Before the market opened on August 13, US Eastern Time, American accessible luxury group Tapestry (NYSE: TPR), owner of Coach and Kate Spade New York, announced key financial results for the fourth quarter and full fiscal year 2026 ended June 27. Fourth-quarter revenue reached $1.88 billion, up 9% year-on-year (+11% on a pro forma constant-currency basis), primarily driven by 15% revenue growth at Coach (+14% at constant currency).
Full-year fiscal 2026 revenue reached $8.0 billion, up 14% year-on-year (+17% on a pro forma constant-currency basis), driven by 24% revenue growth at Coach (+23% at constant currency). Notably, Coach delivered double-digit sales growth in every quarter of fiscal 2026.
In Greater China, Tapestry’s revenue rose 33% year-on-year to $350 million in the fourth quarter ended June 27, while full-year revenue increased 38% to $1.4 billion, surpassing the $1 billion mark for the first time. Greater China led all global markets in revenue growth in both the fourth quarter and the full fiscal year.
Tapestry’s gross margin and operating margin both expanded year-on-year in the fourth quarter and full fiscal year 2026, exceeding its previous guidance.
Although fourth-quarter results exceeded expectations, the group’s fiscal 2027 outlook fell short of market expectations, sending its shares lower. By the close of trading on the day of the earnings release, Tapestry shares had fallen 16.49% from the previous session’s close to $128.39 per share. The stock has gained approximately 15% over the past year, giving the group a latest market capitalisation of approximately $25.9 billion.
Growth in the core leathergoods category was primarily driven by a significant increase in Coach handbag revenue, with average unit retail (AUR) for handbags rising at a mid-teens rate in both the fourth quarter and the full year. Full-year leathergoods growth was driven by both higher average unit retail and increased sales, underscoring the brand’s appeal, product innovation and value proposition, as well as the diversity of its growth drivers.
Direct-to-consumer (DTC) revenue increased 11% in the fourth quarter and 16% for the full year. Digital revenue recorded mid-single-digit growth in the fourth quarter and high-teens growth for the full year, while store revenue increased at a mid-teens rate in both the fourth quarter and the full year.
Tapestry Chief Executive Officer Joanne Crevoiserat said that “Our fourth quarter outperformance capped a year of strong growth, as we meaningfully exceeded expectations and achieved key financial commitments we established at our Investor Day two years ahead of plan.
Our success is by design, demonstrating the power of our Amplify strategy. Through intentional choices, disciplined execution, and an unwavering focus on the consumer, we have built a stronger, more focused organization. These strengths enable us to deliver creativity, value, and relevance at scale, deepening our connections with consumers globally. We are confident our advantages will continue to compound, driving durable growth and long-term shareholder value.”
In the fourth quarter, Tapestry acquired more than 2.5 million new consumers, bringing the full-year total to approximately 11 million, with Gen Z accounting for around 35% of new customers. Engagement among existing customers also increased, reflecting the brands’ broad appeal and strong customer relationships.
Key financial results for Tapestry’s fourth quarter of fiscal 2026 ended June 27 were as follows:
- Net sales reached $1.88 billion, up 9% year-on-year (+11% at constant currency);
- Gross profit was $1.56 billion, up 19% year-on-year;
- Gross margin was 83.3%, up 700 basis points year-on-year;
- Operating profit was $442 million, compared with an operating loss of $583 million in the same period last year;
- Operating margin was 23.6%, compared with -33.9% in the same period last year;
- Diluted earnings per share were $1.68, compared with a loss per share of $2.49 in the same period last year.
By brand:
- Coach’s fourth-quarter revenue reached $1.64 billion, up 15% year-on-year (+14% at constant currency);
- Kate Spade’s fourth-quarter revenue reached $235 million, down 7% year-on-year (-7% at constant currency).
By market:
- North America recorded fourth-quarter revenue of $1.15 billion, up 7% year-on-year;
- Greater China recorded fourth-quarter revenue of $350 million, up 33% year-on-year (+28% at constant currency);
- Japan recorded fourth-quarter revenue of $100 million, down 11% year-on-year (-4% at constant currency);
- Other Asia recorded fourth-quarter revenue of $100 million, up 26% year-on-year (+22% at constant currency);
- Europe recorded fourth-quarter revenue of $120 million, up 22% year-on-year (+19% at constant currency);
- Other markets recorded fourth-quarter revenue of $39.6 million, up 7% year-on-year (+7% at constant currency).
Key financial results for Tapestry’s full fiscal year 2026 ended June 27 were as follows:
- Net sales reached $8.0 billion, up 14% year-on-year (+13% at constant currency);
- Gross profit was $6.23 billion, up 18% year-on-year;
- Gross margin was 77.8%, up 240 basis points year-on-year;
- Operating profit was $1.91 billion, compared with $415 million in the previous year;
- Operating margin was 23.9%, compared with 5.9% in the previous year;
- Diluted earnings per share were $7.27, compared with $0.82 in the previous year.
By brand:
- Coach’s full-year revenue reached $6.91 billion, up 24% year-on-year (+23% at constant currency);
- Kate Spade’s full-year revenue reached $1.07 billion, down 10% year-on-year (-11% at constant currency).
By market:
- North America recorded full-year revenue of $5.03 billion, up 15% year-on-year;
- Greater China recorded full-year revenue of $1.4 billion, up 38% year-on-year (+35% at constant currency);
- Japan recorded full-year revenue of $460 million, down 10% year-on-year (-7% at constant currency);
- Other Asia recorded full-year revenue of $440 million, up 16% year-on-year (+13% at constant currency);
- Europe recorded full-year revenue of $530 million, up 29% year-on-year (+23% at constant currency);
- Other markets recorded full-year revenue of $130 million, up 7% year-on-year (+7% at constant currency).
Fiscal 2027 first-quarter outlook:
- Sales are expected to increase at a high-single-digit rate on both a reported and constant-currency basis;
- Diluted earnings per share are expected to be approximately $1.55, representing low-double-digit growth year-on-year.
Fiscal 2027 full-year outlook:
- Revenue is expected to reach $8.4 billion to $8.5 billion, representing mid-single-digit growth year-on-year on both a reported and constant-currency basis;
- Operating margin is expected to expand by approximately 50 basis points year-on-year;
- Diluted earnings per share are expected to range from $7.80 to $7.90, representing low-double-digit growth year-on-year.
| Source: Official financial results
| Image Credit: Official financial results
| Editor: Luxeplace
