Tapestry reported fiscal 2026 second‑quarter revenue of $2.50 billion, up 14% year‑over‑year, and adjusted earnings per share of $2.69, a 34% increase over the prior year. The results beat consensus estimates of $2.29 billion in revenue and $2.19 in EPS, with the earnings beat driven by disciplined cost management and a favorable mix shift toward higher‑margin Coach products.
Revenue growth was largely powered by a 25% lift at Coach, the company’s flagship brand, driven by strong demand for its Tabby, New York, and other handbag families. Coach’s North American sales grew 27%, while Greater China and Europe each posted double‑digit growth, underscoring the brand’s global momentum. Kate Spade, meanwhile, saw a 14% decline as the brand continues its turnaround plan, which includes a pullback in promotional activity and a reset of its product mix.
Gross margin expanded to 75.5%, up 110 basis points from the same quarter a year earlier, reflecting pricing power and cost discipline. Operating margin, on a non‑GAAP basis, rose to 28.8%, an increase of 390 basis points. The margin expansion was driven by a 250‑basis‑point gain from operational improvements, a 50‑basis‑point benefit from the divestiture of Stuart Weitzman, and a 190‑basis‑point offset of negative tariff and duty impacts. The divestiture, completed on August 4 2025, removed a legacy cost center and improved the company’s margin profile.
Management raised its full‑year revenue guidance to $7.75 billion, above the prior estimate of $7.40 billion, and lifted adjusted EPS guidance to $6.40–$6.45, up from the previous $5.45–$5.60 range. The guidance increase signals confidence that the strong Q2 performance will continue, supported by sustained demand for Coach, improving international market share, and ongoing cost‑control initiatives. The company also reaffirmed its commitment to return $1.5 billion to shareholders through dividends and share repurchases, a 15% increase from the prior year’s $1.3 billion target.
CEO Joanne Crevoiserat said the quarter “reflects the compounding impact of our Amplify strategy, driving deeper consumer engagement and record results.” CFO Scott Roe added that the company “outperformed expectations across revenue, operating income, and earnings, delivering record sales and EPS.” The company’s focus on Gen Z and international expansion, combined with the divestiture of Stuart Weitzman, positions Tapestry for continued growth.
Analysts welcomed the results, citing strong execution, margin expansion, and a clear path to higher full‑year earnings. The market reaction was positive, with investors noting the company’s ability to sustain growth and improve profitability amid a competitive luxury landscape.
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