Tapestry, Inc.

Please stand by, your program is about to begin. If you need assistance on today's program, please press star zero. Good day and welcome to this tapestry conference call. Today's call is being recorded. Later, you will have the opportunity to ask questions during the question and answer session. You may register to ask a question at any time by pressing the star and one on your telephone keypad. You may withdraw yourself from the queue by pressing star two. At this time, for opening remarks and introductions, I would like to turn the call over to the Global Head of Investor Relations, Christina Colon.

Good morning. Thank you for joining us. With me today to discuss our first quarter results, as well as our strategies and outlook, are Joanne Prevoicerat, Tapestry's Chief Executive Officer, and Scott Rowe, Tapestry's Chief Financial Officer and Chief Operating Officer. Before we begin, we must point out that this conference call will involve certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act. This includes projections for our business in the current or future quarters or fiscal years. Forward-looking statements are not guarantees and our actual results may differ materially from those expressed or implied in the forward-looking statements. Please refer to our annual report on Form 10-K, the press release we issued this morning, and our other filings with the Securities and Exchange Commission for a complete list of risks and other important factors that could impact our future results and performance. Non-GAAP financial measures are included in our comments today and in our presentation slides. For full reconciliation to corresponding GAAP financial information, please visit our website, www.tapestry.com forward slash investors, and then view the earnings release and the presentation posted today. Now, let me outline the speakers and topics for this conference call. Joanne will begin with highlights for Tapestry and our brands. Scott will continue with our financial results, capital allocation priorities, and our outlook going forward. Following that, we will hold a question and answer session where we will be joined by Todd Kahn, CEO and brand president of Coach. After Q&A, Joanne will conclude with brief closing remarks. I'd now like to turn it over to Joanne Krivoycerot, Tapestry CEO.

Good morning. Thank you, Christina, and welcome, everyone. Our first quarter marked a powerful start to our next chapter of growth. We increased pro forma revenue by 16%, adjusted operating margin by 200 basis points, and earnings per share by 35% versus last year, all surpassing expectations. We achieved these gains while making strategic investments in the long-term growth drivers of the business. This outperformance positioned us to increase our outlook for the year, reinforcing that our advantages are structural and sustainable. Now touching on the strategic highlights of the quarter, we meaningfully advanced our Amplify growth agenda as outlined at our Investor Day in September. We built emotional connections with consumers, acquiring over 2.2 million new customers globally in the quarter, driven by Gen Z. By connecting with consumers early in their journey, we're building lifetime value and reinforcing a competitive advantage, our ability to attract and retain new generations to our brands. Next, we delivered fashion innovation and product excellence, led by Coach, where our brand is strong and growing. This is evident in the accelerated growth we achieved in our core leather goods offering. The combination of craftsmanship and value we offer to consumers continues to be a differentiator of our brands and business. We powered global growth through compelling experiences, driving double-digit gains in North America, China, and Europe, far outpacing the industry. Our direct-to-consumer business model enables us to connect with consumers wherever they choose to engage with our brands while gathering real-time insights that underpin data-driven decisions. This is key to how we scale with focus and impact, and it was on display in the first quarter as we achieved strong growth in stores and online. As always, our talented teams are the driving force behind our results, delivering with creativity and discipline. and building the capabilities that set us apart today and into the future. Overall, we are delivering standout performance against an uncertain external backdrop with a business that is healthy and positioned for long-term growth. Now moving to our results and strategies by brand, Coach delivered an exceptional first quarter, highlighted by a 21% increase in revenue at expanding margins. We drove double-digit top-line growth across our key markets, with North America increasing 26%, China up 21%, and Europe growing 39%. These broad-based gains and outperformance versus the industry demonstrate that our unique, expressive luxury positioning is resonating around the world. This is evident in our strong customer acquisition results, as we welcomed over 1.7 million new customers globally to coach. a strong increase over prior year led by Gen Z. Our new and younger customers are transacting at higher AUR and have a higher retention rate than the balance of our client base. They are also influencing all generations as we achieve growth in acquisition and retention among both Gen Z and non-Gen Z cohorts, a clear signal of our growing brand resonance and reach. Now, to discuss our first quarter results in more detail, we drove strong double-digit gains in leather goods, where we have multiple platforms powering our growth. Our icons continued to lead, consistent with our strategy. In particular, the Tabby, New York, and Terry families outperformed, driven by accelerated Gen Z customer recruitment. Further, the large Kitzloch bag remained a highly coveted and viral success, a clear demonstration of our brand desire and the creativity of our teams. Bag charms and straps also continued their strong momentum, providing consumers with further opportunities for personalization, customization, and self-expression. Overall, Coach's growth in handbags and accessories highlights the innovation and value we offer in the luxury market. With these advantages, we drove mid-teens handbag AUR growth for the quarter, led by North America. Further, handbag units also rose in the quarter globally and in North America, despite lower promotional activity at the brand. Looking forward, we expect continued gains in both AUR and units, showcasing the diversified drivers in place to support healthy and sustained growth. To this point, we have a strong pipeline of innovation. This was clearly reflected in the brand's Spring 26 runway show, presented at New York Fashion Week in September, which received outstanding reviews and social buzz. Next, turning to footwear. We delivered double-digit growth in the quarter, fueled by sneakers and the continued success of the Highline and Soho families across channels. Footwear is a long-term growth opportunity for Coach, given our brand strength and the category's relevance with our target consumer. Touching on marketing, we continue to drive cultural relevance through emotional storytelling that showcases our brand purpose and product offering. During the quarter, we launched our fall campaign, Revive Your Courage, inspired by insights gained from our engagement with Gen Z around the world. The campaign featured global ambassador Elle Fanning and two new ambassadors, Korean rapper, songwriter, and producer Soyeon, and Japanese songwriter Lilas, two artists breaking boundaries and reshaping culture in their own ways. In addition, our Not Just for Walking footwear campaign highlighted our Soho sneaker and featured Audrey Nuna, the singing voice of Mira, in the Netflix hit film K-Pop Demon Hunters. This campaign continued to support strong demand for our product offerings and cultural relevance for our brand. Our marketing execution exemplifies the brand's hallmark magic and logic in action. By using data-driven insights to scale creativity, we are enhancing the efficacy of our campaigns, expanding our reach, and enabling our growth. And finally, we are fueling brand desire through distinctive, immersive retail experiences that resonate with today's consumer. This quarter, we launched two new Coach coffee shops in North America at Jersey Gardens and Woodbury Commons, tapping into the importance of experiential retail, especially among younger audiences. These activations go beyond marketing. They're driving longer dwell times, commercial momentum, and deepening emotional connections with the brand. Looking ahead to holiday, we're leaning into proven drivers of the business. To this end, we will bring new animations to Tabby, Expand the New York family, launch newness within our Coach Originals collection, and deliver a compelling assortment of seasonal novelty brought to life through marketing campaigns that connect brand, purpose, and product. In closing, Coach continues to deliver standout results, guided by a bold brand vision to be the world's most inclusive, genuine, and loved fashion brand. With a consumer at the heart of everything we do, our talented teams are operating with focus and purpose, turning insights into action and impact. By blending creativity with disciplined brand building, we've reimagined this iconic brand for the next generation of consumers, driving sustainable compounding growth. Now moving to Kate Spade. Our actions to reset the brand for durable and profitable growth are underway. In the first quarter, revenue trends improved sequentially to down 9%. At the same time, we continued to back our turnaround efforts with disciplined investments, taking the strategic steps necessary to strengthen the brand's foundation for long-term growth. Importantly, in the first quarter, where we placed our strategic focus in investments, we drove progress, as tracked against the leading KPIs we've previously outlined. We saw a lift in consideration with our fall campaign and delivered an improvement in Gen Z acquisition trends, driven by handbags. While still early in the turnaround, the improvement in these KPIs are signs that we are executing our strategies and they are beginning to take hold. To touch on our strategies and the results of the quarter in more detail, Our first strategic priority is to fuel brand heat through our uplifting luxury positioning to become top of mind and relevant with our target consumer, the Gen Z Connector. In the quarter, we launched our fall campaign, Spark Something Beautiful, featuring influential Gen Z celebrities Ice Spice, Charli D'Amelio, Leve, and Rain Judge. The campaign had strong organic engagement as the most watched video on social channels for Kate Spade and drove higher brand consideration and purchase intent. This campaign will continue into holiday, building with festive additions as we remain focused on driving cut-through by increasing brand media through a spike in sustained strategy. Next, we advanced our strategy to build handbag blockbusters with a consumer-informed assortment that is more relevant and focused. During the quarter, we made important progress. Our handbag blockbusters outperformed the balance of the offering with higher AUR and strong Gen Z acquisition. This is another example of how our strategic focus is translating into early green shoots in the business. In Q1, we launched Duo, the hero of our fall campaign, which became the top performing style in retail, winning with consumers on versatility and value. We also successfully introduced the 454 family and outlet, an on-trend silhouette reimagined from our archives. At the same time, we continued to animate Deco and Kayla, pillars of the assortment that are supporting new Gen Z acquisition. And as we continue to bring more innovation to the offering, we are streamlining, reducing handbag styles by 40% by holiday, allowing us to stand behind our big ideas with clarity and intention. Importantly, we are embedding deeper consumer insights and a rigorous test-before-we-invest approach to all aspects of our work, ensuring that methodical consumer testing drives greater relevancy and impact across the entire assortment. Finally, touching on our third strategic pillar to maximize compelling omnichannel consumer experiences. A critical part of this work involves removing deselection barriers with cohesive messaging that builds the brand through desire. And we're moving in the right direction, evidenced by the higher full-price selling we delivered in the quarter, a building block to scale in a healthy way. We know that staying disciplined on discounting will impact our top-line results, especially in promotional and highly competitive time periods like holiday. and we are committed to this strategy as we position ourselves for sustainable growth over the long term. Overall, we are strengthening the brand's foundation for long-term profitable growth. While turnarounds take time, Kate Spade is a unique brand with significant runway. To unlock this potential, we have a focused strategy, targeted investments, and clear KPIs to track our progress. We remain confident in our path forward and the brand's opportunity to deliver sequential improvement in the back half of the fiscal year and return to profitable growth in fiscal year 27. In closing, Tapestry achieved a record quarter, and we raised our outlook for the year, exemplifying the strength of our model. Our Amplify growth agenda is working, and our structural advantages are enduring. We operate in a large market where our runway is significant, and we have the strategy, capabilities, and team in place to drive durable growth and value creation for years to come. Our vision to give more people the power to bring their own style and story into the world is fueled by our systemic approach to brand building. This is what guides us and drives our success. I'll now turn it over to Scott.