“Our first quarter results outperformed expectations, showcasing the brand magic and operational excellence that fuel our strategic growth agenda. Our talented global teams fostered consumer connections through innovative products, experiences, and storytelling while managing our business with focus and discipline against a dynamic backdrop”, commented Joanne Crevoiserat, Chief Executive Officer of Tapestry.

First Quarter Results

In the first quarter that ended on the 28^th of September, the company’s net sales were flat at 1.51 billion US dollars. Currency was a headwind of 40 basis points in the quarter due to the strengthening of the US dollar.

First quarter net sales at Coach increased by 1%, or 2% on a constant currency basis, to 1.17 billion US dollars, and at Stuart Weitzman increased by 2% to 53.7 million US dollars, on a comparable basis to the same period of fiscal 2024. On the contrary, Kate Spade's net sales decreased year-on-year by 7%, or 6% on a constant currency basis, to 283.2 million US dollars.

From a regional perspective, Tapestry’s first quarter net sales in North America totalled 948.2 million US dollars, a decrease of 1%, as compared to the same period in the prior year, including the reduction of the wholesale share. Net sales also decreased in Greater China by 4%, or 5% on a constant currency basis, to 234.1 million US dollars and in Japan by 8%, or 4% on a constant currency basis, to 117.1 million US dollars. However, Europe was a bright spot for the company, with net sales up by 27% year-on-year to 94.3 million US dollars.

In the first quarter of fiscal 2025, Tapestry’s gross profit was 1.13 billion US dollars and the gross margin was 75.3%, as compared to 1.10 billion US dollars and a gross margin of 72.5% in the same prior year period. This was driven by operational improvements of 180 basis points and a benefit of 60 basis points from lower freight expense, as well as currency tailwinds.

Tapestry reported a first quarter operating income of 252 million US dollars and an operating margin of 16.7%, on a comparable basis to 253 million US dollars and 18.9% in the first quarter of the previous year. On a non-GAAP basis, the operating income was 285 million US dollars, and the operating margin was 18.9%, on a comparable basis to 273 million US dollars and 18.0% in the first quarter of the previous fiscal year.

In the first quarter of the current fiscal year, the company reported earnings per diluted share of 0.79 US dollars and non-GAAP earnings per diluted share of 1.02 US dollars, down from 0.84 US dollars and up from 0.93 US dollars, respectively, in the same year ago period.    

Fiscal 2025 Outlook

For the full year, Tapestry now expects more than 6.75 billion US dollars in revenue, an increase of approximately 1% to 2% on a reported and constant currency basis over the prior year, and ahead of the prior guidance of modest growth on a reported basis and approximately 1% on a constant currency basis.

In addition, earnings per diluted share are now expected to be in the range of 4.50 US dollars to 4.55 US dollars, a mid-single-digit increase over last year and up from the previous guidance of 4.45 US dollars to 4.50 US dollars.