Tapestry's Q3 2025 Earnings: Unpacking Key Contradictions in Tariff Strategies, Customer Acquisition, and Gross Margins

Tariff mitigation strategy, customer acquisition strategy, gross margin expansion, direct-to-consumer growth and marketing strategy are the key contradictions discussed in Tapestry's latest 2025Q3 earnings call.



Revenue and Earnings Growth:
- Tapestry, Inc. reported record third quarter results with total revenue gains of 8% at constant currency, outpacing guidance fueled by 15% growth at Coach.
- This growth was driven by strong global performance, particularly in North America and Europe, and by a focus on building brand heat, product innovation, and compelling consumer experiences.

Consumer Acquisition and Engagement:
- Tapestry acquired over 1.2 million new customers in North America, with two-thirds of these being Gen Z and Millennials.
- The company's success in acquiring new, younger consumers is attributed to targeted marketing strategies and a focus on creating deeper emotional connections with consumers, which has led to higher retention rates and sustainable growth.

Gross Margin and Operating Efficiency:
- Tapestry achieved a gross margin of 76.1%, the highest in over 15 years, and an operating margin increase of 140 basis points.
- Operational excellence, strategic pricing, and investments in brand building, particularly at Coach, contributed to this improvement in profitability.

Coach Brand Performance:
- Coach's third quarter revenue increased by 15%, driven by double-digit gains in leather goods and strong performance across global markets.
- Significant sales in North America and international markets, supported by innovative product offerings and targeted marketing campaigns, drove this growth.