Coats Group lifted its medium-term operating margin target to 21-23% from 19-21% after reporting $290 million in adjusted operating profit for 2025, beating EPS estimates. The London-listed thread and footwear components maker saw shares surge 3% as results exceeded forecasts despite flat organic revenue.

CEO David Paja highlighted $1 billion in new five-year free cash flow targets, citing portfolio reshaping and cost synergies from the $770 million acquisition of OrthoLite, the global insoles leader. RBC Capital praised the firm’s “structural growth potential” at a P/E of 11.5x and 9% FCF yield, though net debt rose to $815 million from $449 million. Footwear revenue fell 2% due to U.S. tariff disruptions, while apparel grew 1% against a 3% market decline. Recycled thread revenue jumped 43% to $554 million, signaling eco-product momentum.