Tapestry Inc (0LD5.L) Q2 2025 Earnings Report

Assessment of future outlook given QQ2 2025 results and industry dynamics: - Revenue trajectory: The QQ2 2025 achievement implies continued double-digit top-line momentum, driven by Coach and Kate Spade in DTC channels and ongoing wholesale strength. Absent a material macro shock, a rounded continuation of mid- to high-single-digit to low-double-digit revenue growth in the near term could be expected if brand momentum and store productivity persist. - Margin trajectory: Gross margin of roughly 74% indicates strong pricing power and product mix. Sustained leverage will rely on maintaining controllable SG&A as a percentage of sales and managing promotions. Expect modest improvements in operating margin if digital and DTC optimization continues and if freight and input costs remain favorable. - Cash flow and capital allocation: Continued free cash flow generation supports deleveraging and potential share buybacks. Monitoring debt reduction pace, working capital dynamics, and capex intensity will be important; management historically targets a balanced approach to deleveraging while funding growth and returns. - Key risk factors: Consumer discretionary demand sensitivity, currency volatility (USD concentration vs international revenue), inventory cycle management given elevated days inventory outstanding historically, and competition from global luxury houses. FX could impact reported results and margin if there are meaningful USD strength or weakness against key currencies. - Metrics management should watch: trajectory of direct-to-consumer mix, e-commerce penetration, retail footprint optimization (opening/closing/renovation plans), and international expansion in Greater China and other regions. Investors should monitor leverage metrics (net debt/EBITDA) and liquidity buffers as the company progresses through 2025–2026.