Tapestry (TPR) Q2 2025 earnings summary

Executive summary

• Achieved record Q2 revenue of $2.2B, up 5–5.3% year-over-year, led by 10–11% growth at Coach, and raised full-year 2025 outlook.

• Diluted EPS was $1.38 (GAAP) and $2.00 (non-GAAP), both exceeding guidance, with EPS up 23% year-over-year.

• Welcomed 2.7M new North American customers, over half Gen Z/Millennials, with high retention rates.

• Returned over $2B to shareholders through dividends and a $2B accelerated share repurchase program, reducing shares by 28.4M.

• The Capri Holdings acquisition was terminated, resulting in $197.6M in pre-tax charges, including loss on extinguishment of debt.

Financial highlights

• Q2 net sales: $2.20B (+5–5.3% YoY); gross margin: 74.4% (+280bps YoY); operating income: $492.8M (GAAP), $548M (non-GAAP).

• Net income: $310M (GAAP), $450M (non-GAAP); diluted EPS: $1.38 (GAAP), $2.00 (non-GAAP).

• Adjusted free cash flow: $890–$891M for Q2; CapEx and cloud costs: $39M for the quarter.

• Europe revenue up 42%, North America up 4%, Greater China up 2%, Other Asia up 11%, Japan down 5%.

• Coach: $1.71B revenue (+10–11% YoY), 77.1% gross margin; Kate Spade: $416M (–10% YoY); Stuart Weitzman: $70M (–15–16% YoY).

Outlook and guidance

• Fiscal 2025 revenue expected to exceed $6.85B, up ~3% year-over-year, with a 100bps operating margin expansion.

• EPS guidance raised to $4.85–$4.90, representing 13–14% growth; adjusted free cash flow forecasted at ~$1.2B.

• CapEx and cloud costs expected at $170M for FY25.

• Assumes no impact from terminated Capri Holdings acquisition, embeds 10% China tariff from Feb 2025 with immaterial effect.

• Europe projected to grow ~30%, other Asia high single digits, North America up slightly, Greater China low single digits.