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TAPESTRY, INC.

TPR
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Business Summary

Tapestry, Inc. is a house of iconic accessories and lifestyle brands that unites the magic of Coach and kate spade new york, with each brand committed to innovation and authenticity defined by distinctive products and differentiated customer experiences across channels and geographies. The Company operates in the global premium accessories and lifestyle industry, facing intense competition from many other brands in the product lines and markets it participates in, competing on the basis of style, price, customer service, quality, brand prestige and recognition. The Company believes it has significant competitive advantages because of the recognition and acceptance of its brands by consumers and the power of its information technology platform.

The Company's primary competitors are not named individually in the filing, but it notes that competition is based on factors including developing new products, anticipating changing consumer demands, maintaining brand recognition, recruiting key talent, developing innovative products, competitively pricing products, providing effective marketing support, offering attractive digital commerce sites, sourcing sustainable raw materials, ensuring product availability, protecting intellectual property, and adapting to technology changes. The Company's competitive advantages are stated as the recognition and acceptance of its brands by consumers and the power of its information technology platform.

The Company generates revenue through three reportable segments: Coach, Kate Spade, and Stuart Weitzman, each including global sales of primarily brand products to customers through direct-to-consumer (DTC), wholesale, and licensing businesses. DTC revenues were approximately 86% of total net sales in fiscal 2025, wholesale represented approximately 13% of total net sales for fiscal 2025, and royalties from licensing partners currently comprise approximately 1% of Tapestry's total net sales. The Company's DTC business includes retail and outlet stores, brand e-commerce sites, and concession shop-in-shops, while its wholesale business primarily includes major department stores, specialty stores, and third-party digital partners.

The Coach segment represented 79.9% of total net sales in fiscal 2025, with net sales of $5,598.5 million in fiscal 2025, compared to $5,095.3 million in fiscal 2024. Coach product categories include Handbags at $3,223.3 million (57.6% of segment net sales), Accessories at $1,539.5 million (27.5% ), Footwear at $342.5 million (6.1% ), and Other at $493.2 million (8.8% ). The Kate Spade segment represented 17.1% of total net sales in fiscal 2025, with net sales of $1,197.1 million in fiscal 2025, compared to $1,334.4 million in fiscal 2024. Kate Spade product categories include Handbags at $623.0 million (52.1% of segment net sales), Accessories at $269.8 million (22.5% ), Footwear at $55.2 million (4.6% ), and Other at $249.1 million (20.8% ). The Stuart Weitzman segment represented 3.0% of total net sales in fiscal 2025, with net sales of $215.1 million in fiscal 2025, compared to $241.5 million in fiscal 2024.

The Company's total Tapestry product category net sales for fiscal 2025 were Handbags $3,846.3 million (54.9% of total), Accessories $1,809.3 million (25.8% ), Footwear $612.8 million (8.7% ), and Other $742.3 million (10.6% ). The Company has key licensing relationships including Coach Eyewear with Luxottica expiring fiscal 2026, Coach Watches with Movado expiring fiscal 2028, Coach Fragrance with Interparfums expiring fiscal 2031, Kate Spade Tech Accessories with Case-Mate expiring fiscal 2027, Kate Spade Sleepwear with Komar expiring fiscal 2028, Kate Spade Fashion Bedding with Live Comfortably expiring fiscal 2028, Kate Spade Stationery and Gift with Lifeguard Press expiring fiscal 2030, Kate Spade Fragrance with Interparfums expiring fiscal 2030, and Kate Spade Eyewear with Safilo expiring fiscal 2031.

On February 16, 2025, the Company entered into a sale and purchase agreement with Caleres, Inc. to sell the Stuart Weitzman Business for total cash consideration of $105.0 million , with the sale completed on August 4, 2025. On November 13, 2024, the Company terminated the Merger Agreement with Capri Holdings Limited and agreed to reimburse Capri for its expenses in an amount equal to $45.1 million in cash. On November 25, 2024, the Company redeemed all outstanding Capri Acquisition Senior Notes at a redemption price of 101% of the aggregate principal amount. On November 21, 2024, the Company entered into accelerated share repurchase agreements to repurchase an aggregate of up to $2.00 billion of the Company's shares of common stock, paying $2.00 billion to the Dealers and receiving an initial delivery of 28,363,766 shares. During fiscal 2025, the Company recorded $244.1 million of impairment charges to goodwill for the Kate Spade reporting unit and $610.7 million of impairment charges to indefinite-lived brand intangible assets. The Company also recorded $8.8 million of impairment charges within SG&A expense related to long-lived assets.

Total net sales in fiscal 2025 increased 5.1% or $339.5 million to $7,010.7 million from $6,671.2 million in fiscal 2024. Gross profit increased 8.2% or $399.4 million to $5,288.9 million in fiscal 2025 from $4,889.5 million in fiscal 2024, with gross margin increasing 210 basis points to 75.4% as compared to 73.3% in fiscal 2024. Operating income decreased $725.1 million to $415.0 million in fiscal 2025 as compared to $1,140.1 million in fiscal 2024, with operating margin of 5.9% in fiscal 2025 as compared to 17.1% in fiscal 2024. Net income decreased 77.6% or $632.8 million to $183.2 million in fiscal 2025 as compared to $816.0 million in fiscal 2024. Net income per diluted share was $0.82 in fiscal 2025 as compared to $3.50 in fiscal 2024. Excluding items affecting comparability, net income per diluted share was $5.10 in fiscal 2025 from $4.29 in fiscal 2024.

Business Outlook

The Company's 2025 growth strategy, future speed, focuses on four strategic priorities: Building Lasting Customer Relationships by leveraging Tapestry's transformed business model to drive customer lifetime value through increased customer acquisition, retention and reactivation; Fueling Fashion Innovation & Product Excellence by driving sustained growth in core handbags and small leathergoods while accelerating gains in footwear and lifestyle products; Delivering Compelling Omni-Channel Experiences by extending omni-channel leadership to meet the customer wherever they shop, delivering growth online and in stores; and Powering Global Growth by supporting balanced growth across regions, prioritizing North America and China, its largest markets, while capitalizing on opportunities in under-penetrated geographies such as Southeast Asia and Europe. The Company's next investor day will be held in September 2025, during which the Company will present its latest long-term growth strategy.

The Company aims to support balanced growth across regions, prioritizing North America and China, its largest markets, while capitalizing on opportunities in under-penetrated geographies such as Southeast Asia and Europe. The Company continues to enhance its artificial intelligence, both predictive and generative, and machine learning models for areas such as data analytics, planning, marketing, customer journey personalization, pricing and product creation, to improve customer capture and segmentation capabilities. The Company is continually enhancing its digital technology platforms to elevate e-commerce capabilities, strengthen DTC functionalities, and deliver a seamless overall omni-channel experience leveraging modern and cloud-based technologies.

Excluding items affecting comparability, SG&A as a percentage of net sales increased 90 basis points to 55.4% as compared to 54.5% in fiscal 2024, primarily due to higher marketing spend and higher compensation costs driven by accrued incentive compensation, partially offset by leverage of fixed costs on higher net sales. The Company estimates a projected tariff and trade policy impact of approximately 230 basis points to operating margin in fiscal 2026 after consideration of mitigating actions. The Company is prepared to take actions to mitigate this negative impact as changes in trade relations, economic and monetary policies are made clear.

Total capital expenditures and cloud computing implementation costs were $153.0 million in fiscal 2025. The Company maintains fulfillment centers in North America in Florida, Nevada and Ohio operated by Tapestry, and globally utilizes regional fulfillment centers in mainland China, the Netherlands, the United Kingdom, Singapore and Spain owned and operated by third parties, as well as local fulfillment centers through third parties in Japan, parts of Greater China, South Korea, Malaysia and Australia. The Company's information technology platform serves as a foundation to drive growth and enhance consumer centricity initiatives, and enable data-driven decision making.

On November 13, 2024, the Board authorized the Company to repurchase up to $2.00 billion of outstanding shares of its common stock under the 2025 Share Repurchase Program. As of June 28, 2025, the Company had $800.0 million of additional shares available to be repurchased as authorized under the 2022 Share Repurchase Program and no remaining availability to repurchase shares under the 2025 Share Repurchase Program. In fiscal 2025, the Company returned capital to its shareholders through a quarterly cash dividend of $0.35 per common share, for an annual dividend rate of $1.40 per share, or $299.3 million .

The macroeconomic environment remained challenging and volatile during fiscal 2025, with currency volatility, geopolitical instability and political uncertainty, such as the impact of policies implemented by the U.S. Presidential Administration including changes to trade agreements, tax legislation or duty rates, potentially contributing to a worsening of the macroeconomic environment. During fiscal 2025, the U.S. Dollar has continued to fluctuate as compared to foreign currencies in regions where the Company conducts its business, resulting in impacts including decreased Net sales of $13.4 million , no impact to gross margin and approximately 20 basis point negative impact to operating margin.

The Company faces risks associated with potential changes to international trade agreements and the imposition of additional tariffs on importing products, as most of its imported products are subject to tariffs, indirect taxes, quotas and non-tariff trade barriers. During fiscal 2025, the primary manufacturers of Coach products were located in Vietnam, Cambodia, the Philippines and India, and the primary manufacturers of Kate Spade products were located in Vietnam, Cambodia, mainland China, and the Philippines. The Company estimates a projected tariff and trade policy impact of approximately 230 basis points to operating margin in fiscal 2026 after consideration of mitigating actions.

Risk Factors

The Company faces material risks from potential changes to international trade agreements and the imposition of additional tariffs, as most imported products are subject to tariffs and during fiscal 2025 primary manufacturers of Coach products were located in Vietnam, Cambodia, the Philippines and India, and Kate Spade products in Vietnam, Cambodia, mainland China, and the Philippines. The Company estimates a projected tariff and trade policy impact of approximately 230 basis points to operating margin in fiscal 2026. The Company also faces risks from operating in international markets, with approximately 40.0% of net sales coming from operations outside the United States for fiscal year 2025, exposing it to foreign currency exchange rate fluctuations, political instability, and changing macroeconomic conditions. The Company has incurred a substantial amount of indebtedness, with consolidated debt of approximately $2.39 billion as of June 28, 2025, and must comply with restrictions including a maximum net leverage ratio of 4.00:1.00 under the Amended Revolving Credit Facility. The Kate Spade brand's ability to achieve expected future cash flows could be impacted by factors including optimization of store fleet productivity, success of international expansion strategies, promotional activity, and economic volatility, as evidenced by the $244.1 million goodwill impairment and $610.7 million intangible asset impairment recorded in fiscal 2025.

Management Priorities

Management's message emphasizes the Company's position as a house of iconic accessories and lifestyle brands uniting the magic of Coach and kate spade new york, with each brand unique and independent while sharing a commitment to innovation and authenticity. The Company introduced the 2025 growth strategy, future speed, designed to amplify and extend the competitive advantages of its brands with a focus on four strategic priorities: Building Lasting Customer Relationships, Fueling Fashion Innovation & Product Excellence, Delivering Compelling Omni-Channel Experiences, and Powering Global Growth. The Company's next investor day will be held in September 2025, during which the Company will present its latest long-term growth strategy. Management notes that the Company is closely monitoring changes in the macroeconomic environment and continues to take strategic actions considering near-term exigencies while remaining committed to maintaining the health of the brands and business.

View Source Annual Report on SEC.gov ↗

References

  1. [1] Item 1, Business — Direct to Consumer Business
  2. [2] Item 1, Business — Wholesale Business
  3. [3] Item 1, Business — Licensing Business
  4. [4] Item 1, Business — Our Brands
  5. [5] Item 1, Business — Products
  6. [6] Item 1, Business — Products
  7. [7] Item 1, Business — Products
  8. [8] Item 1, Business — Products
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  12. [12] Item 1, Business — Products
  13. [13] Item 1, Business — Products
  14. [14] Item 1, Business — Products
  15. [15] Item 1, Business — Our Brands
  16. [16] Item 1, Business — Products
  17. [17] Item 1, Business — Products
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  22. [22] Item 1, Business — Products
  23. [23] Item 1, Business — Products
  24. [24] Item 1, Business — Products
  25. [25] Item 1, Business — Products
  26. [26] Item 1, Business — Our Brands
  27. [27] Item 1, Business — Products
  28. [28] Item 1, Business — Products
  29. [29] Item 1, Business — Products
  30. [30] Item 1, Business — Products
  31. [31] Item 1, Business — Products
  32. [32] Item 1, Business — Products
  33. [33] Item 1, Business — Products
  34. [34] Item 1, Business — Products
  35. [35] Item 1, Business — Products
  36. [36] Item 1, Business — Products
  37. [37] Item 7, MD&A — Overview; Note 5, Acquisitions and Divestitures
  38. [38] Item 7, MD&A — Overview; Note 5, Acquisitions and Divestitures
  39. [39] Note 5, Acquisitions and Divestitures
  40. [40] Item 5, Stock Repurchase Program; Item 7, MD&A — Stock Repurchase Program
  41. [41] Item 5, Stock Repurchase Program; Item 7, MD&A — Stock Repurchase Program
  42. [42] Item 5, Stock Repurchase Program; Item 7, MD&A — Stock Repurchase Program
  43. [43] Item 7, MD&A — Fiscal 2025 Impairment; Note 14, Goodwill and Other Intangible Assets
  44. [44] Item 7, MD&A — Fiscal 2025 Impairment; Note 14, Goodwill and Other Intangible Assets
  45. [45] Item 7, MD&A — Critical Accounting Policies and Estimates; Note 3, Significant Accounting Policies
  46. [46] Item 7, MD&A — Results of Operations
  47. [47] Item 7, MD&A — Results of Operations
  48. [48] Item 8, Consolidated Statements of Operations
  49. [49] Item 8, Consolidated Statements of Operations
  50. [50] Item 7, MD&A — Results of Operations
  51. [51] Item 7, MD&A — Results of Operations
  52. [52] Item 8, Consolidated Statements of Operations
  53. [53] Item 8, Consolidated Statements of Operations
  54. [54] Item 7, MD&A — Results of Operations
  55. [55] Item 7, MD&A — Results of Operations
  56. [56] Item 7, MD&A — Results of Operations
  57. [57] Item 7, MD&A — Results of Operations
  58. [58] Item 8, Consolidated Statements of Operations
  59. [59] Item 8, Consolidated Statements of Operations
  60. [60] Item 7, MD&A — Results of Operations
  61. [61] Item 7, MD&A — Results of Operations
  62. [62] Item 7, MD&A — Results of Operations
  63. [63] Item 7, MD&A — Results of Operations
  64. [64] Item 8, Consolidated Statements of Operations
  65. [65] Item 8, Consolidated Statements of Operations
  66. [66] Item 8, Consolidated Statements of Operations
  67. [67] Item 8, Consolidated Statements of Operations
  68. [68] Item 7, MD&A — GAAP to Non-GAAP Reconciliation
  69. [69] Item 7, MD&A — GAAP to Non-GAAP Reconciliation
  70. [70] Item 7, MD&A — Results of Operations
  71. [71] Item 7, MD&A — Results of Operations
  72. [72] Item 7, MD&A — Results of Operations
  73. [73] Item 7, MD&A — Global Economic Conditions and Industry Trends
  74. [74] Item 7, MD&A — Working Capital and Capital Expenditures
  75. [75] Item 5, Stock Repurchase Program; Item 7, MD&A — Stock Repurchase Program
  76. [76] Item 5, Stock Repurchase Program; Item 7, MD&A — Stock Repurchase Program
  77. [77] Item 1A, Risk Factors; Item 7, MD&A — Stock Repurchase Program
  78. [78] Item 1A, Risk Factors; Item 7, MD&A — Stock Repurchase Program
  79. [79] Item 1A, Risk Factors; Item 8, Consolidated Statements of Stockholders' Equity
  80. [80] Item 7, MD&A — Global Economic Conditions and Industry Trends
  81. [81] Item 7, MD&A — Global Economic Conditions and Industry Trends
  82. [82] Item 7, MD&A — Global Economic Conditions and Industry Trends
  83. [83] Item 7, MD&A — Global Economic Conditions and Industry Trends
  84. [84] Item 1A, Risk Factors
  85. [85] Item 1A, Risk Factors
  86. [86] Item 1A, Risk Factors
  87. [87] Item 7, MD&A — Fiscal 2025 Impairment; Note 14, Goodwill and Other Intangible Assets
  88. [88] Item 7, MD&A — Fiscal 2025 Impairment; Note 14, Goodwill and Other Intangible Assets
  89. [89] Item 8, Consolidated Statements of Operations
  90. [90] Item 8, Consolidated Statements of Operations
  91. [91] Item 8, Consolidated Statements of Operations
  92. [92] Item 8, Consolidated Statements of Operations
  93. [93] Item 8, Consolidated Statements of Operations
  94. [94] Item 8, Consolidated Statements of Operations
  95. [95] Item 8, Consolidated Statements of Operations
  96. [96] Item 8, Consolidated Statements of Operations
  97. [97] Item 7, MD&A — Results of Operations
  98. [98] Item 7, MD&A — Results of Operations
  99. [99] Item 8, Consolidated Statements of Cash Flows
  100. [100] Item 8, Consolidated Statements of Cash Flows
  101. [101] Item 8, Consolidated Balance Sheets
  102. [102] Item 8, Consolidated Balance Sheets
  103. [103] Item 1A, Risk Factors
  104. [104] Item 7, MD&A — Fiscal 2025 Impairment; Note 14, Goodwill and Other Intangible Assets
  105. [105] Item 7, MD&A — Fiscal 2025 Impairment; Note 14, Goodwill and Other Intangible Assets
  106. [106] Item 8, Consolidated Statements of Operations
  107. [107] Item 7, MD&A — GAAP to Non-GAAP Reconciliation
  108. [108] Item 7, MD&A — Results of Operations
  109. [109] Item 7, MD&A — Results of Operations
  110. [110] Item 7, MD&A — Results of Operations
  111. [111] Item 7, MD&A — Results of Operations
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Analysis on 6/21/2026