Tapestry (TPR) 7 Nov 24 2025 Q1 Earnings call transcript

Tapestry, Inc. (NYSE: TPR), a leading New York-based house of modern luxury accessories and lifestyle brands, reported strong earnings for its first quarter, exceeding expectations and showcasing the company's strategic growth agenda. The company, which operates under the Coach, Kate Spade, and Stuart Weitzman brands, achieved total revenue in line with the prior year on a constant currency basis, driven by solid growth at Coach and a focus on digital sales and customer acquisition.

Strong Performance Across Brands and Regions

Highlights of the quarter include a 2% increase in international revenue, led by a 27% growth in Europe, and a 2% decline in the total APAC region, with a sequential trend improvement throughout the quarter. In Greater China, sales declined 5%, in line with the company's guidance range, and included a sequential trend improvement. This strong performance was underpinned by a focus on innovation, relevance, and value, which has positioned Tapestry's brands and business for future growth.

Customer Acquisition and Digital Growth

Tapestry also reported a significant increase in customer acquisition, with approximately 1.4 million new customers in North America alone. Over half of these customers were Gen Z and millennials, reflecting the company's strategy to recruit younger consumers to its brands. Additionally, digital sales grew high single digits versus the prior year and represented over 25% of revenue at accretive margins, highlighting the company's focus on digital transformation and omnichannel experiences.

Brand Innovation and Expansion

The quarter also saw the launch of new product offerings, including the New York family of bags at Coach, which surpassed expectations and cemented their place as new pillars for the brand. The Brooklyn shoulder bag and Empire carryall were particularly successful, with the Brooklyn bag being the top recruitment driver of Gen Z consumers. These new products, along with the continued success of the Tabby handbag family, demonstrate Tapestry's ability to innovate and deliver products that resonate with consumers.

Looking Ahead

Looking ahead, Tapestry remains focused on fueling growth and shareholder value, with a clear strategy to deepen its connection with consumers and drive brand heat. This includes continued investment in product innovation, marketing efforts, and omnichannel experiences. The company is also exploring opportunities to scale innovative products and marketing campaigns across channels, building on the success of the Tabby handbag test in outlet stores.

Challenges and Opportunities

Despite the strong performance, Tapestry faces challenges, particularly in the form of the ongoing acquisition of Capri, which is currently subject to a preliminary injunction from the FTC. The company is appealing the decision and continues to focus on its organic growth plan, positioning its brands and business for future success.

In conclusion, Tapestry's strong first-quarter results underscore its ability to navigate a dynamic business landscape and deliver sustainable growth. With a focus on brand building, customer centricity, and operational excellence, Tapestry is well-positioned for continued success. The company's commitment to innovation, digital transformation, and customer engagement sets it apart from competitors and positions it for long-term growth.