01—Abstract
Summary
Summary of the 8-K filed May 8, 2025. Cited figures are marked; the original filing is the authoritative source.
Tapestry, Inc. (NYSE: TPR) reported fiscal 2025 third-quarter results for the quarter ended March 29, 2025, with net sales of $1.58 billiona, up 7% versus the prior year (8% in constant currency).
Coach drove the results, with sales of $1.29 billionb, up 13% (15% constant currency), while Kate Spade ($244.9 million, down 13%) and Stuart Weitzman ($46.2 million, down 18%) declined. GAAP diluted EPS was $0.95, up from $0.60 a year earlier, and non-GAAP diluted EPS was $1.03, up 27%. GAAP operating income was $254 million (16.0% margin) versus $204 million in the prior year.
Net income was $203 millionc on a GAAP basis. Management raised its fiscal 2025 outlook. Non-GAAP revenue is now expected at approximately $6.95 billion, up 4% on a reported basis, versus prior guidance of about 3% growth.
Earnings per diluted share are now expected to be in the area of $5.00d, above the prior guidance of $4.85 to $4.90, and adjusted free cash flow is expected at approximately $1.3 billion, versus prior guidance of $1.2 billion. The company continues to expect to return more than $2 billion to shareholders in fiscal 2025 through dividends and share repurchases, and declared a quarterly dividend of $0.35 per share payable June 23, 2025.
The balance sheet shows cash, cash equivalents and short-term investments of $1.1 billion against total borrowings of $2.7 billion, a net debt of $1.6 billion and a leverage ratio of 1.6x. The filing also notes the pending sale of the Stuart Weitzman brand, expected to close in the summer of 2025, and an outlook that embeds tariff expectations described as having an immaterial impact on fiscal 2025 results.
02—Key points
Key Highlights
- Q3 FY2025 net sales of $1.58 billion, up 7% reported and 8% in constant currency; Coach up 13% (15% constant currency).
- GAAP diluted EPS of $0.95 versus $0.60 a year earlier; non-GAAP diluted EPS of $1.03, up 27%.
- Gross margin of 76.1%, up from 74.7%, driven by operational improvements of approximately 140 basis points.
- Fiscal 2025 outlook raised: revenue of approximately $6.95 billion (4% growth), EPS in the area of $5.00 versus prior guidance of $4.85 to $4.90, and adjusted free cash flow of approximately $1.3 billion.
- Quarterly dividend of $0.35 per share declared; the company expects to return more than $2 billion to shareholders in fiscal 2025 and has $800 million remaining under its prior repurchase authorization, in addition to the $2 billion ASR.
- Balance sheet: $1.1 billion in cash and short-term investments, $2.7 billion in total borrowings, net debt of $1.6 billion, and a 1.6x leverage ratio.
- Pending sale of the Stuart Weitzman brand, expected to close in the summer of 2025; Kate Spade sales fell 13% in the quarter.
03—Questions
Frequently Asked Questions
How did Tapestry's brands perform in the fiscal third quarter?
Coach was the primary growth driver, with revenue of $1.29 billion, up 13% reported and 15% in constant currency. Kate Spade revenue was $244.9 million, down 13% reported, and Stuart Weitzman revenue was $46.2 million, down 18%.
Did Tapestry raise its fiscal 2025 guidance?
Yes. The company raised revenue guidance to approximately $6.95 billion (4% growth on a reported basis, versus prior guidance of about 3%), raised EPS guidance to the area of $5.00 from $4.85 to $4.90, and raised adjusted free cash flow guidance to approximately $1.3 billion from $1.2 billion.
How much is Tapestry returning to shareholders?
The company continues to expect to return more than $2 billion, or over 100% of adjusted free cash flow, to shareholders in fiscal 2025 through dividends and share repurchases. It declared a quarterly dividend of $0.35 per share payable June 23, 2025, and expects to maintain an annual dividend rate of $1.40 per share.
What is the status of the Stuart Weitzman sale and what did it cost in the quarter?
The sale of the Stuart Weitzman brand is pending and expected to close in the summer of 2025, subject to customary closing conditions. Acquisition and divestiture costs related to the sale and the terminated Capri acquisition totaled $18.6 million pre-tax in the quarter, which reduced EPS by $0.08 along with organizational efficiency costs.
What is Tapestry's debt and liquidity position?
At March 29, 2025, cash, cash equivalents and short-term investments totaled $1.1 billion and total borrowings were $2.7 billion, for net debt of $1.6 billion. The leverage ratio was 1.6x, and the company repaid its April 2025 bonds of $303 million at maturity after quarter-end.
04—Continue