DEF: Tapestry Reports Record FY25, Unveils Amplify Growth Plan

Tapestry, Inc. achieved record performance in fiscal year 2025, surpassing key financial targets and introducing its new three-year Amplify growth agenda focused on global expansion and consumer connection.

Summary

• Fiscal year 2025 was a breakout year for Tapestry, marked by record topand bottom-line results and robust free cash flow.
• Achieved ambitious three-year targets set at Investor Day: over $5 in adjusted earnings per share and over $3 billion cumulatively returned to stockholders.
• Acquired 6.8 million new customers in North America, with strong representation from Gen Z consumers and increasing retention rates.
• Coach brand experienced its strongest year on record, driven by brand-building capabilities and focus on Gen Z consumers.
• Kate Spade is undergoing strategic investment and a reset for long-term growth, acknowledging that this process will take time.
• Unveiled the new three-year 'Amplify' growth agenda, focusing on building emotional connections, fueling fashion innovation, delivering compelling experiences for global growth, and igniting the power of its people.
• Expects to return $4 billion to shareholders through dividends and share repurchases over the three-year planning horizon.
• Completed the previously announced sale of the Stuart Weitzman business in August 2025.
• Achieved the goal of sourcing 99% of leather from Goldand Silver-rated Leather Working Group tanneries two years ahead of schedule.
• Reduced Scope 1 & 2 GHG emissions by 84% from the fiscal year 2021 baseline.
• Employees completed over 65,000 volunteer hours in FY25, contributing to over 248,000 hours since 2019, towards a 500,000-hour 2030 target.
• The Coach Foundation's Dream It Real program funded over 8,000 scholarships to date, advancing towards a goal of 10,000 scholarships globally by 2030.
• Recognized for leading workplace practices with over 50 awards in fiscal year 2025.

Sentiment

Score: 8

Explanation: The filing conveys a highly positive outlook, emphasizing record performance, achievement of long-term strategic targets, and a robust future growth plan. Despite a GAAP EPS decline due to an impairment charge, the company's focus on strong non-GAAP metrics, significant shareholder returns, and strategic initiatives for brand growth and customer acquisition indicates strong confidence and positive momentum.

Positives

• Achieved record topand bottom-line results in fiscal year 2025, demonstrating strategic success.
• Surpassed key three-year targets: over $5 in adjusted earnings per share and over $3 billion cumulatively returned to stockholders.
• Strong customer acquisition with 6.8 million new customers in North America, including significant Gen Z representation and increasing retention rates.
• Coach brand recorded its strongest year ever, driven by effective brand-building and consumer focus.
• Introduced a clear and focused three-year 'Amplify' growth agenda aimed at global expansion and new generations.
• Committed to returning $4 billion to shareholders through dividends and share repurchases over the next three years, underscoring balance sheet strength.
• Achieved 99% leather sourcing from Goldand Silver-rated Leather Working Group tanneries two years ahead of schedule.
• Reduced Scope 1 & 2 GHG emissions by 84% from the FY2021 baseline.
• Significant employee engagement with over 65,000 volunteer hours in FY25 and progress towards scholarship goals.
• Received over 50 workplace awards in FY25, indicating strong corporate culture and practices.
• Reported a 1-year Total Shareholder Return (TSR) of 108.35% and a 3-year TSR of 209.57%.
• Non-GAAP diluted earnings per share increased by 18.9% in fiscal year 2025.
• Non-GAAP net sales increased by 5.3% in fiscal year 2025.

Negatives

• GAAP diluted earnings per share decreased by 76.5% in fiscal year 2025, primarily due to an $854.8 million impairment charge related to Kate Spade goodwill.
• The Kate Spade brand requires significant investment and a reset for long-term growth, acknowledging that this process will 'take time' amidst the current economic backdrop.

Risks

• Impact of international trade disputes and potential changes to international trade agreements, including new or increased tariffs.
• Impact of economic conditions, recession, and inflationary measures.
• Exposure to international risks, including currency fluctuations and changes in economic or political conditions in markets where products are sold or sourced.
• Ability to retain the value of brands and respond to changing fashion and retail trends in a timely manner, including execution of e-commerce and digital strategies.
• Impact of tax and other legislation.
• Ability to successfully implement the initiatives under the 2028 Amplify growth strategy.
• Effect of existing and new competition in the marketplace.
• Ability to successfully identify and implement any sales, acquisitions, or strategic transactions, including achieving intended benefits, cost savings, and synergies from acquisitions.
• Ability to control costs.
• Effect of seasonal and quarterly fluctuations on sales or operating results.
• Risk of cybersecurity threats and privacy or data security breaches.
• Ability to satisfy outstanding debt obligations or incur additional indebtedness.
• Risks associated with climate change and other corporate responsibility issues.
• Ability to protect against infringement of trademarks and other proprietary rights.
• Impact of pending and potential future legal proceedings.
• Other risk factors set forth in the Company's Annual Report on Form 10-K for fiscal year ended June 28, 2025.

Future Outlook

The company's 'Amplify' growth agenda is expected to drive continued durable, profitable growth over the three-year planning horizon, achieving mid-single-digit revenue growth and operating margin expansion annually, and delivering double-digit earnings per share growth in fiscal years 2027 and 2028. Tapestry also expects to return $4 billion to shareholders through dividends and share repurchases over this period.

Management Comments

• Fiscal year 2025 was truly a breakout year for Tapestry – a fitting culmination of a three-year journey marked by bold moves, meaningful progress and unwavering commitment to our futurespeed strategy.
• Our ability to act with both discipline and agility has proven to be more than just strengths – they are enduring competitive advantages that have allowed us to not only weather the environment, but to win in it.
• Our success is rooted in the relentless focus on building lasting customer relationships.
• Coach is redefining what’s possible when you blend disciplined brand-building – driven by data and innovation – with consumer obsession.
• We are testing more, learning faster and maintaining a relentless focus on operational discipline and sustained innovation to unlock Kate Spade’s significant runway for growth.
• We are confident our strategies will deliver compounding financial returns, and significant value for our people, our consumers, our brands and our shareholders for years to come.

Industry Context

Tapestry operates within a retail landscape influenced by economic headwinds and shifting consumer behaviors, particularly among Gen Z. The company's 'Amplify' strategy directly addresses these trends by focusing on new geographies, new generations of consumers, emotional connections, and fashion innovation, positioning itself to compete effectively in the global luxury and lifestyle brand market.

Comparison to Industry Standards

• Achieved 'best-in-class total returns' over a three-year period.
• Independent director total compensation was positioned below the median of Tapestry’s peer group, leading to an increase in target annual equity grant value to align with the median.
• Tapestry’s use of stock options for directors was noted as 'unusual' relative to its peer group and the broader market, leading to a shift to 100% RSU grants for directors.
• The peer group for executive compensation benchmarking includes: Compagnie Financière Richemont SA, The Gap, Inc., The Estée Lauder Companies Inc., Lululemon Athletica Inc., V.F. Corporation, PVH Corp., Williams-Sonoma, Inc., Ralph Lauren Corporation, Levi Strauss & Co., Victoria’s Secret & Co., Coty Inc., Urban Outfitters, Inc., American Eagle Outfitters, Inc., Under Armour, Inc., and Capri Holdings Limited.
• Secondary reference points for executive talent include foreign-listed and private companies such as Burberry Group plc, Hermes International, J. Crew Group, Inc., Kering S.A., and LVMH.
• The PRSU Peer Group for Relative TSR measurement includes companies from the S&P 1500 Composite and Euronext Indexes in Apparel, Accessories and Luxury Goods, such as adidas AG, Burberry, Moncler, and PVH Corp.

Management Changes

Corporate Governance

Stakeholder Impact

• **Shareholders**: Positive impact from record financial performance, achievement of long-term targets, commitment to $4 billion in shareholder returns, strong Total Shareholder Return (TSR), and enhanced corporate governance practices.
• **Employees**: Positive impact from investments in leadership development, fostering a growth mindset, significant volunteer hour contributions, and recognition for leading workplace practices.
• **Customers**: Focus on building emotional connections, fueling fashion innovation, product excellence, and delivering compelling experiences to drive global growth.
• **Suppliers**: Commitment to ethical and sustainable sourcing, evidenced by 99% of leather from Goldand Silver-rated Leather Working Group tanneries.
• **Community/Environment**: Positive impact through significant reduction in GHG emissions and funding of scholarships via the Coach Foundation's Dream It Real program.

Next Steps

• Hold the 2025 Annual Meeting of Stockholders virtually on November 13, 2025.
• Elect 10 directors at the Annual Meeting.
• Stockholders to vote on the ratification of Deloitte & Touche LLP as the independent registered public accounting firm for fiscal year 2026.
• Stockholders to cast an advisory vote to approve the company's executive compensation.
• Implement the 'Amplify' three-year growth agenda, focusing on building emotional connections, fueling fashion innovation, delivering compelling experiences for global growth, and igniting the power of its people.
• Return $4 billion to shareholders through dividends and share repurchases over the three-year planning horizon.
• Drive mid-single-digit revenue growth and operating margin expansion annually.
• Deliver double-digit earnings per share growth in fiscal years 2027 and 2028.
• The HR Committee will revisit the peer group composition in fiscal year 2027.
• Continue discussions with stockholders on executive compensation and governance matters.

Key Dates

Recommendation

The filing highlights Tapestry's strong operational and financial performance in fiscal year 2025, achieving record topand bottom-line results (on a non-GAAP basis) and exceeding ambitious three-year targets. The company's 'Amplify' growth agenda provides a clear strategic roadmap for future expansion, targeting mid-single-digit revenue growth, operating margin expansion, and double-digit EPS growth in FY27-28. The commitment to return $4 billion to shareholders over the next three years, coupled with a robust 1-year TSR of 108.35% and 3-year TSR of 209.57%, demonstrates significant shareholder value creation. While the GAAP EPS was impacted by a non-cash impairment charge, the underlying business health and strategic direction are strong, making Tapestry an attractive investment for long-term growth.

Keywords

Tapestry, Coach, Kate Spade, Luxury Goods, Retail, Fashion, SEC Filing, Financial Results, Growth Strategy, Amplify Plan, Shareholder Return, Corporate Governance, Executive Compensation, ESG, Sustainability, Gen Z, Digital Strategy, Risk Management, Proxy Statement