Coach-owner Tapestry “outperformed expectations” for the first quarter of the year, according to CEO Joanne Crevoiserat, who said the results showcased “the brand magic and operational excellence that fuel our strategic growth agenda”.

For the quarter ended September 28, 2024, the company’s net sales totaled 1.51 billion dollars, in-line with the year prior, while its gross profit came to 1.13 billion dollars, with a gross margin of 75.3 percent. Operating income was 252 million dollars on a reported basis, alongside an operating margin of 16.7 percent, while net income amounted to 187 million dollars, with earnings per diluted share of 79 cents.

Out of its portfolio brands, Stuart Weitzman reported the biggest increase in sales of 2 percent on a reported basis, amounting to 53.7 million dollars for the period. Coach followed with an uptick of 1 percent to 1.170.6 million dollars, while sales at Kate Spade fell -7 percent to 283.2 million dollars.

Europe sees strongest sales increase, Japan declines 8 percent

Europe was the strongest region overall for Tapestry, welcoming a sales uptick of 27 percent on a reported basis, followed by “other Asia”, where sales rose 11 percent. Japan experienced the sharpest drop in sales over the period, decreasing -8 percent, while in Greater China sales fell -4 percent and in North America, they fell -1 percent.

Tapestry did note, however, that it had generated strong cash flow from operating activities of 120 million dollars and has a free cash flow of 94 million dollars, “fueling the company’s long-term growth agenda and shareholder return programme via its dividend”.

For the fiscal year 2025, Tapestry has now opted to raise its outlook, provided on a non-GAAP basis, with revenue now expected to come in at over 6.75 billion dollars, representing a growth rate of around 1 to 2 percent versus the year prior. Its operating margin is anticipated to see an expansion of over 50 basis points, while its net interest income is expected to come to around 20 million dollars.

The company noted that there had been no impact on revenue, interest or earnings related to the proposed acquisition of Capri Holdings Limited, which is currently facing legal obstacles.