Tapestry raises full-year outlook as Coach sales jump 16 percent

Tapestry, Inc., the owner of Coach and Kate Spade New York, raised its fiscal 2027 outlook after first-quarter revenue rose 11 percent, driven by 16 percent growth at its Coach brand.

Net sales for the quarter ended September 26, 2026, increased 11 percent to 1.89 billion dollars from 1.71 billion dollars a year earlier. Excluding Stuart Weitzman’s sales from the prior-year comparison, revenue rose 12 percent on both a reported and constant-currency basis. Tapestry sold Stuart Weitzman on August 4, 2025.

Net income rose to 360 million dollars from 275 million dollars. Earnings per diluted share increased 38 percent to 1.76 dollars, and non-GAAP earnings per diluted share rose 32 percent to 1.82 dollars. Gross margin expanded to 78.6 percent from 76.3 percent. Operating income rose 29 percent to 424 million dollars.

“Our first quarter marked a powerful start to the year, with revenue, margin, and earnings growth ahead of expectations and strength around the world,” said Joanne Crevoiserat, chief executive officer of Tapestry, Inc., in a statement. “Our Amplify strategy continues to bring new consumers to our brands through our distinctive combination of creativity, craftsmanship, and value. Building on this outperformance, we are raising our full year outlook, reflecting our confidence in the durability of our growth.”

Tapestry now expects fiscal 2027 revenue of 8.5 billion to 8.6 billion dollars. Its prior guidance was 8.4 billion to 8.5 billion dollars. It expects earnings per diluted share of 8.25 to 8.35 dollars, up from 7.80 to 7.90 dollars. The company forecasts operating margin expansion of about 100 basis points, double its earlier guidance of about 50 basis points. It also raised its capital return outlook for the year to 2 billion dollars, including 1.7 billion dollars in share repurchases.

Coach generated revenue of 1.66 billion dollars, up from 1.43 billion dollars. That included 7 percent growth in North America and 30 percent growth internationally. Coach’s handbag average unit retail (AUR) increased at a low-double-digit percentage rate, while units rose by a low-single-digit percentage.

The group said it gained 2.6 million new customers in the quarter, approximately 35 percent of whom were Gen Z.

Kate Spade sales fall 10 percent, swing to operating loss

Kate Spade’s revenue declined 10 percent to 233 million dollars from 260 million dollars a year earlier, on both a reported and constant-currency basis.

The brand recorded a GAAP operating loss of 20 million dollars, compared with an operating profit of 6 million dollars in the prior-year quarter. On a non-GAAP basis, the operating loss was 6 million dollars.

Kate Spade bore 14 million dollars of the 15 million dollars in distribution network optimisation charges Tapestry recorded in the quarter. According to the company, these costs relate primarily to the transition from its Ohio fulfillment center to a third-party facility in Pennsylvania.

The brand closed eight international stores in the quarter and opened none, bringing its directly operated store count to 318 from 326.

Japan declines, North America lags international growth

On a pro forma basis, North America, Tapestry’s largest region, grew 4 percent to 1.11 billion dollars, trailing growth in all other regions except Japan.

In Japan, revenue fell 5 percent on a reported basis to 103 million dollars. It rose 4 percent at constant currency.

Greater China was the strongest region. Revenue rose 43 percent on a reported basis and 39 percent at constant currency, to 385 million dollars. Europe grew 20 percent to 151 million dollars, or 22 percent at constant currency. Other Asia rose 26 percent to 114 million dollars, or 23 percent at constant currency.

For the second quarter, Tapestry expects revenue growth of approximately 5 to 6 percent at constant currency and adjusted earnings per diluted share of approximately 3.05 dollars, representing low-teens growth from a year earlier.