Tapestry, Inc. (TPR) Earnings & Analysis

Latest quarter

Tapestry reported Q4 FY2026 revenue of $1.9 billion, missing the consensus estimate of $1.9 billion, with a −0.04% revenue surprise. Adjusted earnings per share were $1.32, above the consensus estimate of $1.26.

Revenue rose from $1.7 billion a year earlier. CEO Joanne Crevoiserat said Coach’s constant-currency revenue grew 14%, with sales rising 10% in North America, 30% in Greater China and 25% in Europe. She said handbag average unit revenue rose at a mid-teens rate while unit volumes were roughly in line with the prior year.

Tapestry reported gross margin of 83.3%, compared with 76.3% a year earlier, and operating margin of 23.6%, versus −33.9%. Diluted earnings per share were $1.68, compared with −$2.49 a year earlier. Free cash flow was $359.9 million, down from $411.5 million.

Adjusted EPS is the figure the consensus estimates, not the GAAP EPS above.

What management said on the call

Joanne Crevoiserat said customer acquisition fueled growth during fiscal 2026, with younger shoppers leading the influx. At Coach, the CEO said both new and existing customers contributed to sales, while the brand’s core leather goods assortment led its fourth-quarter performance.

Asked about pricing and unit volumes, Coach CEO Todd Kahn said much of the quarter’s growth came from higher average unit revenue while units were in line with the prior year. Kahn said the brand had fewer promotion days and was placing collection products in outlet stores at full price under its One Coach strategy. CFO Scott Roe added that promotion timing and earlier sell-through had shifted some units from the fourth quarter into the third.

Crevoiserat said Coach increased marketing spending by approximately 20% from a year earlier, shifting more toward brand-building campaigns. She said its store concept was drawing more traffic and longer visits, particularly among Gen Z shoppers. On international competition, Kahn said Coach was using its product value and marketing to reach consumers in Europe and China, including shoppers outside traditional luxury locations.

At Kate Spade, Crevoiserat said top-line progress had been more gradual than planned. She said handbag families had supported customer acquisition, while store renovations had lifted sales through improved conversion and average transaction value. The CEO said the brand would focus on creative execution, products and storytelling as it prepared to scale.

Roe said gross margin benefited from operational improvements and the Stuart Weitzman divestiture, offsetting tariff and duty costs. For the year ahead, he said Tapestry assumed a roughly neutral year-over-year tariff impact after mitigation, although the effects would vary across quarters. He said the company expected to invest in Coach stores through openings and renovations, with the rest of the spending primarily supporting technology and digital investments.

Guidance

In its November 5 release, Tapestry expected FY2027 revenue of approximately $8.5 billion to $8.6 billion and adjusted earnings per share of $8.25 to $8.35. On the Q4 call, its prior outlook was $8.4 billion to $8.5 billion in revenue and $7.80 to $7.90 in earnings per share, on a comparable 52-week basis.

The company’s newer outlook called for operating margin expansion of approximately 100 basis points and a tax rate of approximately 18%. Its prior guidance had called for 50 basis points of margin expansion and an approximately 18.5% tax rate.