Coach brand drives Tapestry's strong Q1 results

Tapestry, Inc., the house of iconic accessories and lifestyle brands including Coach and Kate Spade, reported a strong start to its fiscal 2026 with first-quarter outperformance that surpassed revenue and earnings expectations. The company achieved 13 percent net sales growth to 1.70 billion dollars and saw non-GAAP earnings per diluted share jump 35 percent to 1.38 dollars, up from 1.02 dollars in the prior year.

CEO Joanne Crevoiserat attributed the success to the focused execution of the new "Amplify" strategy, which aims to drive durable growth by connecting with new generations of consumers. "Our first quarter outperformance marked a powerful start to this next chapter... reinforcing that our advantages are structural and sustainable," Crevoiserat stated.

Strategic and operational highlights

The Coach brand was a major growth engine, fuelling a 21 percent growth on a constant currency basis in the quarter to 1.4 billion dollars, supported by strong handbag revenue gains and a mid-teens percentage increase in Average Unit Retail (AUR), reflecting compelling innovation. Kate Spade revenues on the other hand declined by 9 percent to 260.2 million dollars.

Tapestry's focus on new customers was highly successful, acquiring over 2.2 million new customers globally, with Gen Z consumers representing approximately 35 percent of that cohort.

Growth was broad-based across key markets, with pro forma constant currency gains of 18 percent in North America, 32 percent in Europe, and 19 percent in Greater China. The company also noted robust performance in its direct-to-consumer channels, which saw 16 percent pro forma constant currency revenue growth across both digital and global brick-and-mortar sales.

Increased guidance and shareholder return

Given the strong momentum, Tapestry is raising its full-year fiscal 2026 outlook, now expecting revenue in the area of 7.3 billion dollars and earnings per diluted share in the range of 5.45 dollars to 5.60 dollars, representing 7 percent to 10 percent growth.

Furthermore, Tapestry announced plans to return a significant 1.3 billion dollars—or approximately 100 percent of its anticipated adjusted free cash flow—to shareholders in FY26 through dividends and share repurchases. The Board declared a quarterly cash dividend of 40 cents per common share, and the planned share buyback program was increased to approximately 1 billion dollars.