On August 14, New York-based global company Tapestry, Inc. announced its fiscal 2025 fourth quarter and full-year results, reporting record annual revenue of $7 billion, fueled by robust growth at its flagship brand Coach. However, the company’s net income was significantly pressured by large impairment charges related to the underperformance of its Kate Spade brand.
Double-Digit Growth at Coach; Q4 Revenue Rises 8%
Fourth quarter revenue came in at $1.72 billion, up 8% year-over-year. Coach led the way with a 14% increase (13% on a constant currency basis), outperforming the industry average. This growth was supported by higher average unit retail prices and the acquisition of new customers globally. For the full year, Coach posted a 10% year-over-year gain, driving overall sales growth for the group.
Kate Spade Records Decline and $855 Million Impairment
In contrast, Kate Spade posted a year-over-year revenue decline in the fourth quarter and showed limited progress for the full year. In fiscal 2025, the company recorded $855 million in impairment charges related to brand intangible assets and goodwill. These charges reflected an expected reduction in future cash flows, including the impact of tariffs and trade policy changes, and significantly weighed on GAAP net income. As a result, the company posted a GAAP net loss of $517 million for the quarter. Tapestry stated that it is revisiting Kate Spade’s design and product strategies, redefining its brand value proposition, and aiming to restore it as a medium- to long-term growth driver.
“Fiscal 2025 was a breakout year for Tapestry as our systemic approach to brand-building is capturing a new generation of consumers around the world,” said Joanne Crevoiserat, Chief Executive Officer of Tapestry, Inc., in a statement.
“Looking ahead, the creativity, craftsmanship, and compelling value we offer at scale – combined with the agility of our operating model – position us to drive compounding long-term growth and shareholder value.”
For fiscal 2025, gross margin expanded to 75.4%, up 210 basis points from the prior year. On a non-GAAP basis, adjusted earnings per share reached $5.10, meeting the $5 EPS target set three years ago. Shareholder returns included $300 million in dividend payments and $2 billion in share repurchases. The Board of Directors has approved a 14% increase in the dividend for fiscal 2026.
Outlook for Fiscal 2026
For fiscal 2026, Tapestry expects revenue to be just under $7.2 billion. The forecast incorporates approximately $160 million in additional costs from tariffs and duties, while maintaining plans for operating margin and EPS growth. The company expects positive foreign exchange impacts and brand-strengthening initiatives at Coach to continue to support performance.
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