TPR Q3 Earnings Top Estimates, Sales Grow Y/Y, FY25 Outlook Raised

Core Insights - Tapestry, Inc. reported strong third-quarter fiscal 2025 results, exceeding revenue and earnings estimates, with year-over-year growth prompting an increase in fiscal 2025 outlook [1][3][18] Financial Performance - Adjusted earnings were $1.03 per share, surpassing the Zacks Consensus Estimate of 89 cents, and reflecting a 27.2% increase from 81 cents in the prior year [3] - Net sales reached $1,584.6 million, exceeding the consensus estimate of $1,529 million, marking a 6.9% year-over-year increase and 8% growth on a constant-currency basis [3] - Consolidated gross profit was $1.21 billion, up 8.9% year over year, with a gross margin increase of 140 basis points to 76.1% [9] Customer Engagement and Growth - The company acquired over 1.2 million customers in North America, with Gen Z and Millennials making up approximately two-thirds of this new customer base [4] - Direct-to-consumer revenues grew 9% on a constant-currency basis, driven by a mid-teen increase in digital sales [5] Brand Performance - Coach's net sales were $1.29 billion, a 13% year-over-year increase, while Kate Spade's sales were $244.9 million, reflecting a 13% decline [6] - Stuart Weitzman's net sales totaled $46.2 million, marking an 18% year-over-year decrease [7] Regional Sales Insights - North America sales increased 9% year over year to $951.7 million, while European markets saw a 32% increase in revenues to $92.9 million [8] - Sales in Greater China improved 3% to $278.9 million, while Japan experienced an 8% decline [8] Cost and Margin Analysis - Adjusted operating income was $277.3 million, up 15.9% from the previous year, with an adjusted operating margin increase of 140 basis points to 17.5% [10] - Selling, general and administrative expenses totaled $928.5 million, up 7% year over year, remaining flat as a percentage of net sales at 58.6% [11] Future Outlook - Tapestry anticipates mid-single-digit revenue growth for the fiscal fourth quarter, with earnings per share expected to exceed 95 cents [16][17] - The company raised its fiscal 2025 revenue outlook to $6.95 billion, indicating 4% growth from the prior year [18] - Projected earnings per share for fiscal 2025 are forecasted at $5.00, implying high-teens percentage growth from the prior year [20]