Adjustments for Non-Cash Items

Stock-Based Compensation

Changes in Working Capital

Capital Expenditures (CapEx)

Proceeds from / Repayments of Debt

Share Repurchases

Dividend Payments

Net Change in Cash

40a34580a689f4d24223a08dd4a63875c9f090a57597237378a011a630505f75

Tapestry, Inc. is a New York-based company that operates as a house of iconic accessories and lifestyle brands, including Coach, Kate Spade, and Stuart Weitzman. The company is dedicated to innovation and authenticity, offering distinctive products and customer experiences across various channels and geographies **[0001116132-24-000018_tpr-20240629.htm:5]** **[0001116132-24-000018_tpr-20240629.htm:14]** **[0001116132-24-000013_tpr-20240330.htm:33]** **[0001116132-24-000007_tpr-20231230.htm:32]**. Tapestry's revenue is primarily generated through direct-to-consumer channels, including retail stores and e-commerce, as well as wholesale and licensing businesses **[0001116132-24-000018_tpr-20240629.htm:123]** **[0001116132-24-000023_tpr-20240928.htm:8]** **[0001116132-24-000007_tpr-20231230.htm:8]**.

1. **Coach** - A global fashion house known for its accessories and lifestyle collections, contributing significantly to the company's net sales.
2. **Kate Spade** - A global lifestyle brand recognized for its colorful and bold designs, playing a major role in the company's offerings.
3. **Stuart Weitzman** - A luxury footwear brand that adds to the company's diverse portfolio with its high-end shoe collections.

8c6fab3e1b633193dd908c2ef6c8a3c05c0e8b463d67ba50f2e0b130d3bb2afe

| Metric (Revenue by Geographical Segment) [USD Million] | Q2 2023 | Q3 2023 | Q4 2023 | Q1 2024 | Q2 2024 | Q3 2024 | Q4 2024 | Q1 2025 |
|--------------------------------------------------------|---------|---------|---------|---------|---------|---------|---------|---------|
| North America                                          | **1,460.7**  **[0001116132-23-000007_tpr-20221231.htm:11]**  | **904.8**  **[0001116132-23-000013_tpr-20230401.htm:11]**  | **904.8**  **[0001116132-23-000013_tpr-20230401.htm:11]**  | **961.4**  **[0001116132-23-000027_tpr-20230930.htm:10]**  | **1,458.2**  **[0001116132-24-000007_tpr-20231230.htm:10]**  | **874.0**  **[0001116132-24-000013_tpr-20240330.htm:10]**  | **1,020.4**  **[0001140361-24-037418_ef20034103_ex99-1.htm:2]**  | **948.2**  **[0001116132-24-000023_tpr-20240928.htm:9]**  |
| Greater China                                          | **225.9**  **[0001116132-23-000007_tpr-20221231.htm:11]**  | **285.8**  **[0001116132-23-000013_tpr-20230401.htm:11]**  | **285.8**  **[0001116132-23-000013_tpr-20230401.htm:11]**  | **244.6**  **[0001116132-23-000027_tpr-20230930.htm:10]**  | **264.7**  **[0001116132-24-000007_tpr-20231230.htm:10]**  | **270.9**  **[0001116132-24-000013_tpr-20240330.htm:10]**  | **232.4**  **[0001140361-24-037418_ef20034103_ex99-1.htm:2]**  | **234.1**  **[0001116132-24-000023_tpr-20240928.htm:9]**  |
| Other Asia                                             | **238.3**  **[0001116132-23-000007_tpr-20221231.htm:11]**  | **237.3**  **[0001116132-23-000013_tpr-20230401.htm:11]**  | **237.3**  **[0001116132-23-000013_tpr-20230401.htm:11]**  | **206.2**  **[0001116132-23-000027_tpr-20230930.htm:10]**  | **248.2**  **[0001116132-24-000007_tpr-20231230.htm:10]**  | **234.9**  **[0001116132-24-000013_tpr-20240330.htm:10]**  | **86.2**  **[0001140361-24-037418_ef20034103_ex99-1.htm:2]**  | **203.9**  **[0001116132-24-000023_tpr-20240928.htm:9]**  |
| Other (including Europe, Middle East, and royalties)   | **100.5**  **[0001116132-23-000007_tpr-20221231.htm:11]**  | **81.6**  **[0001116132-23-000013_tpr-20230401.htm:11]**  | **81.6**  **[0001116132-23-000013_tpr-20230401.htm:11]**  | **101.0**  **[0001116132-23-000027_tpr-20230930.htm:10]**  | **113.4**  **[0001116132-24-000007_tpr-20231230.htm:10]**  | **102.6**  **[0001116132-24-000013_tpr-20240330.htm:10]**  | **32.4**  **[0001140361-24-037418_ef20034103_ex99-1.htm:2]**  | **121.3**  **[0001116132-24-000023_tpr-20240928.htm:9]**  |
| Japan                                                  | N/A     | N/A     | N/A     | N/A     | N/A     | N/A     | **127.4**  **[0001140361-24-037418_ef20034103_ex99-1.htm:2]**  | N/A     |
| Europe                                                 | N/A     | N/A     | N/A     | N/A     | N/A     | N/A     | **92.3**  **[0001140361-24-037418_ef20034103_ex99-1.htm:2]**  | N/A     |
| Total Revenue                                          | **2,025.4**  **[0001116132-23-000007_tpr-20221231.htm:11]**  | **1,509.5**  **[0001116132-23-000013_tpr-20230401.htm:11]**  | **1,509.5**  **[0001116132-23-000013_tpr-20230401.htm:11]**  | **1,513.2**  **[0001116132-23-000027_tpr-20230930.htm:10]**  | **2,084.5**  **[0001116132-24-000007_tpr-20231230.htm:10]**  | **1,482.4**  **[0001116132-24-000013_tpr-20240330.htm:10]**  | **1,591.1**  **[0001140361-24-037418_ef20034103_ex99-1.htm:2]**  | **1,507.5**  **[0001116132-24-000023_tpr-20240928.htm:9]**  |

e4c0f6abca31865d484b0c4356c8adac80ac6a5de5f63fffdc9d37429864b6b1

| Metric (USD Million) | Q2 2023 | Q3 2023 | Q4 2023 | Q1 2024 | Q2 2024 | Q3 2024 | Q4 2024 | Q1 2025 |
|----------------------|---------|---------|---------|---------|---------|---------|---------|---------|
| Coach                | **1,449.7**  **[0001116132-23-000007_tpr-20221231.htm:27]**  | **1,144.0**  **[0001116132-23-000013_tpr-20230401.htm:28]**  | **4,960.4**  **[0001116132-23-000020_tpr-20230701.htm:11]** **[0001116132-23-000020_tpr-20230701.htm:146]** **[0001116132-23-000020_tpr-20230701.htm:11]**  | N/A     | **1,541.9**  **[0001116132-24-000007_tpr-20231230.htm:30]**  | **1,145.6**  **[0001116132-24-000013_tpr-20240330.htm:38]**  | **969.0** (Gross Profit)  **[0001140361-24-037418_ef20034103_ex99-1.htm:8]**  | **1,170.6**  **[0001116132-24-000023_tpr-20240928.htm:30]**  |
| Kate Spade           | **490.3**  **[0001116132-23-000007_tpr-20221231.htm:27]**    | **297.2**  **[0001116132-23-000013_tpr-20230401.htm:28]**    | **1,418.9**  **[0001116132-23-000020_tpr-20230701.htm:11]** **[0001116132-23-000020_tpr-20230701.htm:146]** **[0001116132-23-000020_tpr-20230701.htm:11]**  | N/A     | **460.4**  **[0001116132-24-000007_tpr-20231230.htm:30]**    | **280.7**  **[0001116132-24-000013_tpr-20240330.htm:38]**    | **194.3** (Gross Profit)  **[0001140361-24-037418_ef20034103_ex99-1.htm:8]**  | **283.2**  **[0001116132-24-000023_tpr-20240928.htm:30]**  |
| Stuart Weitzman      | **85.4**  **[0001116132-23-000007_tpr-20221231.htm:27]**     | **68.3**  **[0001116132-23-000013_tpr-20230401.htm:28]**     | **281.6**  **[0001116132-23-000020_tpr-20230701.htm:11]** **[0001116132-23-000020_tpr-20230701.htm:146]** **[0001116132-23-000020_tpr-20230701.htm:11]**    | N/A     | **82.2**  **[0001116132-24-000007_tpr-20231230.htm:30]**     | **56.1**  **[0001116132-24-000013_tpr-20240330.htm:38]**     | **27.9** (Gross Profit)  **[0001140361-24-037418_ef20034103_ex99-1.htm:8]**   | **53.7**  **[0001116132-24-000023_tpr-20240928.htm:30]**  |
| Total Net Sales      | **2,025.4**  **[0001116132-23-000007_tpr-20221231.htm:27]**  | **1,509.5**  **[0001116132-23-000013_tpr-20230401.htm:28]**  | **6,660.9**  **[0001116132-23-000020_tpr-20230701.htm:11]** **[0001116132-23-000020_tpr-20230701.htm:146]** **[0001116132-23-000020_tpr-20230701.htm:11]**  | N/A     | **2,084.5**  **[0001116132-24-000007_tpr-20231230.htm:30]**  | **1,482.4**  **[0001116132-24-000013_tpr-20240330.htm:38]**  | **1,191.2** (Gross Profit)  **[0001140361-24-037418_ef20034103_ex99-1.htm:8]**  | **1,507.5**  **[0001116132-24-000023_tpr-20240928.htm:30]**  |

4ca9e3c1f041e1318ce6118d953cd946d2a7e8187e630ff724d3d1cddd26379b

1. Given the district court's preliminary injunction on the Capri acquisition and your subsequent appeal, how will a potential deal break impact your capital allocation priorities, and what specific actions are you planning to enhance shareholder value in that scenario?

2. With Kate Spade experiencing revenue declines and profit margin expansion primarily driven by cost management, what immediate steps are you taking to reignite top-line growth for the brand and address any execution challenges?

3. In North America, you reported a 1% sales decline due to a planned decrease in wholesale, which impacted the quarter but is not expected to repeat; can you elaborate on how you plan to drive sequential improvement and achieve modest growth in this region for the rest of the fiscal year?

4. Despite a 5% revenue decline in Greater China, you've increased top-of-funnel marketing investments in the region; how confident are you in seeing a return on these investments given the challenging market conditions, and what metrics are you using to measure success?

5. Inventory levels at quarter-end were 9% above the prior year due to higher in-transits; how are you managing the risk of excess inventory, especially entering the holiday season, and what strategies are in place to align inventory levels with consumer demand?

0dc0ac0f8157272b709e4c29d5f884152ec034845ae139fc80e8395f140215be

Total Revenue [USD, Millions]

Cost of Goods Sold (COGS) [USD, Millions]

SG&A [USD, Millions]

R&D [USD, Millions]

D&A [USD, Millions]

Interest Expense [USD, Millions]

Operating Income (EBIT) [USD, Millions]

Net Income [USD, Millions]

EPS - Basic [USD, Per Share]

EPS - Diluted [USD, Per Share]

73df668e58732199a2e1759bb6cd1abe8b00da8c2ec2decbeac4b21ee1fe4db3

Coach

- Women's Handbags

- Women's Accessories

- Men's

- Other Products

Kate Spade

Stuart Weitzman

Other

North America

International

Total Revenue

6c6758cdf32a1d267f084ee1097cec3caec1355c2d5c32ee6f04ffecda9a5d12

f033636cc9f3c458c2d169e77cccf70e3c187eebc80aa4d3244c1e8662cb65a2

Greater China

Other Asia

- United States

- Japan

- Other Countries

8b7ebfafaabca51e352ca231af3d1438518b0bf24f208dec1fc1fab61455a64e

### Q1 2025 Earnings Call
- **Issued Period**: Q1 2025
- **Guided Period**: FY 2025
- **Guidance**:
  1. **Revenue**: Over **$6.75 billion**, growth of **1% to 2%**  **[TPR_3406610_7]** .
  2. **Operating Margin**: Expansion of over **50 basis points**  **[TPR_3406610_7]** .
  3. **Gross Margin**: Expected to expand  **[TPR_3406610_7]** .
  4. **SG&A Expenses**: Increase roughly in line with revenue growth  **[TPR_3406610_7]** .
  5. **Net Interest Income**: Approximately **$20 million**  **[TPR_3406610_7]** .
  6. **Tax Rate**: Approximately **19%**  **[TPR_3406610_7]** .
  7. **Weighted Average Diluted Share Count**: **238 million shares**  **[TPR_3406610_7]** .
  8. **EPS**: **$4.50 to $4.55**  **[TPR_3406610_7]** .
  9. **Free Cash Flow**: Approximately **$1.1 billion**  **[TPR_3406610_7]** .
  10. **CapEx and Cloud Computing Costs**: **$190 million**  **[TPR_3406610_7]** .
  11. **Sales Growth by Region**: Various growth rates by region  **[TPR_3406610_7]** .
  12. **Quarterly Sales Growth**: Q2 sales growth of **1% to 2%**  **[TPR_3406610_7]** .
  13. **EPS Growth**: Mid-single digits, Q2 EPS of **$1.70**  **[TPR_3406610_7]** .

### Q4 2024 Earnings Call
- **Issued Period**: Q4 2024
- **Guided Period**: FY 2025
- **Guidance**:
  1. **Revenue**: Approximately **$6.7 billion**  **[TPR_3399109_7]** .
  2. **Regional Sales Growth**: Various growth rates by region  **[TPR_3399109_7]** .
  3. **Operating Margin**: Expansion of **50 basis points**  **[TPR_3399109_7]** .
  4. **Gross Margin**: Expansion of **40 basis points**  **[TPR_3399109_7]** .
  5. **SG&A Expenses**: Roughly in line with prior year  **[TPR_3399109_7]** .
  6. **Net Interest Income**: Approximately **$20 million**  **[TPR_3399109_7]** .
  7. **Tax Rate**: Approximately **19%**  **[TPR_3399109_7]** .
  8. **Weighted Average Diluted Share Count**: **238 million shares**  **[TPR_3399109_7]** .
  9. **EPS**: **$4.45 to $4.50**  **[TPR_3399109_7]** .
  10. **Free Cash Flow**: Approximately **$1.1 billion**  **[TPR_3399109_7]** .
  11. **CapEx and Cloud Computing Costs**: **$190 million**  **[TPR_3399109_7]** .
  12. **Sales Shaping for the Year**: Flat in first half, modest growth in second half  **[TPR_3399109_7]** .

### Q3 2024 Earnings Call
- **Issued Period**: Q3 2024
- **Guided Period**: FY 2024
- **Guidance**:
  1. **Revenue**: Over **$6.6 billion**  **[TPR_3387844_7]** .
  2. **EPS**: **$4.20 to $4.25**  **[TPR_3387844_7]** .
  3. **Operating Margin**: Expansion of **110 basis points**  **[TPR_3387844_7]** .
  4. **Gross Margin**: Expansion of **230 basis points**  **[TPR_3387844_7]** .
  5. **SG&A Expenses**: Deleverage of **120 basis points**  **[TPR_3387844_7]** .
  6. **Net Interest Expense**: Approximately **$12 million**  **[TPR_3387844_7]** .
  7. **Tax Rate**: Approximately **20%**  **[TPR_3387844_7]** .
  8. **Weighted Average Diluted Share Count**: **233 million shares**  **[TPR_3387844_7]** .
  9. **Free Cash Flow**: Approximately **$1.1 billion**  **[TPR_3387844_7]** .
  10. **CapEx and Cloud Computing Costs**: **$140 million**  **[TPR_3387844_7]** .
  11. **Regional Sales Guidance**: Various growth rates by region  **[TPR_3387844_7]** .
  12. **Fourth Quarter Specific Guidance**: Sales decline of **1%** at constant currency  **[TPR_3387844_8]** .

### Q2 2024 Earnings Call
- **Issued Period**: Q2 2024
- **Guided Period**: FY 2024
- **Guidance**:
  1. **Revenue**: Approximately **$6.7 billion**  **[TPR_3372448_6]** .
  2. **EPS**: **$4.20 to $4.25**  **[TPR_3372448_6]** .
  3. **Operating Margin**: Expansion of **100 basis points**  **[TPR_3372448_6]** .
  4. **Gross Margin**: Gains of **200 basis points**  **[TPR_3372448_6]** .
  5. **SG&A Expenses**: Deleverage of **100 basis points**  **[TPR_3372448_6]** .
  6. **Net Interest Expense**: Approximately **$20 million**  **[TPR_3372448_6]** .
  7. **Tax Rate**: Approximately **20%**  **[TPR_3372448_6]** .
  8. **Weighted Average Diluted Share Count**: **233 million shares**  **[TPR_3372448_6]** .
  9. **Free Cash Flow**: Approximately **$1.1 billion**  **[TPR_3372448_6]** .
  10. **CapEx and Cloud Computing Costs**: **$190 million**  **[TPR_3372448_6]** .
  11. **Regional Sales Growth**: Various growth rates by region  **[TPR_3372448_6]** .
  12. **Third Quarter Specifics**: Revenue in line with prior year, EPS of **$0.65**  **[TPR_3372448_7]** .

ca18d69993be11838fbbdff18c8bc9e5e86ab85506b09cc7842488f9d3cbde42

| Name               | Position                                           | Start Date       | Short Bio                                                                                                                                                                                                                                                                                                                                                             |
|--------------------|----------------------------------------------------|------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Joanne Crevoiserat | Chief Executive Officer                            | October 2020     | Joanne Crevoiserat has been the **Chief Executive Officer** of Tapestry, Inc. since **October 2020**, after serving as Interim CEO starting in **July 2020**. She joined Tapestry as Chief Financial Officer in **August 2019**. Before her tenure at Tapestry, she was Executive Vice President and Chief Operating Officer at Abercrombie & Fitch Co.  **[0001140361-23-044958_ny20009546x1_def14a.htm:32]** **[0001140361-24-042187_ny20032442x1_def14a.htm:32]** . |
| David Howard       | General Counsel and Secretary                      | June 2020        | David Howard has served as **General Counsel** since **June 2020** and as **Secretary** since **August 2020** at Tapestry, Inc. He previously held the position of Senior Vice President, Deputy General Counsel, and Assistant Secretary from August 2018 through May 2020. Mr. Howard joined the company in January 2011  **[0001140361-24-042187_ny20032442x1_def14a.htm:37]** **[0001140361-23-044958_ny20009546x1_def14a.htm:38]** .                                      |
| Todd Kahn          | Chief Executive Officer and Brand President, Coach | April 2021       | Todd Kahn has served as **Chief Executive Officer and Brand President, Coach** since April 2021. He initially took on the role as Interim Chief Executive Officer and Brand President in July 2020 and has been leading the revenue-generating business units of the brand since March 2020. Kahn joined Tapestry in January 2008  **[0001140361-24-042187_ny20032442x1_def14a.htm:37]** **[0001140361-23-044958_ny20009546x1_def14a.htm:38]** .                              |
| Denise Kulikowsky  | Chief People Officer                               | October 2023     | Denise Kulikowsky has served as the **Chief People Officer** at Tapestry, Inc. since **October 2023**. Before joining Tapestry, she worked at Party City Holdings Inc. from 2018 to 2023, where she held roles as the Chief Human Resources Officer and then as the Chief People and Administrative Officer  **[0001140361-24-042187_ny20032442x1_def14a.htm:37]** **[0001140361-23-044958_ny20009546x1_def14a.htm:44]** .                                                        |
| Scott Roe          | Chief Financial Officer and Chief Operating Officer| August 2022      | Scott Roe has served as the **Chief Financial Officer** since joining Tapestry, Inc. in **June 2021** and as the **Chief Financial Officer and Chief Operating Officer** since **August 2022**. Before joining Tapestry, he was with VF Corporation, where he served as Chief Financial Officer from April 2015  **[0001140361-24-042187_ny20032442x1_def14a.htm:37]** **[0001140361-23-044958_ny20009546x1_def14a.htm:38]** .                                                   |

3739c1a0b138d498ca62d04c1a2e3c1474fedfb017815f6c1c1ea5f7a850d049

| Program Details          | Program 1       |
|--------------------------|-----------------|
| Approval Date            | May 12, 2022  **[0001116132-24-000023_tpr-20240928.htm:47]** |
| End Date/Duration        | No specified end date  **[0001116132-24-000023_tpr-20240928.htm:47]** |
| Total additional amount  | $1.50 billion  **[0001116132-24-000023_tpr-20240928.htm:47]** |
| Remaining authorization amount | $800 million  **[0001116132-24-000023_tpr-20240928.htm:47]** |
| Details                  | Shares repurchased will become authorized but unissued shares, which may be issued in the future for general corporate and other purposes. The company may terminate or limit the program at any time.  **[0001116132-24-000023_tpr-20240928.htm:47]** **[0001116132-24-000023_tpr-20240928.htm:53]** |

666b27276d35c8b4d2db6f7b0ce0f7e7d4bb5165653de9819061198a0bbcc7c6

**Quarterly guidance for Q2 2025:**
- **Sales growth**: 1% to 2%  **[TPR_3406610_7]**  (no prior guidance)  
- **EPS**: $1.70  **[TPR_3406610_7]**  (no prior guidance)

**Annual guidance for FY 2025:**
- **Revenue**: Over $6.75 billion (1% to 2% growth)  **[TPR_3406610_7]**  (raised from approximately $6.7 billion  **[TPR_3399109_7]** )  
- **Operating Margin**: Expansion of over 50 basis points  **[TPR_3406610_7]**  (raised from 50 basis points expansion  **[TPR_3399109_7]** )  
- **Gross Margin**: Expected to expand  **[TPR_3406610_7]**  (no change from 40 basis points expansion  **[TPR_3399109_7]** )  
- **SG&A Expenses**: Increase roughly in line with revenue growth  **[TPR_3406610_7]**  (raised from roughly in line with prior year  **[TPR_3399109_7]** )  
- **Net Interest Income**: Approximately $20 million  **[TPR_3406610_7]**  (no change from $20 million  **[TPR_3399109_7]** )  
- **Tax Rate**: Approximately 19%  **[TPR_3406610_7]**  (no change from 19%  **[TPR_3399109_7]** )  
- **Weighted Average Diluted Share Count**: 238 million shares  **[TPR_3406610_7]**  (no change from 238 million shares  **[TPR_3399109_7]** )  
- **EPS**: $4.50 to $4.55  **[TPR_3406610_7]**  (raised from $4.45 to $4.50  **[TPR_3399109_7]** )  
- **Free Cash Flow**: Approximately $1.1 billion  **[TPR_3406610_7]**  (no change from $1.1 billion  **[TPR_3399109_7]** )  
- **CapEx and Cloud Computing Costs**: $190 million  **[TPR_3406610_7]**  (no change from $190 million  **[TPR_3399109_7]** )  
- **Sales Growth by Region**: Various growth rates by region  **[TPR_3406610_7]**  (no change from various growth rates by region  **[TPR_3399109_7]** )  

c39fb793d493ce581210e551896b22e1575963e0e3b516ac83ae85bec481f511

1. **FY '25 EPS Target**  
   **Q:** Can you talk about your confidence in hitting the FY '25 EPS target of $5 given the current environment?  
   **A:** Management expressed strong confidence in achieving the **$5 EPS target for fiscal '25**, despite a dynamic environment. They have delivered double-digit EPS growth over the past three years, even in a challenged market.  **[TPR_3387844_9]**  They are achieving this through gross margin outperformance and disciplined expense control, with expectations to continue focusing on factors within their control, such as maintaining operational gross margin drivers and tightly managing SG&A.  **[TPR_3387844_9]** 

2. **China Sales Outlook**  
   **Q:** How did China revenue perform this quarter and what's the outlook?  
   **A:** They expect **low single-digit growth for the year in China**, despite macro headwinds and quarterly fluctuations.  **[TPR_3387844_15]**  In Q4, they anticipate China sales to be **down double digits year-on-year** due to lapping last year's post-COVID revenge spending.  **[TPR_3387844_10]** **[TPR_3387844_15]**  However, they remain confident in the long-term potential of the market and continue to invest in brand-building activities.  **[TPR_3387844_15]** 

3. **Gross Margin Outlook**  
   **Q:** What are the drivers of gross margin expansion in Q4 and the runway for operational gross margin?  
   **A:** Management expects to **grow gross margin by almost 200 basis points in Q4**, leading to a **230 basis point increase for the full year**, including about **130 basis points of freight benefits**.  **[TPR_3387844_11]**  They believe gross margin drivers remain intact, with continued investment in businesses, increased marketing spending—now **triple where it was several years ago**—and opportunities on the cost side, including achieving AUC benefits.  **[TPR_3387844_11]** 

4. **North America Demand**  
   **Q:** How is North America demand for the Coach brand progressing, and what are recent trends?  
   **A:** The North American consumer is being more **cautious and choiceful** due to low consumer confidence and sticky inflation.  **[TPR_3387844_11]**  Despite this, innovation is winning, and Coach is delivering higher gross margins and acquiring more new consumers who transact at higher AUR and gross margin.  **[TPR_3387844_11]**  They are planning prudently to build brands for the long term.

5. **Strategy Amid Challenging Macro**  
   **Q:** Are conditions deteriorating enough to cause you to change your strategy and give up some gross margin strength to drive sales growth?  
   **A:** **Absolutely not**; they remain focused on brand building and creating emotional connections with consumers.  **[TPR_3387844_12]**  They offer incredible value and will continue investing in marketing and digital to reach consumers. The "virtuous flywheel" they've developed is working, and they are committed to it.  **[TPR_3387844_12]** 

6. **Innovation Pipeline**  
   **Q:** Can you talk about the innovation pipeline and how you're engaging customers across channels?  
   **A:** Innovation is winning by staying close to consumers through data analytics and consumer insights.  **[TPR_3387844_13]**  They are delivering innovation across all price points, including introducing popular products like the **Tabby** at full price in outlet stores to meet consumer demand.  **[TPR_3387844_13]**  This approach aims to deliver what customers want wherever they shop.

7. **AUR and Pricing Strategy**  
   **Q:** How confident are you in sustaining AUR growth, and have you seen any concerns about luxury brands needing to moderate pricing?  
   **A:** Management is confident in sustaining AUR growth due to understanding customers and delivering value through innovation.  **[TPR_3387844_14]**  The top of the market has moved prices higher, making their offerings more valuable to consumers.  **[TPR_3387844_14]**  They have not seen issues requiring them to defend pricing and believe their capabilities will allow them to continue driving AUR and margin growth.

8. **Kate Spade Performance**  
   **Q:** What is holding back Kate Spade, and is there an impact from Coach's success with younger customers?  
   **A:** At Kate Spade, they are focused on building a stronger and bigger brand with tremendous potential.  **[TPR_3387844_16]**  In the quarter, they **expanded gross margin, operating margin, and profit**, exceeding expectations.  **[TPR_3387844_16]**  They are improving execution by strengthening the core handbag foundation, increasing newness and innovation, enhancing the omnichannel experience, and driving more emotional marketing.  **[TPR_3387844_16]** 

9. **Fiscal '25 Sales Growth and Earnings Goals**  
   **Q:** Is sales growth needed to hit the fiscal '25 earnings goals?  
   **A:** Management expects to grow, with building blocks in place such as acquiring consumers with strong lifetime value, investments in marketing, and an innovation pipeline.  **[TPR_3387844_17]**  They have demonstrated that even on **flat sales**, they have levers to deliver profitability.  **[TPR_3387844_17]**  The combination of growth and efficiency gives them confidence in delivering future earnings goals.

10. **SG&A Control and OpEx Outlook**  
    **Q:** Which levers did you pull to control SG&A, and how should we think about OpEx going forward?  
    **A:** They continue to invest in people, capabilities, and marketing.  **[TPR_3387844_18]**  They are finding leverage throughout the P&L, with about **two-thirds of rents now having a variable component**.  **[TPR_3387844_18]**  They are spending about **9% on marketing**, and this consistent approach is expected to continue going forward.

8d5916dbdab6f3c4181fed29ce32730b53a5269c15d89049475e44832b95498f

| Name                  | Start Date | End Date | Reason for Change |
|-----------------------|------------|----------|-------------------|
| Deloitte & Touche LLP | 2002  **[0001116132-24-000018_tpr-20240629.htm:106]**    | Present  | Current auditor   |
```

534c1c50a9e178a57c05d468765a8024a0de7c24e7950dd9e308b4b294c01dad

bb1ac7edac427e5c83101527d5a828c7794179607a241b0fbd090cc3ad47f637

23794d91c53ae875c8e247d72561e35d9d06ee07c70c9e0dbcc977a6d161504a

- **Tapestry has demonstrated strong gross margin expansion and profitability**, with executives emphasizing their ability to drive profit growth even with flat sales by focusing on operational excellence and disciplined expense control. They have **remade their P&L to a more variable model since 2019**, allowing for investment flexibility during challenging market conditions. [\[5\]] [\[8\]] [\[11\]]
- The company remains **confident in achieving its FY '25 EPS target of $5**, supported by a track record of delivering double-digit EPS CAGR over the last three years and **high single-digit earnings growth on flat sales in fiscal '24**. This confidence stems from consistent gross margin outperformance and strategic investments in marketing and innovation to drive future growth. [\[5\]] [\[8\]] [\[11\]]
- **Coach, Tapestry's largest brand, is showing strong momentum**, with successful product innovation like the **Tabby family nearly doubling versus last year** and increased marketing investments from **3% to over 8% of sales**. The brand expects to end the year with **over $5 billion in revenue**, the first time in over a decade, achieved in a **healthy, sustainable way**. [\[9\]] [\[13\]]

7e5007293e1172bb42ea70bee8a26c5c13945dec0f6f87088edfdb043b30411d

- Total Revenue: $1,507.5 million (−0.4% YoY)  **[0001116132-24-000023_tpr-20240928.htm:9]** **[0001116132-23-000027_tpr-20230930.htm:30]**   
- Net Income: $186.6 million (−4% YoY)  **[0001116132-24-000023_tpr-20240928.htm:9]** **[0001116132-23-000027_tpr-20230930.htm:30]**   
- Coach: $1,170.6 million (+1% YoY)  **[0001116132-24-000023_tpr-20240928.htm:39]** **[0001116132-23-000027_tpr-20230930.htm:25]**   
- Kate Spade: $283.2 million (**−7% YoY**)  **[0001116132-24-000023_tpr-20240928.htm:39]** **[0001116132-23-000027_tpr-20230930.htm:25]**   
- Stuart Weitzman: $53.7 million (+2% YoY)  **[0001116132-24-000023_tpr-20240928.htm:39]** **[0001116132-23-000027_tpr-20230930.htm:25]**   
- North America: $948.2 million (−1% YoY)  **[0001116132-24-000023_tpr-20240928.htm:9]** **[0001116132-23-000027_tpr-20230930.htm:10]**   
- Other Region: $121.3 million (**+20% YoY**)  **[0001116132-24-000023_tpr-20240928.htm:9]** **[0001116132-23-000027_tpr-20230930.htm:10]**   

197bbed984a6f941604d123f27dbdda3e541f645bc24bae89ca3e9e041d0574c

477615022ee7d4603615c36e062519a87f2375aba0c341558418f8cea885fd0c

| Year  | Amount Due (millions) | Debt Type                     | Interest Rate | % of Total Debt                     |
|-------|------------------------|-------------------------------|---------------|--------------------------------------|
| 2025  | $500.0 **[0001116132-24-000023_tpr-20240928.htm:21]**        | 7.050% Senior Notes           | 7.050% **[0001116132-24-000023_tpr-20240928.htm:21]**| 6.8% = ($500.0 / $7,311.7) * 100 **[0001116132-24-000023_tpr-20240928.htm:21]** **[0001116132-24-000023_tpr-20240928.htm:45]** |
| 2025  | $558.3 **[0001116132-24-000023_tpr-20240928.htm:21]**        | 5.350% EUR Senior Notes       | 5.350% **[0001116132-24-000023_tpr-20240928.htm:21]**| 7.6% = ($558.3 / $7,311.7) * 100 **[0001116132-24-000023_tpr-20240928.htm:21]** **[0001116132-24-000023_tpr-20240928.htm:45]** |
| 2026  | $750.0 **[0001116132-24-000023_tpr-20240928.htm:21]**        | 7.000% Senior Notes           | 7.000% **[0001116132-24-000023_tpr-20240928.htm:21]**| 10.3% = ($750.0 / $7,311.7) * 100 **[0001116132-24-000023_tpr-20240928.htm:21]** **[0001116132-24-000023_tpr-20240928.htm:45]** |
| 2027  | $396.6 **[0001116132-24-000023_tpr-20240928.htm:21]**        | 4.125% Senior Notes           | 4.125% **[0001116132-24-000023_tpr-20240928.htm:21]**| 5.4% = ($396.6 / $7,311.7) * 100 **[0001116132-24-000023_tpr-20240928.htm:21]** **[0001116132-24-000023_tpr-20240928.htm:45]** |
| 2027  | $558.3 **[0001116132-24-000023_tpr-20240928.htm:21]**        | 5.375% EUR Senior Notes       | 5.375% **[0001116132-24-000023_tpr-20240928.htm:21]**| 7.6% = ($558.3 / $7,311.7) * 100 **[0001116132-24-000023_tpr-20240928.htm:21]** **[0001116132-24-000023_tpr-20240928.htm:45]** |
| 2028  | $1,000.0 **[0001116132-24-000023_tpr-20240928.htm:21]**      | 7.350% Senior Notes           | 7.350% **[0001116132-24-000023_tpr-20240928.htm:21]**| 13.7% = ($1,000.0 / $7,311.7) * 100 **[0001116132-24-000023_tpr-20240928.htm:21]** **[0001116132-24-000023_tpr-20240928.htm:45]** |
| 2030  | $1,000.0 **[0001116132-24-000023_tpr-20240928.htm:21]**      | 7.700% Senior Notes           | 7.700% **[0001116132-24-000023_tpr-20240928.htm:21]**| 13.7% = ($1,000.0 / $7,311.7) * 100 **[0001116132-24-000023_tpr-20240928.htm:21]** **[0001116132-24-000023_tpr-20240928.htm:45]** |
| 2031  | $558.3 **[0001116132-24-000023_tpr-20240928.htm:21]**        | 5.875% EUR Senior Notes       | 5.875% **[0001116132-24-000023_tpr-20240928.htm:21]**| 7.6% = ($558.3 / $7,311.7) * 100 **[0001116132-24-000023_tpr-20240928.htm:21]** **[0001116132-24-000023_tpr-20240928.htm:45]** |
| 2032  | $500.0 **[0001116132-24-000023_tpr-20240928.htm:21]**        | 3.050% Senior Notes           | 3.050% **[0001116132-24-000023_tpr-20240928.htm:21]**| 6.8% = ($500.0 / $7,311.7) * 100 **[0001116132-24-000023_tpr-20240928.htm:21]** **[0001116132-24-000023_tpr-20240928.htm:45]** |
| 2033  | $1,250.0 **[0001116132-24-000023_tpr-20240928.htm:21]**      | 7.850% Senior Notes           | 7.850% **[0001116132-24-000023_tpr-20240928.htm:21]**| 17.1% = ($1,250.0 / $7,311.7) * 100 **[0001116132-24-000023_tpr-20240928.htm:21]** **[0001116132-24-000023_tpr-20240928.htm:45]** |

fe4ee9a8a73acc20d14469b6dd779c5271a550ac90cd0a1eeb595181db6a1b16

96ba7dcab46616a43487451858f8df189312de525f2eaac4590060850b2393b4

- **Tapestry's Coach brand achieved record annual revenue exceeding $5 billion**, surpassing previous highs from 11 years ago, with **gross margins over 76%**, which is **600 basis points above FY'19**. This success is driven by product innovations like the Tabby and Brooklyn bags, appealing to younger consumers, and strong operational execution, positioning the brand for sustainable long-term growth.  **[TPR_3399109_11]** ,  **[TPR_3399109_14]**
- **Tapestry has strong free cash flow averaging around $1.2 billion**, providing financial flexibility for strategic investments, potential share buybacks, and the capacity to pursue value-enhancing acquisitions like Capri Holdings. Management expresses increased conviction in potential synergies from the deal, which is expected to be accretive to EPS and offer double-digit ROIC over the planning horizon.  **[TPR_3399109_10]** ,  **[TPR_3399109_9]**
- **Management is very bullish on the mid- and long-term growth prospects in China**, viewing it as the best regional opportunity, especially for the Coach brand. Due to its strong positioning and opportunities in second and third-tier cities, Coach offers an attractive value compared to traditional European luxury, which can drive significant growth in the coming years.  **[TPR_3399109_13]** ,  **[TPR_3399109_18]**

469da094dde6bd2e5b19a1e7320e663c9f4058a6ef59e09d9abfbcdfe58bbec8

- **Uncertainty surrounding Tapestry's proposed acquisition of Capri**, due to legal challenges and a pause in integration planning, may hinder the company's strategic growth plans and create operational disruptions.  **[TPR_3406610_9]**
- **Expansion into lower-margin categories** such as ready-to-wear and footwear could negatively impact gross margins, potentially diluting overall profitability.  **[TPR_3406610_18]**
- **Potential increased tariffs on Chinese imports** pose a risk to Tapestry's sourcing mix and cost structure, which may affect margins if tariffs are implemented.  **[TPR_3406610_16]**

f9efdec15fda5392d56d237a76aa4ba6ef3b6833229053de411904d754b771c6

- **Pressure on Q3 results due to tougher comparisons in China**: Tapestry anticipates pressure on top and bottom line figures in the third quarter, primarily due to tougher comparisons from the prior year's strong performance in China. This is expected to affect growth momentum in the near term.  **[TPR_3372448_14]**
- **Underperformance at Kate Spade with execution challenges**: Kate Spade is facing significant challenges, underperforming relative to initial margin goals. The brand's core handbag offerings are underperforming expectations, requiring accelerated progress and improved execution to achieve its ambitions.  **[TPR_3372448_3]** ,  **[TPR_3372448_10]**
- **Softening trends at Capri Holdings could impact acquisition benefits**: Since announcing the acquisition of Capri Holdings, there have been softening trends at Capri, which may affect the expected synergies and financial benefits of the acquisition for Tapestry.  **[TPR_3372448_9]**

cbcb081756ddf14c6f7bf88059a7f7f4ab4eee707d480555cd3a7919e3c81407

- **Tapestry's Coach brand is outperforming the market, growing faster than the category, and acquiring younger customers who transact more frequently at higher Average Unit Retail prices (AUR).** This success is driven by innovative products like the Brooklyn bag and New York collection, which have seen unprecedented demand without cannibalizing existing products like the Tabby family.  **[TPR_3406610_11]** **[TPR_3406610_18]**
- **The company achieved a record gross margin expansion of 280 basis points in Q1 and expects to maintain exceptional margins going forward, even as they expand into new categories.** Structural drivers such as increasing AUR and efficient cost management (AUC) are contributing to ongoing gross margin improvements. Tapestry is confident in its financial position, with strong free cash flow and plans for potential share repurchases, indicating a commitment to shareholder returns.  **[TPR_3406610_11]** **[TPR_3406610_18]** **[TPR_3406610_9]**
- **Tapestry's digital and omnichannel capabilities are a competitive advantage, contributing to growth and higher margins.** Digital sales grew high single digits, offsetting a slight decline in stores, and are accretive to margins. The company is successfully acquiring new, younger customers through digital channels, including in China, supporting long-term brand growth.  **[TPR_3406610_16]**

65d0d333fdb7a933cd163e747ba135f6b6443328912da0d5c616d32fd960d9c8

- **Strong gross margin expansion** across all brands, exceeding expectations with a **300 basis point increase** in the quarter, driven by operational improvements and **pricing power**, and expected to continue in future periods.  **[TPR_3372448_17]**
- **Coach brand's momentum** is fueled by its **expressive luxury** positioning and successful marketing campaigns like **Wear Your Shine**, resulting in the attraction of **1.5 million new customers** in North America, nearly half of whom are **Gen Z and millennials**, supporting growth while maintaining strong margins.  **[TPR_3372448_9]** **[TPR_3372448_16]**
- Tapestry's **data-driven, customer-centric strategies** are effectively driving customer acquisition and engagement, particularly among younger consumers, enhancing **pricing power** and supporting long-term growth across its brands.  **[TPR_3372448_11]**

8b37f371c24efd5fc300975f412a83fd2980b7c2c72a0ee33a6b3b7fa4fb85c6

1. **Commitment to Capri Deal**  
   **Q:** Has Capri's underperformance changed your commitment to the deal?  
   **A:** Despite Capri's recent disappointing results, Tapestry remains firmly committed to the acquisition. Management views the underperformance as an execution opportunity, noting that Michael Kors still has operating income in the **high teens**.  **[TPR_3399109_9]**  The deal remains a strong strategic fit, expected to be accretive to baseline EPS and offer double-digit ROIC over the planning horizon.  **[TPR_3399109_9]** 

2. **Synergy Expectations**  
   **Q:** Is there upside to the synergy targets initially guided?  
   **A:** Tapestry has even more conviction in achieving synergies greater than **$200 million** from the Capri acquisition.  **[TPR_3399109_10]**  While not providing a specific number, management suggests potential upside and plans to provide more details upon closing the deal.  **[TPR_3399109_10]** 

3. **Plan B if Deal Fails**  
   **Q:** What is Plan B if the Capri deal does not go through?  
   **A:** If the acquisition does not proceed, Tapestry highlights its strong free cash flow of approximately **$1.2 billion**.  **[TPR_3399109_10]**  After dividends of around **$325 million**, there would be over **$800 million** of excess cash, which could be used for share buybacks given the current valuation.  **[TPR_3399109_10]** 

4. **Year 1 Accretion Expectations**  
   **Q:** How have expectations for year 1 accretion changed given Capri's performance?  
   **A:** Management acknowledges that Capri's results adjust the starting point for the acquisition but remains confident in accretion.  **[TPR_3399109_17]**  They still see a compelling value creation opportunity and will provide more details on EBITDA, free cash flow, and leverage targets upon closing the deal.  **[TPR_3399109_17]** 

5. **Coach Brand Health**  
   **Q:** How is the Coach brand performing in North America?  
   **A:** Coach delivered slight growth in North America in Q4 at incredible margins, led by the retail full-price business.  **[TPR_3399109_11]**  The brand focuses on expressive luxury targeting Gen Z, product innovation like the successful **Tabby** and new **Brooklyn** bags, and compelling storytelling in marketing.  **[TPR_3399109_11]** 

6. **Gross Margin Outlook**  
   **Q:** What's the gross margin outlook and any change in promotional landscape for 2025?  
   **A:** Gross margin benefits are driven by structural advantages like AUR and continued efficiencies in the supply chain affecting AUC.  **[TPR_3399109_11]**  Management expects operational benefits to continue, with AUR growth contributing to margin expansion.  **[TPR_3399109_14]** 

7. **China Market Outlook**  
   **Q:** What's the outlook for the China market?  
   **A:** Despite macro headwinds, Tapestry grew in fiscal '24 in China and expects the market to be in line with '24 for fiscal '25.  **[TPR_3399109_13]**  The company remains very bullish on China's mid- and long-term prospects, seeing it as the best opportunity for meaningful growth.  **[TPR_3399109_13]** 

8. **Kate Spade Investment**  
   **Q:** Does Kate Spade need further investment to fuel a turnaround?  
   **A:** Tapestry plans to continue investing in Kate Spade to accelerate top-line growth while expanding margins.  **[TPR_3399109_12]**  The focus is on brand building through innovation and holistic marketing campaigns, aiming to improve top-line performance without sacrificing margin progress.  **[TPR_3399109_12]** 

9. **Full-Price vs Outlet Trends**  
   **Q:** What are the trends at full price versus outlet for Coach?  
   **A:** Coach is seeing progress in all channels and is blurring the lines between them.  **[TPR_3399109_15]**  By offering full-price products like the **Tabby** bag in outlets, the brand meets consumers where they are, providing great value across the entire fleet.  **[TPR_3399109_15]** 

10. **Capital Allocation Priorities**  
    **Q:** Which brands and geographies are priorities for investment?  
    **A:** Tapestry rigorously evaluates investments, focusing on brand building and distribution.  **[TPR_3399109_16]**  Opportunities are seen in Asia (particularly China, Japan, and Korea), Europe, and North America, investing where returns are strongest.  **[TPR_3399109_16]** 

11. **Q4 Margin Trends**  
    **Q:** Any takeaways from Q4 margin trends for FY25?  
    **A:** The margin compression at Coach in Q4 was due to timing of expenses, primarily marketing, and isn't indicative of a trend.  **[TPR_3399109_17]**  Management expects Coach's exceptional margins to continue, with opportunities to invest and grow gross margins.  **[TPR_3399109_17]** 

604c6404a8fe4c1ef0ad89c6a83459bd1eb7d1829c809bd4503255387b0d01d1

- **Macro headwinds in China are impacting Tapestry's business**, with no growth expected in the China market in fiscal 2025, potentially limiting overall revenue growth.  **[TPR_3399109_13]**
- **Continued investment is required in Kate Spade to drive top-line growth**, implying potential increases in expenses and uncertain returns, as the brand needs to amplify marketing efforts to connect with consumers.  **[TPR_3399109_12]**
- **The planned acquisition of Capri Holdings brings execution risk**, as Capri has reported "surprising and disappointing" results, and integrating underperforming brands may challenge Tapestry's financial performance.  **[TPR_3399109_10]** **[TPR_3399109_11]**

6468584977030f11e8d6656b707ecc51159ebf26ee39b76a0c9b8ce8947cf590

1. **Deal Update and Capital Allocation Priorities**  
   **Q:** Can you update us on the deal and capital allocation if it fails?  
   **A:** We've filed an appeal as required, and the process is ongoing.  **[TPR_3406610_9]**  Regardless of the outcome, we're focused on our organic business and operating from a position of strength.  **[TPR_3406610_9]**  In a deal break scenario, our capital allocation priorities are: maintaining our investment-grade rating with leverage below **2.5x debt-to-EBITDA**  **[TPR_3406610_9]** ; resuming meaningful share repurchases as an immediate priority due to our compelling buyback opportunity  **[TPR_3406610_9]** ; and disciplined strategic portfolio management, with no near-term M&A expected if the deal doesn't close.  **[TPR_3406610_9]** 

2. **Share Buyback Capacity**  
   **Q:** What's the specific buyback capacity if the deal doesn't proceed?  
   **A:** We have significant capacity due to strong free cash flow and essentially zero net debt.  **[TPR_3406610_10]**  While we aim to maintain leverage below **2.5x debt-to-EBITDA** and our investment-grade rating, we won't push the upper limit in this environment.  **[TPR_3406610_10]**  All vehicles, including ASRs, are on the table.  **[TPR_3406610_10]**  We'll provide more specifics if the deal doesn't close.  **[TPR_3406610_10]** 

3. **China Sales Performance**  
   **Q:** How did China perform this quarter, and what's the outlook?  
   **A:** In Greater China, we delivered at the top end of our guidance range, down **5%**.  **[TPR_3406610_10]**  Our performance outpaced the industry, which declined over **20%**.  **[TPR_3406610_10]**  We saw sequential improvement through the quarter and into Q2, with positive digital trends.  **[TPR_3406610_10]**  We remain confident in the long-term opportunity in China and are investing accordingly.  **[TPR_3406610_10]** 

4. **Coach's Market Share Gains**  
   **Q:** What drove Coach's outperformance and market share gains?  
   **A:** Coach is winning due to innovation, emotional connection with consumers, and disciplined brand building.  **[TPR_3406610_11]**  Despite the handbag category declining in Q1, we believe we can grow both now and in the future.  **[TPR_3406610_11]**  Investments in capabilities and understanding customer needs are fueling our success.  **[TPR_3406610_11]** 

5. **Gross Margin Outlook**  
   **Q:** What's the outlook for gross margins this year and beyond?  
   **A:** Gross margin was up **280 basis points** in Q1.  **[TPR_3406610_11]**  We expect gross margins to increase for the year, driving about **50 basis points** of operating margin expansion.  **[TPR_3406610_11]**  Structural drivers include AUR (average unit retail) increases through brand investment and AUC (average unit cost) reductions via supply chain efficiencies.  **[TPR_3406610_11]** 

6. **Kate Spade's Turnaround**  
   **Q:** Why is Kate Spade declining, and what's the stabilization timeline?  
   **A:** We're confident in Kate Spade's potential.  **[TPR_3406610_11]**  Opportunities lie in brand building and supporting innovation.  **[TPR_3406610_11]**  We've welcomed a new CEO, Eva, to sharpen our strategy and execution.  **[TPR_3406610_11]**  Immediate actions include enhancing marketing, storytelling, styling, and SKU editing.  **[TPR_3406610_11]**  We don't expect growth this fiscal year but anticipate trends to remain consistent.  **[TPR_3406610_11]** 

7. **North America Growth**  
   **Q:** What's the outlook for growth in North America?  
   **A:** North America trends were better than expected in Q1.  **[TPR_3406610_15]**  Underlying direct-to-consumer business shows slight growth as wholesale normalizes.  **[TPR_3406610_15]**  We expect the wholesale headwinds from Q1 not to repeat, supporting modest growth this year.  **[TPR_3406610_15]** 

8. **Average Unit Retail (AUR) Increases**  
   **Q:** How is AUR growing, and what's driving it?  
   **A:** AUR grew mid-single digits globally, led by North America.  **[TPR_3406610_14]**  Drivers include less discounting, strong demand for new products like the Brooklyn and Tabby bags, and effective upper funnel marketing.  **[TPR_3406610_14]**  We expect AUR growth to continue throughout the year.  **[TPR_3406610_14]** 

9. **Channel Performance and Digital Growth**  
   **Q:** Did digital sales outpace stores, and what's the distribution outlook?  
   **A:** Our omnichannel business was in line with last year, with digital growth offsetting slight declines in stores.  **[TPR_3406610_16]**  We're focused on meeting customers where they are, and digital channels are accretive to margins.  **[TPR_3406610_16]**  We're leveraging our capabilities to drive customer acquisition and engagement.  **[TPR_3406610_16]** 

10. **Tariff Impact and Sourcing Strategy**  
    **Q:** How might tariffs impact you, and what's your sourcing mix in China?  
    **A:** We've diversified our sourcing, with China now less than **10%** of our manufacturing.  **[TPR_3406610_16]**  We're experienced in managing supply chain changes and have strategies to mitigate potential tariff impacts.  **[TPR_3406610_16]** 

b7e4610c78976de1bdacbb95864438dd9fd3ac75e36576b004c025af92396bde

1. **Capri Acquisition Update**  
   **Q:** Has the softening trends at Capri changed your thinking on the acquisition?  
   **A:** We remain excited about acquiring Capri, recognizing opportunities to unlock value by improving execution and leveraging the Tapestry platform.  **[TPR_3372448_9]**  The acquisition economics remain strong, and we're making progress towards closing in this calendar year, unchanged from our prior outlook.  **[TPR_3372448_9]**  Our integration planning continues, and we gain confidence in areas where we can add value.  **[TPR_3372448_9]** 

2. **Fiscal 2025 Targets**  
   **Q:** Any updates on fiscal '25 organic goals, margins, and EPS targets?  
   **A:** We reaffirm our confidence in achieving the **$4.65** EPS target for fiscal '25, which was adjusted from **$5** due to the lack of share repurchases.  **[TPR_3372448_10]**  While brand performances have evolved differently, with Coach outperforming, our disciplined capital allocation and operational excellence support our confidence in these goals.  **[TPR_3372448_10]** 

3. **Gross Margin Drivers**  
   **Q:** What are the multiyear gross margin drivers beyond freight recovery?  
   **A:** Beyond this year's freight benefits, our gross margin expansion is driven by pricing power, operational improvements, and disciplined cost management.  **[TPR_3372448_11]**  Reinvesting in capabilities that deepen our consumer understanding strengthens our pricing power long term.  **[TPR_3372448_11]**  This approach allows us to increase profitability while reinvesting in the business.  **[TPR_3372448_11]** 

4. **China Market Outlook**  
   **Q:** What's your view on the health of the Chinese consumer and Coach's strength in China?  
   **A:** We see a slower pace of recovery in China but remain confident in its long-term potential.  **[TPR_3372448_12]**  In the second quarter, our China business grew **19%**, in line with expectations.  **[TPR_3372448_12]**  We project mid-single-digit growth for the fiscal year, unchanged from prior outlook.  **[TPR_3372448_12]**  Strong brand positioning and consumer desire drive our success in the market.  **[TPR_3372448_12]** 

5. **Revenue Guidance and China Impact**  
   **Q:** With flat revenue guidance for Q3, what are you seeing, especially in China?  
   **A:** The third quarter faces tougher comparables due to prior-year "revenge spending" in China.  **[TPR_3372448_14]**  Despite quarter-to-quarter noise, we're maintaining our mid-single-digit growth expectations for China.  **[TPR_3372448_14]**  Overall, we beat expectations in Q2 and raised our full-year outlook.  **[TPR_3372448_14]** 

6. **North America Outlook**  
   **Q:** What's driving confidence in stronger growth in North America handbags, particularly for Coach and Kate Spade?  
   **A:** Our Q2 North America business was flat year-over-year but above expectations, driven at higher margins.  **[TPR_3372448_13]**  Consumers are responding to newness, innovation, and elevated brand messaging.  **[TPR_3372448_13]**  We continue to manage inventory well and focus on healthy growth.  **[TPR_3372448_13]** 

7. **Kate Spade Performance**  
   **Q:** What changes are being made at Kate Spade to improve growth and margins?  
   **A:** We're focusing on three areas: strengthening the core handbag foundation, enhancing the omnichannel customer experience (including launching outlet.com), and investing in emotional marketing to fuel brand heat.  **[TPR_3372448_15]**  Despite sales pressure, we've expanded gross margin, operating margin, and profit at Kate Spade.  **[TPR_3372448_15]**  We see a path to mid-teens operating margins over time.  **[TPR_3372448_15]** 

8. **Customer Acquisition Strategies**  
   **Q:** How does Tapestry's platform support product innovation and customer acquisition?  
   **A:** Our customer obsession drives growth by leveraging data and insights across the value chain.  **[TPR_3372448_11]**  We conduct extensive research to understand customers deeply, informing brand positioning, product development, pricing, and marketing.  **[TPR_3372448_11]**  This approach has attracted **2.5 million** new customers last quarter, nearly half being Gen Z and Millennials.  **[TPR_3372448_11]** 

9. **Tabby Platform and AUR Drivers**  
   **Q:** What's ahead for the Tabby platform, and what's driving AUR growth?  
   **A:** Tabby is a multi-year platform elevated through continuous innovation.  **[TPR_3372448_16]**  Recent launches like the Quilted Tabby are performing well.  **[TPR_3372448_16]**  AUR growth is driven by a combination of higher initial pricing and disciplined discounting.  **[TPR_3372448_16]**  Coachtopia, while not yet material financially, enhances brand desirability and has potential for significant growth.  **[TPR_3372448_16]** 

10. **Gross Margin Beat and Freight Outlook**  
    **Q:** What drove the gross margin beat, and what are the freight impacts ahead?  
    **A:** We achieved over **300 basis points** of gross margin expansion in Q2, with about **170 basis points** from freight benefits.  **[TPR_3372448_17]**  We expect freight benefits to moderate but remain positive in the second half, contributing about **120 basis points** to full-year gross margin expansion.  **[TPR_3372448_17]**  Operational improvements and pricing power also drive margin growth.  **[TPR_3372448_17]** 

11. **Coach Brand Momentum**  
    **Q:** How confident are you in maintaining the momentum at Coach?  
    **A:** We delivered strong results at Coach, with strategies like expressive luxury targeting the timeless Gen Z consumer.  **[TPR_3372448_9]**  Campaigns like "Wear Your Shine" and product innovation with the Tabby family are driving meaningful growth with new and younger customers.  **[TPR_3372448_9]**  Our "cogenomic" model creates a virtuous flywheel enhancing lifetime customer value.  **[TPR_3372448_9]** 

bc2fa4d9b08ecf12a2b6a3d06cab796830552d2bb79c08c5917d4698fdb1ceb9

Tapestry Inc (TPR)

Financials