TAPESTRY, INC.TPR
TAPESTRY, INC. Stock Compensation Disclosure
SHARE-BASED COMPENSATION
The Company maintains several share-based compensation plans which are more fully described below. The following table shows the total compensation cost charged against income for these plans and the related tax benefits recognized in the Consolidated Statements of Operations:
June 28, 2025(1) | June 29, 2024 | July 1, 2023 | |||||||||||||||
| (millions) | |||||||||||||||||
| Share-based compensation expense | $ | 91.4 | $ | 85.9 | $ | 78.8 | |||||||||||
| Income tax benefit related to share-based compensation expense | 18.7 | 17.5 | 12.9 | ||||||||||||||
(1)During fiscal year ended June 28, 2025, the Company incurred $2.7 million of share-based compensation expense related to the modification of award terms in connection with the sale of the Stuart Weitzman Business and $1.4 million of share-based compensation expense related to its Organizational Efficiency Costs. Refer to Note 5, "Acquisitions and Divestitures" for further information.
Stock-Based Plans
The Company maintains the Amended and Restated Tapestry, Inc. 2018 Stock Incentive Plan to award stock options and shares to certain members of management and the outside members of its Board of Directors (“Board”). The Company maintains the 2010 Stock Incentive Plan for awards granted prior to the establishment of the 2018 Stock Incentive Plan. These plans were approved by the Company's stockholders. The exercise price of each stock option equals 100% of the market price of the Company's stock on the date of grant and generally has a maximum term of ten years. Stock options and service-based share awards that are granted as part of the annual compensation process generally vest ratably over four years. Stock option and share awards are subject to forfeiture until completion of the vesting period, which ranges from to four years. The Company issues new shares upon the exercise of stock options or vesting of share awards.
Stock Options
A summary of stock option activity during the fiscal year ended June 28, 2025 is as follows:
| Number of Options Outstanding | Weighted- Average Exercise Price per Option | Weighted- Average Remaining Contractual Term (in years) | Aggregate Intrinsic Value | ||||||||||||||||||||
| (millions) | (millions) | ||||||||||||||||||||||
| Outstanding at June 29, 2024 | 8.2 | $ | 32.59 | ||||||||||||||||||||
| Granted | 1.0 | 40.71 | |||||||||||||||||||||
| Exercised | (3.8) | 32.68 | |||||||||||||||||||||
| Forfeited or expired | (0.2) | 34.76 | |||||||||||||||||||||
| Outstanding at June 28, 2025 | 5.2 | 33.97 | 6.3 | $ | 251.5 | ||||||||||||||||||
Vested and expected to vest at June 28, 2025 | 5.2 | 33.93 | 6.3 | 249.8 | |||||||||||||||||||
| Exercisable at June 28, 2025 | 2.9 | 31.21 | 4.8 | 148.6 | |||||||||||||||||||
The fair value of each option grant is estimated on the date of grant using the Black-Scholes option pricing model and the following weighted-average assumptions:
| June 28, 2025 | June 29, 2024 | July 1, 2023 | |||||||||||||||
| Expected term (years) | 4.9 | 5.0 | 4.9 | ||||||||||||||
| Expected volatility | 40.9 | % | 44.8 | % | 48.6 | % | |||||||||||
| Risk-free interest rate | 3.8 | % | 4.5 | % | 3.3 | % | |||||||||||
| Dividend yield | 3.4 | % | 4.2 | % | 3.4 | % | |||||||||||
The expected term of options represents the period of time that the options granted are expected to be outstanding and is based on historical experience. Expected volatility is based on historical volatility of the Company’s stock as well as the implied volatility from publicly traded options on the Company's stock. The risk-free interest rate is based on the zero-coupon U.S. Treasury issue as of the date of the grant. Dividend yield is based on the expected annual dividend per share and the Company’s stock price as of the grant date.
The weighted-average grant-date fair value of options granted during fiscal 2025, fiscal 2024 and fiscal 2023 was $12.11, $10.35 and $12.04, respectively. The total intrinsic value of options exercised during fiscal 2025, fiscal 2024 and fiscal 2023 was $106.9 million, $11.1 million and $19.5 million, respectively. The total cash received from option exercises was $121.3 million, $23.0 million and $34.9 million in fiscal 2025, fiscal 2024 and fiscal 2023, respectively, and the cash tax benefit realized for the tax deductions from these option exercises was $18.4 million, $2.0 million and $3.9 million, respectively.
At June 28, 2025, $17.7 million of total unrecognized compensation cost related to non-vested stock option awards is expected to be recognized over a weighted-average period of 1.4 years.
Service-based Restricted Stock Unit Awards (“RSUs”)
A summary of service-based RSU activity during the year ended June 28, 2025 is as follows:
| Number of Non-vested RSUs | Weighted- Average Grant- Date Fair Value per RSU | ||||||||||
| (millions) | |||||||||||
| Non-vested at June 29, 2024 | 5.2 | $ | 32.96 | ||||||||
| Granted | 1.9 | 42.39 | |||||||||
| Vested | (2.2) | 29.83 | |||||||||
| Forfeited | (0.4) | 36.74 | |||||||||
| Non-vested at June 28, 2025 | 4.5 | 37.62 | |||||||||
At June 28, 2025, $90.4 million of total unrecognized compensation cost related to non-vested share awards is expected to be recognized over a weighted-average period of 1.3 years.
The weighted-average grant-date fair value of share awards granted during fiscal 2025, fiscal 2024 and fiscal 2023 was $42.39, $34.19 and $35.53, respectively. The total fair value of shares vested during fiscal 2025, fiscal 2024 and fiscal 2023 was $92.6 million, $95.3 million and $88.0 million, respectively.
Performance-based Restricted Stock Unit Awards (“PRSU”)
The Company grants PRSUs to key executives, the vesting of which is subject to the executive’s continuing employment and the Company's achievement of certain performance goals. A summary of PRSU activity during the fiscal year ended June 28, 2025 is as follows:
| Number of Non-vested PRSUs | Weighted- Average Grant- Date Fair Value per PRSU | ||||||||||
| (millions) | |||||||||||
| Non-vested at June 29, 2024 | 1.2 | $ | 36.74 | ||||||||
| Granted | 0.4 | 47.73 | |||||||||
| Change due to performance condition achievement | — | — | |||||||||
| Vested | (0.3) | 42.31 | |||||||||
| Forfeited | (0.2) | 39.58 | |||||||||
| Non-vested at June 28, 2025 | 1.1 | $ | 36.34 | ||||||||
At June 28, 2025, $15.3 million of total unrecognized compensation cost related to non-vested share awards is expected to be recognized over a weighted-average period of 1.0 year.
The weighted-average grant-date fair value per share of PRSU awards granted during fiscal 2025, fiscal 2024 and fiscal 2023 was $47.73, $33.99 and $35.46, respectively. The total fair value of awards that vested during fiscal 2025, fiscal 2024 and fiscal 2023 was $13.4 million, $0.0 million and $60.4 million, respectively.
PRSUs are subject to a two-year and three-year cliff vesting contingent on the employee's continuing employment and the Company's achievement of the performance goals established at the beginning of the performance period. The fair value of the PRSU's is based on the price of the Company's common stock on the date of grant.
In fiscal 2025, fiscal 2024 and fiscal 2023, the cash tax benefit realized for the tax deductions from all RSUs (service and performance-based) was $16.7 million, $15.3 million and $29.5 million, respectively.
Employee Stock Purchase Plan
Under the 2001 Employee Stock Purchase Plan, eligible employees are permitted to purchase a limited number of Company common shares at 85% of market value. Under this plan, the Company sold 0.1 million, 0.2 million and 0.1 million shares to employees in fiscal 2025, fiscal 2024 and fiscal 2023, respectively. Compensation expense is calculated for the fair value of employees’ purchase rights using the Black-Scholes model and the following weighted-average assumptions:
| Fiscal Year Ended | |||||||||||||||||
| June 28, 2025 | June 29, 2024 | July 1, 2023 | |||||||||||||||
| Expected term (years) | 0.5 | 0.5 | 0.5 | ||||||||||||||
| Expected volatility | 35.7 | % | 32.5 | % | 38.2 | % | |||||||||||
| Risk-free interest rate | 4.9 | % | 5.4 | % | 3.3 | % | |||||||||||
| Dividend yield | 2.7 | % | 3.9 | % | 3.1 | % | |||||||||||
The weighted-average fair value of the purchase rights granted during fiscal 2025, fiscal 2024 and fiscal 2023 was $13.48, $8.45 and $9.30, respectively. The Company issues new shares for employee stock purchases.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Aug 14, 2025 | Showing above |
| 2024 | Aug 15, 2024 | |
| 2023 | Aug 17, 2023 | |
| 2022 | Aug 18, 2022 | |
| 2021 | Aug 19, 2021 | |
| 2020 | Aug 13, 2020 | |
| 2019 | Aug 15, 2019 | |
| 2018 | Aug 16, 2018 | |
| 2017 | Aug 18, 2017 | |
| 2016 | Aug 19, 2016 | |
About Stock Compensation Disclosures
Stock-based compensation disclosures detail the equity awards granted to employees and executives — including stock options, restricted stock units (RSUs), and performance shares — along with the valuation methods and assumptions used to expense them. This section reveals the true cost of talent retention and the alignment between management incentives and shareholder interests.
Key signals: total unrecognized compensation expense and its expected recognition period signal future earnings headwinds from already-granted awards. For stock options, examine Black-Scholes assumptions — expected volatility, risk-free rate, and expected term — as understating any of these reduces reported compensation expense. Compare stock compensation expense as a percentage of revenue against peers to assess dilution cost. Watch vesting schedules for acceleration clauses tied to change-of-control events. Performance-based awards with undemanding targets may indicate weak governance. Add back stock compensation to operating cash flow to calculate a more conservative free cash flow figure.