00:00We have seen a consumer that has been and continues to be resilient.
00:04And certainly, as you mentioned, there's a lot going on in the world.
00:07And our focus as Tapestry and with our brands is how all of these issues are impacting the consumer.
00:15We spend a lot of time making sure that we understand how these issues are impacting the consumer.
00:20And our job is to deliver great product and experiences.
00:24And what we deliver, Katie, as you know, is incredible value into the marketplace.
00:29And that's how we see and that's why we're winning.
00:32And when you think about the ripple effects here, I'm curious whether you've seen any clear trends emerge when it
00:37comes to, you know, what you're seeing in the U.S. versus Europe versus Asia, for example.
00:43Well, we're winning in all the markets that you just mentioned.
00:47In our last quarter, we grew double digits in North America.
00:51We grew double digits in China and we grew by double digits in Europe.
00:55And where we're winning is we're winning with this younger consumer.
00:59Our focus has been really clear.
01:01We've made distinct choices to focus on this younger consumer and deliver, as I mentioned, great value into the marketplace
01:09that includes not only really great high-quality product, but that innovation that they're responding to.
01:16And in order to win today, you have to deliver innovation into the market.
01:20That's how we're winning around the world.
01:22And we're seeing this young consumer respond.
01:25And certainly there are a lot of pressures on this consumer that differ between these regions.
01:29But what they have in common is understanding great value and responding to the innovation we're delivering.
01:35And I do want to talk about, you know, the Gen Z shopper, that younger consumer that you've carved out.
01:41But before we move on, when you think about the U.S.-Iran war, how is that affecting how you're thinking
01:46about your Middle East presence specifically?
01:50Well, with tapestry, it always starts with people.
01:53And the highest priority for us is ensuring the safety of our associates, our consumers, and the communities where they
02:00live and work.
02:01The financial impact of our business, the Middle East represents less than 1% of our business.
02:09So in our overall financial results, it's immaterial.
02:13We do not have a big presence in that market.
02:15But more broadly, the way we think about those issues impacting our business is how it's impacting the consumer.
02:23And as you know, the ripple effects of those issues are, you know, meet these consumers around the world in
02:31every region we operate, in North America, in China, and in Europe.
02:34And we make sure we stay close to the consumer just to understand how they are responding and what's important
02:41to them as these issues continue to resonate and reflect in their every day.
02:47Well, Joanne, you mentioned, you know, Gen Z, that younger consumer.
02:51And I want to talk a little bit more about that because tapestry obviously has had a lot of success
02:56in appealing to that generation.
02:58And that's created the big natural question here.
03:01How do you maintain that brand desirability?
03:04How do you keep that momentum going?
03:06What specifically is tapestry looking at right now to retain and attract more of that consumer?
03:13Well, this is a place that's really authentic to who we are.
03:17And as we've gone through art and done our research with the consumer, we hear these stories over and over
03:22again.
03:23I remember my first coach bag.
03:25I bought it when I had just graduated or when I had my promotion or my first Kate Spade bag.
03:31So this young consumer space and being that first luxury handbag purchase, this is a space that's authentic to who
03:39we are.
03:39And we are having momentum because we're focused on understanding this consumer.
03:44And that understanding has to be continuous.
03:47This is a muscle that we've built over the last five years.
03:50But it's a muscle that we need to continue to use because as you talk about all of the pressures
03:56around the world and the changes that we see on a daily basis,
04:00those pressures are impacting our young consumers in different ways around the world.
04:05I do want to talk a little bit about M&A, of course.
04:07You think about Tapestry's history, that blocked Capri deal.
04:11What are the necessary ingredients at this point that you would need to see to pursue another deal?
04:18Well, we have incredible runway ahead with our organic business.
04:22And we are very focused on tapping into that untapped opportunity that we see to continue to grow Coach.
04:31We think Coach can be a $10 billion brand.
04:33And we don't see anything in our way to get there.
04:36We're continuing to execute our playbook there.
04:39And we also see Kate Spade is another leg of growth for Tapestry.
04:43So we're going to continue to apply these brand building capabilities that we have to our organic business.
04:49And we have tremendous value creation.
04:51And we want to make sure that we continue the momentum at Coach and return Kate to sustainable long-term
04:58growth before we would look at another acquisition.
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