Tapestry exceeds expectations in fourth quarter despite high losses

The US fashion group Tapestry Inc. slipped deep into the red in the fourth quarter of the 2024/25 financial year due to negative one-off effects. Overall, the results, which the company published on Thursday, exceeded market expectations.

In the final quarter, which ended on June 28, group revenue amounted to 1.72 billion dollars. This represents an 8 percent increase compared to the same period of the previous year and a new record value.

The group owed this unexpectedly significant growth to its main brand, Coach. Coach's revenues increased by 14 percent to just under 1.43 billion dollars. The other two labels, however, suffered considerable losses. Kate Spade's revenue fell by 13 percent to 252.6 million dollars. Revenue at Stuart Weitzman, whose sale to the footwear group Caleres was completed a few days ago, shrank by 10 percent to 45.5 million dollars.

One-off charges cause deep red figures

The group was able to increase its gross margin. However, high one-off charges weighed on the result. These included extensive impairments at Kate Spade, expenses for restructuring measures, and costs associated with the sale of Stuart Weitzman.

As a result, Tapestry posted a net loss of 517.1 million dollars in the fourth quarter, compared to a profit of 159.3 million dollars in the same period last year.

Adjusted for one-off effects, net profit reached 223 million dollars. This exceeded the corresponding prior-year figure of 217 million dollars and analysts' expectations.

Tariff increases dampen profit forecast

In the 2024/25 financial year as a whole, group revenue was 7.01 billion dollars, which represents a 5 percent increase compared to the previous year. Net profit fell from 816 million dollars to 183.2 million dollars due to the high one-off charges.

For the current 2025/26 financial year, management expects revenue growth to approximately 7.2 billion dollars, despite the sale of Stuart Weitzman. Diluted earnings per share, adjusted for one-off effects, which were 5.10 dollars last year, are expected to increase to between 5.30 and 5.45 dollars. This earnings forecast fell short of market expectations. Management attributed the cautious target to the expected burden of higher tariffs.

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