Tapestry (TPR) Q4 2024 earnings summary

Executive summary

• Achieved record FY24 non-GAAP EPS of $4.29, with double-digit growth year-over-year, and record annual revenue at Coach, driven by strong brand execution, innovation, and customer acquisition, especially among Gen Z and millennials.

• Total revenue grew 1% year-over-year on a constant currency basis to $6.67B, led by 6% international growth, with notable gains in Europe (+14%), Other Asia (+9%), Japan (+5%), and Greater China (+3%).

• Over 6.5 million new customers were added in North America, with more than half from Gen Z and Millennials.

• The pending Capri acquisition remains a strategic priority, with management confident in synergy realization despite Capri's recent underperformance and ongoing FTC litigation.

Financial highlights

• FY24 revenue reached $6.67B, up 1% constant currency; record non-GAAP EPS of $4.29, up 11% year-over-year.

• Gross margin expanded 250 basis points year-over-year to 73.3%, the highest in over 15 years.

• Free cash flow exceeded $1.1B ($1.3B excluding deal costs); year-end cash and investments totaled $7.2B, offset by $7.2B in borrowings.

• Dividend payments totaled $321M, up 17% year-over-year, with a payout ratio of 39%.

• Coach delivered $5.10B in revenue (+4%), Kate Spade $1.33B (–5%), and Stuart Weitzman $242M (–13%) for FY24.

Outlook and guidance

• FY25 revenue expected at ~$6.7B, up ~1% constant currency, with mid-teens growth in Europe and mid-single-digit growth in Other Asia.

• Operating margin projected to expand by 50 basis points; gross margin to improve by 40 basis points.

• Non-GAAP EPS guidance of $4.45–$4.50, reflecting mid-single-digit growth, excluding Capri deal accretion.

• Free cash flow forecasted at ~$1.1B; CapEx and cloud computing costs expected at $190M.

• Annual dividend rate to be maintained at $1.40 per share.