Tapestry raises forecasts following record second-quarter results

US fashion group Tapestry Inc. exceeded expectations in the second quarter of the 2025/26 financial year, thanks to strong growth at its core brand Coach. In light of its recent strong performance, the group raised its forecasts on Thursday.

In the three months to December 27, group revenue reached 2.50 billion dollars. This represented an increase of 14 percent compared to the same quarter last year. On a pro-forma basis, excluding contributions from the shoe brand Stuart Weitzman which was sold last summer, revenues increased by 18 percent. This was largely due to above-average growth in China (plus 35 percent) and Europe (plus 27 percent).

Revenue for the Coach label amounted to 2.14 billion dollars, surpassing the previous year's level by 25 percent. The company explained that demand for handbags, in particular, had recently risen sharply. Conversely, revenue for the Kate Spade brand fell by 14 percent to 360.0 million dollars.

Net profit jumps by 81 percent

Thanks to a higher gross margin, the effects of the Stuart Weitzman sale and consistent cost discipline, operating profit increased by 45 percent to 716.4 million dollars. Adjusted for special items, it grew by 31 percent to 719.8 million dollars. Net profit jumped by almost 81 percent to 561.3 million dollars.

In light of the surprisingly strong figures, CEO Joanne Crevoiserat pointed to the effects of the group's current 'Amplify' strategy. In a statement, she explained that it had helped to deepen customer relationships, accelerate growth and achieve new record results.

The recent performance also prompted management to significantly raise its annual forecasts. For 2025/26, it now expects revenue growth of approximately 11 percent to over 7.75 billion dollars. The target for adjusted earnings per share, previously set at 5.45 to 5.60 dollars, has been raised to 6.40 to 6.45 dollars. This would represent a 25 percent growth compared to the previous year.

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