Financial Data and Key Metrics Changes - Tapestry achieved $7 billion in revenue for fiscal year 2025, with an operating margin of 20% and adjusted EPS of $5.1, all showing significant growth compared to the previous year [6][27]. - The company reported a 5% revenue growth overall, with Coach specifically growing by 10% [27][28]. - Gross margins increased by 210 basis points, and earnings per share grew by 19% year-over-year [27][28]. Business Line Data and Key Metrics Changes - Coach experienced a 10% increase in revenue, with a 13% constant currency growth in the fourth quarter, driven by double-digit growth in North America (up 16%), China (up 22%), and Europe (up 12%) [12][28]. - Kate Spade's revenue decreased by 13% in the fourth quarter, reflecting ongoing brand reset efforts [20]. - The footwear segment, particularly sneakers, grew in the mid-single digits, indicating a focus on Gen Z consumers [16]. Market Data and Key Metrics Changes - North America sales increased by 8%, while Europe saw a 10% growth, and Greater China revenue grew by 18% [28][29]. - Japan experienced an 11% decline in sales, and other Asian markets saw a 1% decrease [29]. - The direct-to-consumer business grew by 6%, with digital revenue increasing in the mid-teens percentage [30]. Company Strategy and Development Direction - Tapestry aims to leverage its competitive advantages, global scale, and strong fundamentals to drive sustainable growth [11][26]. - The company is focused on building emotional connections with younger consumers, particularly Gen Z and millennials, to enhance customer acquisition and retention [9][12]. - Tapestry is investing in brand marketing and product innovation to strengthen its market position, particularly for Coach and Kate Spade [20][22]. Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating a complex macroeconomic environment, highlighting the resilience and agility of the business [7][11]. - The company anticipates continued mid-single-digit revenue growth for fiscal year 2026, despite facing tariff-related headwinds [39]. - Management emphasized the importance of customer acquisition and retention, particularly among younger demographics, as a foundation for future growth [66][68]. Other Important Information - Tapestry returned $2.3 billion to shareholders in fiscal year 2025, including $300 million in dividends and $2 billion in share repurchases [32]. - The company recorded a non-cash impairment charge of over $850 million related to Kate Spade, reflecting current business trends and strategic investments [36]. - Tapestry's capital allocation priorities include investing in brand growth and returning capital to shareholders, with a commitment to maintaining a solid investment-grade rating [33][34]. Q&A Session Summary Question: Can you help us unpack your outlook for fiscal '26 and what you're seeing in the business right now? - Management highlighted strong top-line results and continued growth momentum at Coach, with expectations for mid-single-digit growth in fiscal '26 despite tariff pressures [50][52]. Question: Can you provide insights on new customer growth and how you plan to maintain margins amid tariff impacts? - Management emphasized the importance of acquiring new customers, particularly younger ones, and expressed confidence in maintaining margins through strategic actions [66][71]. Question: How do you see the interplay between AUR and units as contributors to revenue growth? - Management indicated that while AUR growth is a primary driver, unit growth is also expected to continue, supported by a focus on fewer, high-impact product offerings [78][80]. Question: Can you elaborate on the structural differences today compared to previous years that enable margin expansion? - Management noted that Tapestry is more direct-to-consumer and geographically diversified than in the past, which supports better margin management [94][96].