American fashion holding company has reported net sales of $1.58 billion, marking a 7 per cent year-over-year (YoY) increase, or 8 per cent growth on a constant currency basis in the third quarter (Q3) of fiscal 2025 (FY25) ended March 29, with a 150-basis point (bps) headwind from US dollar appreciation.
The gross profit of the company increased to $1.21 billion, resulting in a gross margin of 76.1 per cent, an improvement of approximately 140 bps from the prior year’s 74.7 per cent.
The business delivered a compelling omni-channel experience, with direct-to-consumer (DTC) revenue up 9 per cent in constant currency, including a mid-teens percentage rise in digital and a mid-single digit growth in global brick-and-mortar sales, supported by increasing profitability across all channels, Tapestry said in a press release.
Innovation remained a key focus, with strong handbag sales and a mid-teens percentage increase in average unit retail (AUR) at Coach, highlighting product excellence and consumer appeal. The company continued to leverage its agile, global supply chain to drive innovation, ensure value delivery, and manage inventory effectively, supporting its accelerated growth and margin expansion.
The net income stood at $203 million, with GAAP earnings per diluted share of $0.95 and non-GAAP earnings of $220 million or $1.03 per share.
In Q3 FY25, the company strengthened its customer base by acquiring over 1.2 million new customers in North America, with Gen Z and Millennial consumers accounting for approximately two-thirds of this growth, added the release.
The company gained 9 per cent in North America, 35 per cent in Europe, and 4 per cent in total Asia Pacific (APAC).
Brand-wise, Coach achieved a 13 per cent revenue increase YoY, or 15 per cent on a constant currency basis, driven by continued consumer demand and product innovation. In contrast, Kate Spade experienced a 13 per cent decline in revenue (12 per cent in constant currency), reflecting ongoing brand repositioning efforts. Meanwhile, Stuart Weitzman saw revenue decrease of 18 per cent YoY, or 17 per cent in constant currency.
“Our third quarter outperformance reinforces our position of strength. We accelerated top and bottom-line growth and raised our outlook for the fiscal year, demonstrating the power of brand building and our connections with consumers around the world. Importantly, while the external backdrop is complex, our vision remains clear,” said Joanne Crevoiserat, chief executive officer (CEO) of Tapestry, Inc.
“We maintain a bias for action and will harness our competitive advantages, including our global scale, compelling value, and strong fundamentals, to adapt and win in any environment. We are confident in our future and the meaningful opportunity to deliver durable growth and shareholder value,” added Crevoiserat.
For full FY25, Tapestry anticipates revenue of approximately $6.95 billion, reflecting a 4 per cent YoY increase, which includes a currency headwind of nearly 50 bps—surpassing its earlier forecast of around 3 per cent growth.
The operating margin is still expected to expand by approximately 100 bps from the previous year. Net interest expense is projected to be around $25 million, improved from the earlier estimate of $35 million. Earnings per diluted share are forecast to reach around $5, marking a high-teens percentage increase over the previous year and exceeding the earlier guidance of $4.85 to $4.90, added the release.
Fibre2Fashion News Desk (SG)
