Tapestry (TPR) Q1 2025 earnings summary

Executive summary

• First quarter revenue reached $1.51 billion, exceeding expectations, with record non-GAAP EPS of $1.02, a 10% increase year-over-year, and strong operational execution driven by brand strength and disciplined management.

• Gross margin expanded by 280 basis points, supported by operational improvements and lower freight costs, with free cash flow of $94 million.

• Approximately 1.4 million new customers were acquired in North America, with continued topline gains at Coach and strong growth in Europe.

• The Capri Holdings acquisition remains blocked by a preliminary FTC injunction; integration planning is paused, and legal proceedings are ongoing.

• Raised full-year outlook due to Q1 outperformance, reflecting confidence in organic growth and brand momentum.

Financial highlights

• Net revenue for the quarter was $1.51 billion (flat year-over-year), with gross profit at $1.13 billion (75.3% margin) and operating income at $285 million (18.9% margin, non-GAAP).

• Coach net revenue grew 2% to $1.17 billion, Kate Spade declined 6% to $283 million, Stuart Weitzman grew 2% to $54 million.

• Free cash flow for the quarter was $94 million; cash and short-term investments totaled $7.3 billion at quarter-end.

• Inventory increased to $1.03 billion, up 9% year-over-year, reflecting higher in-transits.

• Dividend payments totaled $81.4 million; no share repurchases in the quarter due to the Capri deal.

Outlook and guidance

• Fiscal 2025 revenue expected to exceed $6.75 billion, up 1–2% year-over-year, with operating margin expansion of over 50 basis points anticipated.

• EPS guidance raised to $4.50–$4.55, representing mid-single-digit growth.

• Free cash flow projected at approximately $1.1 billion, with CapEx and cloud computing costs around $190 million.

• Dividend maintained at $1.40 per share, with $325 million expected to be returned to shareholders.

• Guidance assumes no impact from Capri Holdings acquisition and stable macroeconomic conditions.