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TPR Q3 Earnings Top Estimates, Sales Grow Y/Y, FY25 Outlook Raised
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Tapestry, Inc. (TPR - Free Report) reported impressive third-quarter fiscal 2025 results that exceeded the Zacks Consensus Estimate for revenues and earnings. Also, the top and bottom lines increased year over year. Driven by the fiscal third-quarter results, Tapestry has raised its fiscal 2025 outlook.
The company showcased broad-based growth in the fiscal third quarter, with the Coach brand driving momentum through strong consumer engagement, especially among Gen Z and Millennials. Tapestry emphasized global gains, with notable strength in North America, Europe and China, supported by product innovation and digital expansion. TPR’s direct-to-consumer model and agile supply chain remain central to its strategy for long-term, sustainable growth across a dynamic retail landscape.
Tapestry reported adjusted earnings of $1.03 a share for the fiscal third quarter, which surpassed the Zacks Consensus Estimate of 89 cents and increased 27.2% from 81 cents in the prior-year period. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)
Net sales were $1,584.6 million, beating the consensus estimate of $1,529 million. Also, net sales reflected a 6.9% year-over-year increase and 8% growth on a constant-currency basis. Foreign exchange had a negative impact of roughly 150 basis points for the quarter, driven by the strengthening of the U.S. Dollar.
In the fiscal third quarter, the company acquired more than 1.2 million customers in North America, exceeding the prior year's performance. This growth was largely fueled by increased engagement from Gen Z and Millennial consumers, who accounted for approximately two-thirds of the new customer base.
Direct-to-consumer revenues grew 9% on a constant-currency basis, driven by a mid-teen increase in digital sales and a mid-single-digit rise in global brick-and-mortar performance. Profitability improved across channels, supported by a combination of creative innovation and Tapestry’s advanced data and analytics capabilities.
Tapestry’s Brand-Wise Sales Details
For the quarter, Coach's net sales were $1.29 billion, beating the Zacks Consensus Estimate of $1.22 billion. This marked a 13% year-over-year increase on a reported basis and 15% growth on a constant-currency basis.
Kate Spade’s sales were $244.9 million, lagging the consensus estimate of $252.6 million, marking a 13% decline on a reported and a 12% dip on a constant-currency basis from the year-ago period.
Stuart Weitzman’s net sales totaled $46.2 million, missing the consensus estimate of $51.9 million. This marked an 18% year-over-year decrease on a reported basis and a 17% dip on a constant-currency basis.
TPR Provides Q3 Revenue Insights by Region
Sales in North America increased 9% year over year to $951.7 million. Sales in Greater China improved 3% to $278.9 million.
In Japan, sales decreased 8% year over year to $138.2 million, while revenues from Other Asian markets rose 11% to $93.9 million. European markets continued to show momentum, with a 32% increase in revenues to $92.9 million, thanks to robust spending from local consumers and tourists.
Tapestry’s Margins & Cost Details
The consolidated gross profit was $1.21 billion, up 8.9% from the year-ago period. Also, the gross margin increased by 140 basis points to 76.1%, reflecting Tapestry’s strong operational performance and disciplined execution, which enabled continued incremental investment in brand marketing.
The company reported an adjusted operating income of $277.3 million, up 15.9% from $239.3 million in the year-ago period. Meanwhile, the adjusted operating margin increased 140 basis points to 17.5%.
Adjusted selling, general and administrative expenses totaled $928.5 million, up 7% from $868.1 million in the year-ago period. The rise reflected higher brand-building investments and increased compensation, partially offset by fixed cost leverage. As a percentage of net sales, this metric remained flat year over year at 58.6%.
TPR’s Q3 Store Update
As of the end of the fiscal third quarter, the company operated 324 Coach stores, 192 Kate Spade outlets and 29 Stuart Weitzman stores in North America. Internationally, the store count was 599, 175 and 57 for Coach, Kate Spade and Stuart Weitzman, respectively.
TPR ended the quarter with cash, cash equivalents and short-term investments of $1.1 billion, long-term debt of $2.38 billion, and stockholders' equity of $1.49 billion.
The operating cash flow as of March 29, 2025, was $769.8 billion, down from $999.6 million in the previous-year period. The adjusted free cash flow was an inflow of $134.6 million. The capital expenditure and implementation costs related to cloud computing for the fiscal third quarter totaled $36 million compared with $29 million in the prior year.
As previously disclosed, the company initiated a $2-billion Accelerated Share Repurchase (ASR) program on Nov. 24, which continued through the fiscal third quarter. Beyond the ASR, the company still has $800 million available under its existing share repurchase authorization.
TPR’s Q4 Outlook
Tapestry anticipates fiscal fourth-quarter revenue growth in the mid-single digits on both a reported and constant-currency basis, with trends so far consistent with the fiscal third quarter. The operating margin is expected to be in line with the prior-year period’s actual, supported by gross margin gains but offset by higher SG&A due to the timing shift of marketing expenses.
The company projects fiscal fourth-quarter earnings per share to exceed 95 cents. Despite macroeconomic uncertainties and trade policy shifts, Tapestry expects minimal impacts of tariffs due to limited manufacturing exposure in China and a diversified supply chain concentrated in Vietnam, Cambodia and the Philippines.
What Lies Ahead for Tapestry?
This Zacks Rank #2 (Buy) company has raised its financial outlook for fiscal 2025. The company expects revenues of $6.95 billion, indicating 4% growth from the prior year on a reported basis, including an anticipated currency headwind of 50 basis points. This revised forecast is ahead of the previous guidance, which called for 3% growth.
Regionally, the company expects sales to grow 3-4% in North America, around 30% in Europe, in the low-single digits in Greater China, high-single digits in other parts of Asia, and a mid-single-digit decline in Japan.
The operating margin is expected to expand 100 basis points year over year.
Earnings per share are forecast to be $5.00, implying high-teens percentage growth from the prior year’s actual and exceeding the earlier view of $4.85-$4.90. The adjusted free cash flow is expected to reach $1.3 billion, with the capital expenditure and cloud computing costs estimated at $160 million, focused on store investments and digital infrastructure.
The outlook incorporates trade policies as of April 10, 2025, including a 145% tariff on imports from China and a 10% tariff on other global imports, which are expected to have an immaterial impact on fiscal 2025 due to the timing of sell-through and goods in transit. It also reflects spot foreign exchange rates, assumes no major worsening of inflation or consumer confidence, and excludes one-time transaction costs related to the pending sale of Stuart Weitzman, expected to close in summer 2025.
TPR Stock Past Three-Month Performance
Image Source: Zacks Investment Research
Shares of the company have lost 1.9% in the past three months compared with the industry’s decline of 16.3%.
The Zacks Consensus Estimate for Stitch Fix’s fiscal 2025 earnings indicates growth of 64.7% from the fiscal 2024 reported level. SFIX delivered a trailing four-quarter average earnings surprise of 48.9%.
Canada Goose is a global outerwear brand. GOOS is a designer, manufacturer, distributor and retailer of premium outerwear for men, women and children. It carries a Zacks Rank #2 at present.
The Zacks Consensus Estimate for Canada Goose’s current fiscal year’s earnings and revenues implies declines of 1.4% and 4.9%, respectively, from the year-ago actuals. GOOS delivered a trailing four-quarter average earnings surprise of 71.3%.
G-III Apparel is a manufacturer, designer and distributor of apparel and accessories under three types of brands, licensed, owned and private label. It currently carries a Zacks Rank of 2.
The Zacks Consensus Estimate for GIII’s fiscal 2025 earnings and revenues implies declines of 4.5% and 1.2%, respectively, from the year-ago actuals. G-III Apparel delivered a trailing four-quarter average earnings surprise of 117.8%.
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TPR Q3 Earnings Top Estimates, Sales Grow Y/Y, FY25 Outlook Raised
Tapestry, Inc. (TPR - Free Report) reported impressive third-quarter fiscal 2025 results that exceeded the Zacks Consensus Estimate for revenues and earnings. Also, the top and bottom lines increased year over year. Driven by the fiscal third-quarter results, Tapestry has raised its fiscal 2025 outlook.
The company showcased broad-based growth in the fiscal third quarter, with the Coach brand driving momentum through strong consumer engagement, especially among Gen Z and Millennials. Tapestry emphasized global gains, with notable strength in North America, Europe and China, supported by product innovation and digital expansion. TPR’s direct-to-consumer model and agile supply chain remain central to its strategy for long-term, sustainable growth across a dynamic retail landscape.
Tapestry, Inc. Price, Consensus and EPS Surprise
Tapestry, Inc. price-consensus-eps-surprise-chart | Tapestry, Inc. Quote
More on TPR’s Q3 Financial Results
Tapestry reported adjusted earnings of $1.03 a share for the fiscal third quarter, which surpassed the Zacks Consensus Estimate of 89 cents and increased 27.2% from 81 cents in the prior-year period. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)
Net sales were $1,584.6 million, beating the consensus estimate of $1,529 million. Also, net sales reflected a 6.9% year-over-year increase and 8% growth on a constant-currency basis. Foreign exchange had a negative impact of roughly 150 basis points for the quarter, driven by the strengthening of the U.S. Dollar.
In the fiscal third quarter, the company acquired more than 1.2 million customers in North America, exceeding the prior year's performance. This growth was largely fueled by increased engagement from Gen Z and Millennial consumers, who accounted for approximately two-thirds of the new customer base.
Direct-to-consumer revenues grew 9% on a constant-currency basis, driven by a mid-teen increase in digital sales and a mid-single-digit rise in global brick-and-mortar performance. Profitability improved across channels, supported by a combination of creative innovation and Tapestry’s advanced data and analytics capabilities.
Tapestry’s Brand-Wise Sales Details
For the quarter, Coach's net sales were $1.29 billion, beating the Zacks Consensus Estimate of $1.22 billion. This marked a 13% year-over-year increase on a reported basis and 15% growth on a constant-currency basis.
Kate Spade’s sales were $244.9 million, lagging the consensus estimate of $252.6 million, marking a 13% decline on a reported and a 12% dip on a constant-currency basis from the year-ago period.
Stuart Weitzman’s net sales totaled $46.2 million, missing the consensus estimate of $51.9 million. This marked an 18% year-over-year decrease on a reported basis and a 17% dip on a constant-currency basis.
TPR Provides Q3 Revenue Insights by Region
Sales in North America increased 9% year over year to $951.7 million. Sales in Greater China improved 3% to $278.9 million.
In Japan, sales decreased 8% year over year to $138.2 million, while revenues from Other Asian markets rose 11% to $93.9 million. European markets continued to show momentum, with a 32% increase in revenues to $92.9 million, thanks to robust spending from local consumers and tourists.
Tapestry’s Margins & Cost Details
The consolidated gross profit was $1.21 billion, up 8.9% from the year-ago period. Also, the gross margin increased by 140 basis points to 76.1%, reflecting Tapestry’s strong operational performance and disciplined execution, which enabled continued incremental investment in brand marketing.
The company reported an adjusted operating income of $277.3 million, up 15.9% from $239.3 million in the year-ago period. Meanwhile, the adjusted operating margin increased 140 basis points to 17.5%.
Adjusted selling, general and administrative expenses totaled $928.5 million, up 7% from $868.1 million in the year-ago period. The rise reflected higher brand-building investments and increased compensation, partially offset by fixed cost leverage. As a percentage of net sales, this metric remained flat year over year at 58.6%.
TPR’s Q3 Store Update
As of the end of the fiscal third quarter, the company operated 324 Coach stores, 192 Kate Spade outlets and 29 Stuart Weitzman stores in North America. Internationally, the store count was 599, 175 and 57 for Coach, Kate Spade and Stuart Weitzman, respectively.
Tapestry’s Financial Snapshot: Cash, Debt & Equity Overview
TPR ended the quarter with cash, cash equivalents and short-term investments of $1.1 billion, long-term debt of $2.38 billion, and stockholders' equity of $1.49 billion.
The operating cash flow as of March 29, 2025, was $769.8 billion, down from $999.6 million in the previous-year period. The adjusted free cash flow was an inflow of $134.6 million. The capital expenditure and implementation costs related to cloud computing for the fiscal third quarter totaled $36 million compared with $29 million in the prior year.
As previously disclosed, the company initiated a $2-billion Accelerated Share Repurchase (ASR) program on Nov. 24, which continued through the fiscal third quarter. Beyond the ASR, the company still has $800 million available under its existing share repurchase authorization.
TPR’s Q4 Outlook
Tapestry anticipates fiscal fourth-quarter revenue growth in the mid-single digits on both a reported and constant-currency basis, with trends so far consistent with the fiscal third quarter. The operating margin is expected to be in line with the prior-year period’s actual, supported by gross margin gains but offset by higher SG&A due to the timing shift of marketing expenses.
The company projects fiscal fourth-quarter earnings per share to exceed 95 cents. Despite macroeconomic uncertainties and trade policy shifts, Tapestry expects minimal impacts of tariffs due to limited manufacturing exposure in China and a diversified supply chain concentrated in Vietnam, Cambodia and the Philippines.
What Lies Ahead for Tapestry?
This Zacks Rank #2 (Buy) company has raised its financial outlook for fiscal 2025. The company expects revenues of $6.95 billion, indicating 4% growth from the prior year on a reported basis, including an anticipated currency headwind of 50 basis points. This revised forecast is ahead of the previous guidance, which called for 3% growth.
Regionally, the company expects sales to grow 3-4% in North America, around 30% in Europe, in the low-single digits in Greater China, high-single digits in other parts of Asia, and a mid-single-digit decline in Japan.
The operating margin is expected to expand 100 basis points year over year.
Earnings per share are forecast to be $5.00, implying high-teens percentage growth from the prior year’s actual and exceeding the earlier view of $4.85-$4.90. The adjusted free cash flow is expected to reach $1.3 billion, with the capital expenditure and cloud computing costs estimated at $160 million, focused on store investments and digital infrastructure.
The outlook incorporates trade policies as of April 10, 2025, including a 145% tariff on imports from China and a 10% tariff on other global imports, which are expected to have an immaterial impact on fiscal 2025 due to the timing of sell-through and goods in transit. It also reflects spot foreign exchange rates, assumes no major worsening of inflation or consumer confidence, and excludes one-time transaction costs related to the pending sale of Stuart Weitzman, expected to close in summer 2025.
TPR Stock Past Three-Month Performance
Image Source: Zacks Investment Research
Shares of the company have lost 1.9% in the past three months compared with the industry’s decline of 16.3%.
Other Key Picks
Some other top-ranked stocks are Stitch Fix (SFIX - Free Report) , Canada Goose (GOOS - Free Report) and G-III Apparel Group, Ltd. (GIII - Free Report) .
Stitch Fix delivers customized shipments of apparel, shoes and accessories for women, men and kids. It has a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for Stitch Fix’s fiscal 2025 earnings indicates growth of 64.7% from the fiscal 2024 reported level. SFIX delivered a trailing four-quarter average earnings surprise of 48.9%.
Canada Goose is a global outerwear brand. GOOS is a designer, manufacturer, distributor and retailer of premium outerwear for men, women and children. It carries a Zacks Rank #2 at present.
The Zacks Consensus Estimate for Canada Goose’s current fiscal year’s earnings and revenues implies declines of 1.4% and 4.9%, respectively, from the year-ago actuals. GOOS delivered a trailing four-quarter average earnings surprise of 71.3%.
G-III Apparel is a manufacturer, designer and distributor of apparel and accessories under three types of brands, licensed, owned and private label. It currently carries a Zacks Rank of 2.
The Zacks Consensus Estimate for GIII’s fiscal 2025 earnings and revenues implies declines of 4.5% and 1.2%, respectively, from the year-ago actuals. G-III Apparel delivered a trailing four-quarter average earnings surprise of 117.8%.