Tapestry's Triple Treat: Strong Q2 Results, Upbeat Guidance, And Surging Stock

Core Insights - Tapestry has experienced significant stock growth, with shares more than doubling since January 2024, outperforming the S&P 500's 27% gain [2] - The company reported steady Q2 revenue of $2.2 billion, with a 10% year-over-year increase in Coach sales, while Kate Spade and Stuart Weitzman saw declines [3] - Tapestry has revised its fiscal 2025 guidance, expecting EPS between $4.85 and $4.90 and full-year revenue of $6.85 billion, reflecting a 3% year-over-year increase [4] Financial Performance - Tapestry's Q2 results included a record non-GAAP diluted EPS of $1.02, marking a 10% year-over-year increase, and a gross margin expansion of 280 basis points to 74.5% [3] - The company added over 2.7 million new customers in North America, primarily from Gen Z and Millennial demographics [3] - Projected revenues for fiscal 2024 are expected to reach $6.9 billion, reflecting a 4% year-over-year increase, with EPS forecasted at $4.85 [7] Market Position and Outlook - Tapestry's Coach brand is poised to benefit from China's economic expansion, with the luxury market in China projected to reach $178 billion by 2025 [5] - The company has a limited manufacturing footprint in China, which minimizes the impact of a new 10% tariff on Chinese imports [4] - Tapestry's stock has shown volatility over the past four years, with notable returns of 83% in 2024 [6]