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 [5][21]. - The first-quarter gross margin was 76.5%, reflecting a 120 basis points increase year-over-year, driven by operational improvements and the divestiture of Stuart Weitzman [23][24]. 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 [8][21]. - Kate Spade's revenue trends improved sequentially, with a decline of 9% in the first quarter, showing signs of recovery in customer acquisition and brand consideration [15][19]. Market Data and Key Metrics Changes - North America sales accelerated by 18%, Europe saw a 32% revenue growth, and Greater China revenue increased by 19%, showcasing strong global momentum [21][22]. - In Japan, sales declined by 10%, reflecting a challenging consumer environment [22]. 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 [6][19]. - The strategy includes enhancing product innovation, expanding direct-to-consumer channels, and creating immersive retail experiences [12][14]. Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the sustainability of growth, citing structural advantages and a focus on long-term customer engagement [39][40]. - The company raised its fiscal 2026 outlook, expecting revenue of approximately $7.3 billion, representing pro forma growth of 7%-8% [29][30]. 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 [25][26]. - Inventory levels were reported to be 1% below the prior year, indicating effective inventory management as the holiday season approaches [28]. Q&A Session Summary Question: Drivers of accelerated growth and sustainability - Management highlighted structural advantages and a focus on acquiring new customers, particularly Gen Z, as key drivers of growth sustainability [39][40]. Question: Breakdown of Coach's revenue growth - The significant growth in Coach was attributed to new customer acquisition, increased average unit retail (AUR), and geographic expansion [48][49]. Question: Gross margin expectations - Management confirmed that gross margin guidance remains unchanged, with confidence in managing tariff impacts and maintaining profitability [58][59]. Question: European market penetration - The company noted a positive inflection in Europe, driven by effective marketing and customer acquisition strategies [69][70]. Question: Kate Spade's merchandise margin progress - Management acknowledged ongoing efforts to reduce discounting at Kate Spade, which is expected to support long-term growth despite current margin pressures [71][72].

Tapestry's 2025 Investor Day Summary Company Overview - **Company**: Tapestry Inc. - **Brands**: Coach and Kate Spade - **Revenue**: $7 billion across 60 countries with nearly 1,300 directly operated stores worldwide [4][10] Core Points and Arguments Business Momentum and Growth Strategy - **CEO's Statement**: Tapestry is positioned for sustained growth, focusing on amplifying its growth agenda [2][10] - **Consumer-Centric Approach**: The company has shifted to a consumer-obsessed model, emphasizing emotional connections and brand building [6][7] - **Financial Performance**: Over the last three years, Tapestry has recruited over 20 million new customers in North America, achieving a 10% top-line growth and nearly 50% growth in earnings per share [9][10] Brand Positioning - **Coach's Ambition**: Coach aims to reach $10 billion in annual revenue with world-class margins, focusing on emotional connections with consumers [48][49] - **Kate Spade's Growth**: Efforts are underway to reignite growth at Kate Spade, leveraging its iconic status [3][12] Market Opportunities - **Target Demographics**: Focus on the 18-27 age group as a key market entry point, with 25 million women entering this demographic annually [24][26] - **Market Penetration**: Tapestry currently holds a 7% share in a $100 billion market for handbags, small leather goods, and footwear, with significant growth potential [22][41] International Expansion - **Geographic Focus**: Growth strategies will prioritize North America, Greater China, and Europe, with plans for 125 new store openings globally [40][41] - **China's Potential**: The company sees substantial opportunities in China, particularly in cities with large university populations like Wuhan [50][40] Additional Important Insights Consumer Engagement - **Data-Driven Decisions**: Tapestry emphasizes the importance of data and consumer insights in shaping its marketing and product strategies [8][30] - **Emotional Storytelling**: The company aims to create compelling narratives around its products to foster brand loyalty [56][58] Marketing Investments - **Increased Marketing Spend**: Marketing investment has risen from 4% to 11% of revenue over the past few years, totaling $1.8 billion [35][36] - **Brand University**: Tapestry is establishing a brand university to ensure all employees understand brand growth capabilities [36][41] Future Outlook - **Financial Projections**: Tapestry expects mid-single-digit revenue growth, operating margin expansion to over 22%, and low double-digit growth in earnings per share annually for fiscal years 2026-2028 [18][19] - **Shareholder Returns**: Plans to return $4 billion to shareholders over the next three years, reflecting confidence in the company's intrinsic value [18][19] Conclusion - **Long-Term Vision**: Tapestry is committed to building a consumer-centric, emotionally connected brand portfolio that drives sustainable growth and shareholder value [19][41]

Core Viewpoint - Tapestry, the parent company of Coach and Kate Spade, is facing significant profit headwinds due to increased tariffs, which are expected to cost the company $160 million in the upcoming fiscal year, despite anticipated sales growth [1][2]. Financial Performance - Tapestry expects full-year fiscal 2026 earnings to be between $5.30 and $5.45 per share, which is below analysts' expectations of $5.49 per share [1][3]. - The company projects revenue of approximately $7.2 billion for the fiscal year, indicating low single-digit growth compared to the previous year [3]. Tariff Impact - The CFO highlighted that the company is experiencing greater profit challenges from tariffs than previously anticipated, particularly due to the suspension of the de minimis rule, which previously allowed duty-free entry for items valued at $800 or less [2]. - Tapestry is exploring various strategies to mitigate the impact of tariffs, including diversifying manufacturing locations and improving operational efficiency [5]. Industry Context - Other retailers are also adapting to higher tariff costs by moving manufacturing, raising prices, and focusing on popular items [4]. - Major U.S. retailers, including Walmart, Home Depot, and Target, are expected to report their quarterly earnings soon, which may provide further insights into industry trends [6].