry's Amplify Growth Strategy focuses on building emotional connections with consumers, fueling fashion innovation, delivering compelling experiences, and empowering employees [8] - The company acquired over 2.2 million new customers, with approximately 35% being Gen Z consumers [8] Shareholder Returns - Tapestry plans to return $1.3 billion to shareholders in fiscal 2026 through dividends and share repurchases [5][9] - The quarterly cash dividend declared is $0.40 per share, with an annual dividend expectation of $1.60 per share [12] Financial Outlook - The company raised its fiscal 2026 revenue and earnings outlook, anticipating revenue of approximately $7.3 billion, representing 4% to 5% growth [16][18] - Expected adjusted free cash flow for fiscal 2026 is $1.3 billion, with a net interest expense of approximately $65 million [16][18]

Core Insights - The article highlights the strong performance of certain stocks during the last two months of the year, particularly in November and December, which are historically the best months for the S&P 500 [1][2][3]. Performance Analysis - Twelve stocks, including Broadcom, Tapestry, and Howmet Aerospace, have consistently outperformed the S&P 500 in the November-December period over the last five years, with an average gain of 11.4% or higher, compared to the S&P 500's average gain of 6.7% [1][2]. - The S&P 500 has recorded an average price increase of 3.1% in November and a 1.4% increase in December since 1945, with a frequency of advance (FoA) of 76% [2][4]. Notable Stocks - Broadcom has been identified as the top performer, with an average gain of 27.7% in the final two months of the year since 2020, including a nearly 37% increase last year when the S&P 500 fell [5][10]. - Tapestry has shown an average gain of 27% during the same period, with a notable 20% increase in 2022 [7][10]. - Howmet Aerospace has averaged a gain of 23.2% in the last two months of the year, with analysts projecting a 36% rise in EPS this year [8][10]. Analyst Outlook - Analysts are optimistic about Broadcom, forecasting a 39% EPS growth in 2025, despite the stock being extended from its 200-day moving average [6]. - Tapestry is expected to see an 8% EPS growth this year, while Howmet Aerospace is projected to have a stable growth trajectory [7][8].