The following is a summary of the Tapestry, Inc. (TPR) Q3 2024 Earnings Call Transcript:

Financial Performance:

• Tapestry's Q3 earnings exceeded expectations with gross margin significantly expanded compared to last year.

• Total revenue was in line with last year, driven by a 3% international growth at constant currency.

• North American revenue declined by 3% from last year.

• Operating income and EPS both exceeded projected figures.

• Though it foresees a sales decrease by 1% at constant currency in Q4 2024, Tapestry anticipates about a 50-point reduction in operating margin due to rising SG&A costs.

• The company expects its Q4 EPS to be around $0.85 and plans to quickly reduce its debt while maintaining a solid investment-grade rating.

Business Progress:

• Tapestry won approximately 1.2 million new customers in North America, a majority of whom were Gen Z and Millennials, in line with its strategy.

• The company maintained its digital positioning with sales over thrice the pre-pandemic levels.

• Continued investment in product innovation led to progress in Coach's handbag average unit retail gains, vouching for the growth of Kate Spade and Stuart Weitzman brands.

• Tapestry is looking forward to the acquisition of Capri, aiming to achieve its long-term leverage target of under 2.5 times post-acquisition.

• The company plans to invest in its brands and businesses for sustainable growth and intends to return capital to shareholders through increasing dividends and share repurchases.

• Tapestry expects a low single-digit growth for the year in the Chinese market in spite of the macro headwinds. It plans to reinforce its investment in the market and brand-building actions.

More details: Tapestry IR

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