Tapestry Q4 2025 Earnings Call Highlights Tariff Headwinds
Right now the story of Tapestry is the story of the revitalization of Coach the past couple of years, and wrestling with the recent tariff, supply chain changes.
A few key quotes from the call that I thought were notable:
"...facing greater than previously expected profit headwinds from tariffs and duties with the earlier-than- expected ending of de minimis exemptions being a meaningful factor."
Seems like Tapestry was quite surprised by the ending of deminimis.
"...expected impact on profitability this year from tariffs is $160 million, representing approximately 230 basis points of margin headwind"
Growth in Coach (13% in the quarter) still seems strong, adding 1M customers in North America (70% GenZ/milennials -- a strong sign for any brand). Coach has defined innovation, accessible luxury, and smart marketing.
... Kate Spade not as much -- and a higher tariff impact.
Coach has cut a long tail of SKUs it used to have, and the subsequent promotional activity that was required to sell through those SKUs.
The company is "telling deeper and richer stories on a fewer big ideas." Executives emphasized that is the reason their message is cutting through: follow-through.
Better, more impactful stories, fewer long-tail SKUs, less discounting, more reasons (bag charms) to get customers back in the stores.
There are a number of good ideas in here, but the idea of focused messaging is one that particularly resonates with me. In a crowded environment, simple repeated messaging is going to work a lot better than many different messages.
