01—Abstract
Summary
Summary of the 10-Q filed May 8, 2025. Cited figures are marked; the original filing is the authoritative source.
Tapestry, Inc. (TPR) reported net sales of $1,584.6 milliona for the third quarter of fiscal 2025 (ended March 29, 2025), up from $1,482.4 million a year earlier, and net income of $203.3 million, up from $139.4 million.
Diluted EPS was $0.95b versus $0.60. Operating income rose to $253.7 million from $204.3 million, with gross profit of $1,205.8 million and SG&A of $952.1 million. For the first nine months of fiscal 2025, net sales were $5,287.5 million and net income was $700.3 million, after a $120.1 million loss on extinguishment of debt tied to the terminated Capri Acquisition.
Coach was the main driver, with segment net sales of $1,293.5 millionc in the quarter. Kate Spade net sales were $244.9 million and Stuart Weitzman net sales were $46.2 million, both declining. The balance sheet changed substantially over the period.
Cash and cash equivalents fell to $1,037.7 milliond from $6,142.0 million at June 29, 2024, and long-term debt declined to $2,377.1 million from $6,937.2 million. Financing outflows included $1,665.3 million of share repurchases in the nine months, plus $350.0 million of repurchases not yet settled, and $6,859.9 million of debt repayment. Total stockholders' equity fell to $1,493.8 million from $2,896.9 million.
The company also agreed on February 16, 2025 to sell the Stuart Weitzman Business to Caleres, Inc. for $105.0 million in cash, subject to adjustments, with closing expected in the summer of 2025. Management's outlook notes that tariffs announced in the second half of fiscal 2025 are not expected to have a meaningful negative impact on fiscal 2025 results, but could have a material negative impact on fiscal 2026 and beyond depending on trade negotiations. The company also disclosed two putative securities class actions filed in December 2024 and January 2025 relating to the terminated Capri Acquisition, which it intends to defend vigorously.
02—Key points
Key Highlights
- Third-quarter net sales rose 6.9% to $1,584.6 million, and diluted EPS was $0.95 versus $0.60 a year earlier.
- Gross margin improved to 76.1% from 74.7%, which management attributed primarily to net pricing improvements.
- Coach net sales increased 12.9% to $1,293.5 million in the quarter, while Kate Spade fell 12.7% and Stuart Weitzman fell 17.7%.
- Cash and cash equivalents declined to $1,037.7 million from $6,142.0 million, and long-term debt declined to $2,377.1 million from $6,937.2 million.
- The nine-month period included a $120.1 million loss on extinguishment of debt and $268.4 million of pre-tax Capri Acquisition-related expenses, following the termination of the merger agreement on November 13, 2024.
- The company agreed to sell the Stuart Weitzman Business to Caleres, Inc. for $105.0 million in cash, with closing expected in the summer of 2025.
- Stockholders' equity fell to $1,493.8 million from $2,896.9 million, reflecting $2.00 billion in accelerated share repurchases and other capital returns.
- $800.0 million remained available under the 2022 Share Repurchase Program as of March 29, 2025, and no shares were repurchased in the third quarter.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q3 FY2025, Tapestry kept $0.13.
- Revenue$1.58B100.0%
- Cost of revenue−$378.8M23.9%
- Gross profit$1.21B76.1%
- Operating costs−$952.1M60.1%
- Operating income$253.7M16.0%
- Interest, other & tax−$50.4M3.2%
- Net income$203.3M12.8%
04—Financials
Financial Highlights
Figures from 10-QQ3 FY2025filed May 8, 2025Financial Statements
Q3 FY2025 against Q3 FY2024
| Line item | Q3 FY2025Q3 FY2024 | Change |
|---|---|---|
| Revenue | $1.58B$1.48B | +6.9% |
| Cost of Revenue | $378.80M$375.00M | +1.0% |
| Gross Profit | $1.21B$1.11B | +8.9% |
| SG&A Expenses | $952.10M$903.10M | +5.4% |
| Operating Income | $253.70M$204.30M | +24.2% |
| Interest Expense | $32.80M$130.10M | −74.8% |
| Net Income | $203.30M$139.40M | +45.8% |
| EPS (Basic) | $0.98$0.61 | +60.7% |
| EPS (Diluted) | $0.95$0.60 | +58.3% |
| Shares Outstanding (Basic) | 207.30M229.50M | −9.7% |
| Shares Outstanding (Diluted) | 213.90M234.20M | −8.7% |
05—Questions
Frequently Asked Questions
Why did net income rise so sharply in the third quarter?
Net income increased 45.9% to $203.3 million, driven by operating income growth of 24.2% to $253.7 million. Gross margin rose 140 basis points to 76.1%, primarily from net pricing improvements, and interest expense, net fell to $15.4 million from $32.0 million.
What happened to the Capri Acquisition?
The merger agreement was terminated on November 13, 2024 after the FTC obtained a preliminary injunction. Tapestry reimbursed Capri $45.1 million in expenses, redeemed the Capri Acquisition Senior Notes at 101% of principal on November 25, 2024, and the FTC dismissed its complaint on December 4, 2024.
How much debt did the company repay, and how was it refinanced?
The company repaid $6,859.9 million of debt in the nine months ended March 29, 2025, mainly the Capri Acquisition Senior Notes. It issued $1.50 billion of 5.100% Senior Notes due 2030 and 5.500% Senior Notes due 2035 in December 2024, and borrowed $1.00 billion under its revolving credit facility, which had no outstanding borrowings at March 29, 2025.
What is the outlook for tariffs?
Management does not expect a meaningful negative impact on fiscal 2025 results, citing actions to accelerate inventory purchases. However, it states there could be a material negative impact on fiscal 2026 and beyond depending on the outcome of trade negotiations, and says it is prepared to take mitigating actions.
What legal risks are disclosed?
Two putative securities class actions were filed in the U.S. District Court for the District of Delaware in December 2024 and January 2025 against Capri, Tapestry and certain officers, alleging misrepresentations about the Capri Acquisition. The complaints seek unspecified damages, and the company intends to vigorously defend the matters.
06—Continue