Tapestry(US:TPR)2025-08-14 13:00Financial Data and Key Metrics Changes - Tapestry reported a record revenue of $7 billion 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 [5][27]. - The company achieved a 5% revenue growth overall, with Coach leading at 10% growth [27][28]. - Gross margins increased by 210 basis points, and EPS grew by 19% year-over-year [27][31]. Business Line Data and Key Metrics Changes - Coach experienced a 10% revenue increase for the year, with a 13% constant currency growth in Q4, driven by strong performance in North America (up 16%), China (up 22%), and Europe (up 12%) [11][28]. - Kate Spade's revenue decreased by 13% in Q4, reflecting ongoing brand reset efforts, while the company is focused on increasing brand awareness and customer acquisition [19][21]. - Stuart Weitzman was sold to Caleres, aligning with Tapestry's strategy for disciplined capital allocation [24]. Market Data and Key Metrics Changes - North America sales increased by 8%, with significant contributions from Coach [28]. - In Europe, revenue grew by 10%, driven by local consumer spending and new customer acquisition, particularly among Gen Z [29]. - Greater China saw an 18% revenue growth, indicating strong performance across all channels, especially digital [29]. Company Strategy and Development Direction - Tapestry aims to leverage its competitive advantages, global scale, and strong fundamentals to drive sustainable growth [10][25]. - The company is focused on building emotional connections with younger consumers, particularly Gen Z and millennials, to enhance customer lifetime value [7][12]. - Tapestry is investing in brand marketing and product innovation to strengthen its market position and drive future growth [21][23]. 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 [6][10]. - The company anticipates continued mid-single-digit revenue growth for fiscal year 2026, despite facing tariff-related challenges [39][40]. - Management emphasized the importance of customer acquisition and retention, particularly among younger demographics, as a foundation for future growth [66][67]. 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][33]. - The company recorded a non-cash impairment charge of over $850 million related to Kate Spade, reflecting current business trends and strategic investments [36]. 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, particularly at Coach, while acknowledging tariff impacts [50][52]. Question: Can you help us with the data or the new customer growth? - Management noted significant new customer acquisition, particularly among Gen Z and millennials, which is expected to drive future growth [66][67]. Question: Can you talk about structurally what is different today for Coach? - Management emphasized the brand's direct-to-consumer focus, geographic diversification, and data-driven decision-making as key structural advantages [94][96]. Question: Can you elaborate on the phasing of gross margin for fiscal '26? - Management indicated that gross margins would be stronger in the first half of the year, with tariff impacts expected to affect the second half [86][87].