Tapestry, the parent company of Coach and Kate Spade, has recorded net sales of $1.58bn in the third quarter (Q3) of fiscal year 2025 (FY25), marking a 7% rise on a reported basis or an 8% increase on a constant currency basis against the same period last fiscal year.
The company’s growth is attributed to significant constant currency gains across various regions, including 9% in North America, 35% in Europe, and 4% in Asia-Pacific.
Go deeper with GlobalData
A key contributor to this growth was the Coach brand, which witnessed a robust 15% revenue surge on a constant currency basis.
Direct-to-consumer revenues for the quarter also climbed by 9% on a constant currency basis, bolstered by a mid-teens percentage surge in digital sales and a mid-single digit uptick in global brick-and-mortar store sales.
Tapestry posted operating income of $254m on a generally accepted accounting principles (GAAP) basis in Q3 FY25, resulting in an operating margin of 16.0%. This performance surpasses last year’s figures of $204m with a 13.8% operating margin.
The company also saw its net income surge to $203m over the quarter compared with $139m recorded in Q3 FY24.
US Tariffs are shifting - will you react or anticipate?
Don’t let policy changes catch you off guard. Stay proactive with real-time data and expert analysis.
By GlobalDataIts diluted earnings per share were reported at $0.95 on a GAAP basis, compared to $0.60 per diluted share in Q3 FY24.
Tapestry’s selling, general, and administrative expenses totalled $952m in Q3 FY25, accounting for 60.1% of sales on a GAAP basis.
Gross profit for the company amounted to $1.21bn in Q3 FY25, with a gross margin of 76.1%, reflecting operational enhancements of approximately 140 basis points over the prior year’s gross profit of $1.11bn and gross margin of 74.7%.
In light of these positive results, Tapestry has revised its FY25 outlook upwards on a non-GAAP basis.
The company now anticipates revenues to be roughly $6.95bn, indicating a 4% growth from the previous year on a reported basis despite an expected currency headwind of nearly 50 basis points, surpassing the earlier forecast of around 3% growth.
Tapestry projects an operating margin expansion of approximately 100 basis points over the previous year, aligning with previous guidance.
It expects diluted earnings per share to be around $5.00, signifying high-teens percentage growth compared to last year and exceeding earlier projections of between $4.85 and $4.90.
The updated outlook incorporates trade policies as of 10 April 2025, including an anticipated additional tariff of 145% on imports from China and an extra 10% tariff on all other global imports, said the company.
It notes that these tariffs are expected to have a negligible effect on FY25 outcomes due to the timing associated with sell-throughs and goods in transit.
Tapestry CEO Joanne Crevoiserat said: “Our third-quarter outperformance reinforces our position of strength. We accelerated top and bottom-line growth and raised our outlook for the fiscal year, demonstrating the power of brand building and our connections with consumers around the world.
“Importantly, while the external backdrop is complex, our vision remains clear. We maintain a bias for action and will harness our competitive advantages, including our global scale, compelling value, and strong fundamentals, to adapt and win in any environment. We are confident in our future and the meaningful opportunity to deliver durable growth and shareholder value.”
In February this year, Tapestry agreed to sell its luxury footwear brand, Stuart Weitzman, to Caleres via a $105m cash deal.
