Q4 2025 Tapestry Inc Earnings Call Transcript
Key Points
- Tapestry Inc (TPR) achieved a record $7 billion in revenue and a 20% operating margin for fiscal 2025, with adjusted EPS of $5.10, all showing significant growth compared to the previous year.
- The company successfully acquired over 6.8 million new customers in North America, with a strong focus on Gen Z and millennial cohorts, indicating effective customer acquisition strategies.
- Coach, a key brand under Tapestry Inc (TPR), delivered a 10% increase in revenue, with double-digit growth in key markets such as North America, China, and Europe.
- Tapestry Inc (TPR) demonstrated strong gross margin performance, achieving a record fourth-quarter gross margin of 76.3%, driven by operational outperformance.
- The company returned $2.3 billion to shareholders in fiscal 2025, showcasing robust cash flow generation and a commitment to shareholder returns.
- Kate Spade, another brand under Tapestry Inc (TPR), experienced a 13% revenue decline in the fourth quarter, indicating challenges in its turnaround efforts.
- The company recorded a noncash impairment charge of over $850 million related to Kate Spade, reflecting current business trends and tariff impacts.
- Tapestry Inc (TPR) faces significant profit headwinds from tariffs and duties, with an expected impact of $160 million on profitability for fiscal 2026.
- The early termination of de minimis exemptions has increased tariff-related costs, adding to the company's financial challenges.
- Despite strong performance, Tapestry Inc (TPR) anticipates gross margin pressure in fiscal 2026 due to tariff and duty headwinds, particularly in the second half of the year.
Good day, and welcome to this Tapestry conference call. Today's call is being recorded. At this time, for opening remarks and introductions, I would like to turn the call over to the Global Head of Investor Relations, Christina Colone.
Good morning. Thank you for joining us. With me today to discuss our fourth-quarter and full-year results as well as our strategies and outlook are Joanne Crevoiserat, Tapestry's Chief Executive Officer; and Scott Roe, Tapestry's Chief Financial Officer and Chief Operating Officer.
Before we begin, we must point out that this conference call will involve certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act. This includes projections for our business in the current or future quarters or fiscal years.
Forward-looking statements are not guarantees and our actual results may differ materially from those expressed or implied in the forward-looking statements. Please refer to our annual report on Form 10-K, the press
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