Tapestry's Q2 2025 Earnings Call: Contradictions in Growth Strategies for Coach, Kate Spade, and Capri Acquisition

These are the key contradictions discussed in Tapestry's latest 2025Q2 earnings call, specifically including: Coach's Growth Sustainability and Strategy, Kate Spade's Growth Plan, and Capri Acquisition Strategy and Financial Expectations:



Record Revenue and Profitability Growth:
- Tapestry reported record quarterly revenue of over $6.8 billion, with a 5% increase year-on-year.
- The growth was fueled by a 10% revenue increase at Coach and a 7% rise in international revenue, led by a 42% increase in Europe.
- This performance was driven by strong customer acquisition, particularly with younger cohorts, and effective brand-building strategies.

Gross Margin and Operating Margin Expansion:
- Tapestry achieved a record second quarter gross margin, which was 280 basis points higher than the previous year, aided by 260 basis points of operational improvement.
- Operating margin increased by approximately 210 basis points, driven by investments in marketing and gross margin improvement.
- These improvements were due to strategic cost management and operational efficiencies.

Strong Performance in Key Markets:
- Revenue in Europe grew by 42%, and Greater China returned to growth with a 2% increase.
- Coach's North American sales grew by 10%, contributing significantly to the overall revenue increase.
- The strong performance was attributed to increased local consumer spend, new customer acquisition, and effective brand engagement strategies.

Innovation and Product Excellence:
- Coach's success was driven by strong and broad-based growth in handbags, with mid-teens AUR gains globally, especially in North America.
- The introduction of the Brooklyn and Tabby families was a key driver, with the Brooklyn Shoulder Bag 28 being a top recruitment driver.
- The innovation and compelling value of these products resonated with younger consumers, leading to increased brand heat and customer acquisition.