On November 6, New York–based Tapestry, Inc. announced its financial results for the first quarter of fiscal year 2026, delivering a strong start that exceeded expectations. Revenue rose 13% year over year (12% on a constant-currency basis) to $1.7 billion, driven by a 22% increase at Coach (21% on a constant-currency basis), the company’s flagship brand that continues to anchor its global momentum.
Improved Gross Margin and Record-High EPS
Gross margin expanded by 120 basis points year over year to 76.5% on an adjusted basis, supported by favorable leverage in SG&A expenses. Operating margin increased by 260 basis points under GAAP and 200 basis points on an adjusted basis. As a result, diluted EPS rose 61% to $1.28 under GAAP and 35% to $1.38 on an adjusted basis, marking the highest quarterly profit and earnings per share in the company’s history.
Double-Digit Growth Across North America, China, and Europe
All key regions delivered strong results: North America +18%, Greater China +19%, and Europe +32% year over year. In Europe, the company saw notable traction among Gen Z customers, reflecting progress in reaching a younger demographic. The direct-to-consumer (D2C) business also expanded 16% on a constant-currency basis, achieving solid mid-teens growth across both digital and brick-and-mortar channels.
Coach Drives Overall Momentum
Coach recorded 21% sales growth, posting +26% in North America, +21% in Greater China, and +39% in Europe—double-digit increases across all regions. Within handbags, platforms such as Tabby, New York, and Teri remained top performers, lifting average unit retail by mid-teens globally. Footwear, including sneakers, also achieved double-digit growth, contributing to stronger brand loyalty among Gen Z consumers.
In contrast, Kate Spade New York posted a 9% decline, though the brand’s strategic repositioning initiatives are underway. The handbag category continues to attract new Gen Z customers, signaling potential for recovery in the coming quarters.
Progress Under the “Amplify” Growth Strategy
Chief Executive Officer Joanne Crevoiserat commented: “Under our Amplify Plan, announced in September, we are extending the reach of Tapestry’s iconic brands to the next generation while driving sustainable growth. The first-quarter results mark a strong beginning, reinforcing our confidence in the company’s structural advantages and long-term momentum.”
The Amplify Strategy is built on four key pillars:
- Deepening emotional connections with consumers
- Advancing fashion innovation and product excellence
- Delivering experiential value to fuel global growth
- Empowering talent and evolving company culture
Through this framework, Tapestry is unlocking new growth opportunities across global markets.
Backed by robust free cash flow and a solid balance sheet, Tapestry plans to return approximately $1.3 billion to shareholders in FY2026—comprising $300 million in dividends (at $1.60 per share annually) and around $1 billion in share repurchases, up from the previous plan of $800 million. In Q1 alone, the company repurchased 4.7 million shares for $500 million at an average price of $106.
Upward Revision to Full-Year Outlook
Following a strong first quarter, Tapestry raised its full-year guidance for fiscal 2026. The company now expects revenue of approximately $7.3 billion, up 7–8% year over year, with an operating margin improvement of about 50 basis points. Non-GAAP EPS is projected in the range of $5.45 to $5.60, representing 7–10% growth, while free cash flow is expected to reach approximately $1.3 billion.
In August 2025, Tapestry completed the sale of its luxury footwear brand, Stuart Weitzman, to Caleres, a leading footwear company, for a total consideration of $120.2 million. This strategic divestiture further refined the company’s brand portfolio, enabling Tapestry to reallocate resources toward its core handbag and leather goods business led by Coach. By sharpening its strategic focus and streamlining operations, Tapestry is positioning itself for a new phase of growth and profitability, with a clearer emphasis on its most competitive and high-margin categories.
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