Tapestry, parent company of Coach and Kate Spade, had net sales of $15.8 billion in the third quarter (Q3) of fiscal 2025 (Q25), marking a 7% increase in the previous year compared to the same period and an 8% increase on the constant currency basis.
The company's growth is attributed to constant currency growth across regions, including 9% in North America, 35% in Europe and 4% in Asia-Pacific.
The key factor in this growth is the coaching brand, which witnessed a 15% revenue growth on a constant currency basis.
Direct-to-consumer revenue for the quarter also rose 9% on a constant currency basis, due to the mid-term percentage growth in digital sales and the mid-digit growth in physical store sales worldwide.
Tapestry's operating income of $254 million in the third quarter was $254 million, and its operating margin was 16.0% in the 25th fiscal year of the third quarter. That performance surpassed last year's $204 million figure with an operating margin of 13.8%.
The company also saw its net revenue grow to $203 million in the quarter, compared with $139 million in the third quarter.
Its diluted earnings per share was reported at $0.95, compared with $0.60 per share in the third quarter.
Tapestry's sales, general and administrative expenses were $952 million in the fiscal year 25 of Q3, accounting for 60.1% of GAAP sales.
The company's gross profit was $1.11 billion in the third quarter of fiscal 23, with a gross margin of 76.1%, reflecting the previous year's gross profit of about $11.1 billion, at about 140 basis points and a gross margin of 74.7%.
Given these positive results, Tapestry has revised its fiscal 25th year outlook on a non-GAAP basis.
The company now expects revenue to be around $6.95 billion, indicating that while the expected currency headwind will approach 50 basis points, revenue in the previous year increased by 4% from the previous year, surpassing the earlier forecast of a ~3% increase.
The running margin for tapestries was about 100 basis points compared to the previous year, in line with previous guidelines.
It expects diluted revenue per share to be about $5.00, meaning a senior percentage increase compared to last year and surpasses the early forecast of $4.85 to $4.90.
The company said the update's prospects include trade policies as of April 10, 2025, which include additional tariffs on Chinese imports and all other global import duties.
It noted that these tariffs are expected to have a negligible impact on the results of the FY25 due to timing related to selling and commodities in traffic.
Tapestry CEO Joanne Crevoiserat said: “Our third-quarter performance strengthened our position of strength. We accelerated top and bottom line growth and improved our outlook for the fiscal year, which demonstrates the power of brand building and the connection with consumers around the world.
“It is important that despite the complex external context, our vision remains clear. We remain biased towards action and will maintain our competitive advantage, including our global scale, compelling value and a strong foundation to adapt and win any environment. We are confident in the future and meaningful opportunities to deliver lasting growth and shareholder value.”
In February, Tapestry agreed to sell its luxury footwear brand Stuart Weitzman to trucks through a $105 million cash transaction.
“Tasterisks have improved outlook for fiscal 25 years as Q3 sales grew 7%” was originally created and released by the Insight Network, a brand owned by GlobalData.
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