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Coach and Kate Spade parent company Tapestry said revenues rose 5 per cent year-on-year to $7 billion in fiscal 2025, beating company outlook and analyst expectations. Fourth-quarter revenues rose 8 per cent year-on-year to $1.7 billion.
However, shares tumbled 12 per cent in pre-market trading after the company warned of an anticipated $160 million tariff impact to its profits in fiscal 2026.
Coach’s revenues were up 13 per cent to $1.4 billion in Q4, and up 10 per cent to $5.6 billion for the full year. Kate Spade continued to struggle, reporting a 13 per cent fall in revenues to $252.6 million in Q4, and a 10 per cent decline to $1.2 billion for the full year. Tapestry’s sale of Stuart Weitzman to Caleres completed on 4 August.
“Fiscal 2025 was truly a breakout year for Tapestry,” group CEO Joanne Crevoiserat told investors on Thursday morning. “Notably, we also achieved key targets we set at our investor day three years ago, namely to achieve over $5 billion in earnings, return more than $3 billion cumulatively to shareholders, and drive best-in-class total returns. We delivered these results in the context of a rapidly evolving and uncertain macroeconomic landscape, reinforcing that our business and our exceptional teams are resilient, agile and built for growth.”
Coach has posited strong growth quarter after quarter by cultivating a dedicated Gen Z audience. Gen Z is Coach’s North Star, as CEO Todd Kahn told Vogue Business earlier this year — and it’s driving results. Crevoiserat attributes this to the brand’s strong leather goods (the Tabby bag continues to lead), savvy marketing and focus on physical retail. “Our data continues to highlight that Gen Z consumers like to shop in the real world and in-person with engaging experiences,” she said. “As a result, we brought new store concepts, pop-ups, and food and beverage to consumers across the globe, expanding into non-traditional formats and locations to delight consumers and build interest for the brand.”
“This strong traction with younger consumers is our future,” CFO and COO Scott Roe told investors.
Kate Spade, meanwhile, is in the early stages of its turnaround, Crevoiserat told investors. “We are deliberately resetting the brand and backing it with disciplined investments,” she said. “While these actions will pressure revenue and profitability in fiscal year 2026, they are essential to strengthening the brand’s foundation and unlocking sustainable, profitable growth for the long term.”
Tariffs will have a disproportionate impact on Kate Spade, Roe flagged, given the brand’s high exposure in the US.
“We are building the brand for continued healthy gains well into the future. This is our priority and we’re executing behind it. Having said that, we are facing greater than previously expected profit headwinds from tariffs and duties, with the earlier than expected ending of the de minimis exemption being a meaningful factor,” Roe told investors on the call.
He said Tapestry is “leveraging its agile supply chain to optimise its global manufacturing footprint”, to minimise tariff exposure where possible, and working closely with service providers to drive efficiencies. “We’re taking thoughtful actions to mitigate these impacts while continuing to deliver the compelling value, quality and innovation that is foundational to our brands,” Roe continued.
“Even with tariffs, we’re continuing to expand our operating margin this year, and we’re well positioned to fully offset the impact of tariffs over time,” Crevoiserat added.
By region, Tapestry said North America revenues were up 5 per cent year-on-year to $4.5 billion in fiscal 2025. During the year, the group acquired over 6.8 million new customers in North America, fuelled by the growth of Gen Z and millennial cohorts, Crevoiserat said. Coach alone acquired four million new customers in North America this year, with over a million new customers in the fourth quarter, of which nearly 70 per cent were Gen Zs and millennials, she added. “Importantly, these customers are transacting at higher AUR [average unit retail, or the average price at which a product is sold] and have a higher retention rate in the balance of our client base, demonstrating that these relationships are healthy and sticky.”
Full-year revenues in Europe were up 28 per cent to $420.7 million. Total Asia-Pacific full-year revenues were up 2 per cent: Greater China was up 5 per cent to $1 billion, Japan was down 5 per cent to $514.8 million, and Other Asia (including Malaysia, Australia, South Korea and Singapore) was up 8 per cent to $380.3 million.
Looking forward, Tapestry expects revenue to approach $7.2 billion by the end of fiscal 2026, representing mid-single-digit growth. In North America, the company expects revenue to increase mid single digits, and Europe to grow by around 20 per cent. For Asia-Pacific, Tapestry anticipates the same level of growth in China, a high-single-digit decline in Japan and high-single-digit gains in the rest of Asia-Pacific.
“As we look forward, we have proven our ability to navigate a complex and dynamic external backdrop,” Crevoiserat said. “We will continue to execute, leveraging the power of our competitive and structural advantages, our global scale, our compelling value competition, and the strong fundamentals of our business.”
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