Tapestry, Inc. stock research
FY2025 Q1
Tapestry (TPR) Gross Margin — Quarter Ended Sep 28, 2024
Revenue and gross profit were lower than the immediately preceding quarter but stable compared to the same quarter one year earlier. Gross margin improved both sequentially and year-over-year, driven by a reduction in cost of revenue relative to revenue.
Gross margin takeaway
Quarter ended Sep 28, 2024 · FY2025 Q1
Revenue and gross profit were lower than the immediately preceding quarter but stable compared to the same quarter one year earlier. Gross margin improved both sequentially and year-over-year, driven by a reduction in cost of revenue relative to revenue.
- The most observable driver of the gross margin improvement was the decline in cost of revenue, which fell more than revenue on a sequential basis and was lower year-over-year even as revenue remained flat.
- Compared to the prior quarter, revenue decreased while gross profit decreased, but cost of revenue decreased at a faster rate, resulting in a higher gross margin. Compared to the same quarter last year, revenue was unchanged and gross profit was unchanged, yet cost of revenue was lower, leading to an improved gross margin.
Gross margin snapshot
The selected quarter's reported revenue, gross profit, direct costs, and margin comparisons.
Gross margin
75.3%
Gross profit
$1.1B
Revenue
$1.5B
Cost of revenue
$372.6M
Quarter-over-quarter change
+0.4 pts
Year-over-year change
+2.7 pts
Quarterly gross margin trend
A four-quarter view of the revenue and direct-cost bridge behind gross margin.
| Period | Revenue | Gross profit | Cost of revenue | Gross margin |
|---|---|---|---|---|
| Dec 30, 2023 | $2.1B | $1.5B | $591.3M | 71.6% |
| Mar 30, 2024 | $1.5B | $1.1B | $375.0M | 74.7% |
| Jun 29, 2024 | $1.6B | $1.2B | $399.9M | 74.9% |
| Sep 28, 2024 | $1.5B | $1.1B | $372.6M | 75.3% |
Quarterly comparisons
Compare the selected margin with the preceding quarter and the same fiscal quarter one year earlier.
Previous-quarter change
Jun 29, 2024
+0.4 pts
Year-over-year change
Sep 30, 2023
+2.7 pts
What the margin says
Filing-constrained interpretation of margin direction, comparisons, and what to monitor next.
The most observable driver of the gross margin improvement was the decline in cost of revenue, which fell more than revenue on a sequential basis and was lower year-over-year even as revenue remained flat.
Compared to the prior quarter, revenue decreased while gross profit decreased, but cost of revenue decreased at a faster rate, resulting in a higher gross margin. Compared to the same quarter last year, revenue was unchanged and gross profit was unchanged, yet cost of revenue was lower, leading to an improved gross margin.
Monitor the trajectory of cost of revenue relative to revenue, as its reduction has been the primary factor supporting margin expansion.