Tapestry Raises Fiscal 2027 Sales and Earnings Outlook

The Tip Desk · November 5, 2026 · 3 min read

First-quarter net sales were $1.89 billion, up 11% as reported and 12% pro forma, and the company lifted full-year EPS guidance to $8.25 to $8.35.

Tapestry, Inc. (TPR), a house of iconic accessories and lifestyle brands consisting of Coach and Kate Spade New York, reported fiscal first-quarter net sales of $1.89 billion for the quarter ended September 26, 2026, up 11% from a year earlier. Excluding Stuart Weitzman sales in the prior-year period, pro forma net sales rose 12%.

The company said the quarter exceeded its revenue, gross-margin, operating-margin and earnings guidance, and it raised its full-year Fiscal 2027 outlook. Coach net sales were $1.66 billion, up 16% on both a reported and constant-currency basis. Kate Spade net sales were $233 million, down 10%.

GAAP gross margin expanded 230 basis points to 78.6% from 76.3%. Non-GAAP gross margin expanded 220 basis points to 78.7%. The company attributed the non-GAAP expansion to about 130 basis points of operational improvements, a 70-basis-point net benefit from tariffs and duties, and a 20-basis-point foreign-currency benefit.

GAAP operating margin expanded 310 basis points to 22.4%. Non-GAAP operating income rose 24% to $439 million, and non-GAAP operating margin expanded 230 basis points to 23.2%. GAAP diluted earnings were $1.76 a share, up 38% from $1.28. Non-GAAP diluted earnings were $1.82 a share, up 32% from $1.38.

Distribution-network optimization charges decreased operating income by $15 million, net income by $11 million, and diluted earnings per share by $0.06. The company said the costs related primarily to transitioning from an Ohio fulfillment center to a third-party facility in Pennsylvania.

On a pro forma constant-currency basis, North America revenue grew 4%, Europe rose 22%, and APAC rose 28%, including Greater China growth of 39%. Coach grew 16%, including 7% in North America and 30% internationally. Direct-to-consumer revenue grew 9% on a pro forma basis, with store revenue up low-double digits and digital up mid-single digits. Wholesale growth of approximately 30% was driven by international markets, the company said.

The company said it welcomed 2.6 million new consumers in the quarter, of which approximately 35% were Gen Z, and that handbag average unit revenue at Coach increased at a low-double-digit rate while units rose low-single digits.

Cash, cash equivalents and short-term investments totaled $782 million. Total borrowings were $2.56 billion, and the leverage ratio based on gross debt to adjusted EBITDA was 1.1 times. Inventory was $1.06 billion. Cash flow from operating activities was an inflow of $197 million. Adjusted free cash flow was an inflow of $56 million.

Tapestry returned approximately $700 million to shareholders in the quarter through dividends and share repurchases. It spent $600 million to repurchase about 4.6 million shares at an average cost of $130 a share. The board declared a quarterly cash dividend of $0.4625 a share.

The company now expects to return approximately $2.0 billion to shareholders in Fiscal 2027, an increase from prior guidance, including an expected $1.7 billion of share repurchases, up $350 million from prior guidance. It continues to anticipate an annual dividend of $1.85 a share.

Tapestry raised Fiscal 2027 revenue guidance to approximately $8.5 billion to $8.6 billion, or about 6% to 7% constant-currency growth, above prior guidance of $8.4 billion to $8.5 billion. Non-GAAP operating-margin expansion guidance was raised to approximately 100 basis points versus prior year, from about 50 basis points. Non-GAAP earnings guidance was raised to $8.25 to $8.35 a share, or 17% to 18% growth, above prior guidance of $7.80 to $7.90. Adjusted free cash flow guidance remained approaching $1.7 billion.

For the second fiscal quarter of 2027, the company expects revenue growth of approximately 5% to 6% on a constant-currency basis and earnings of approximately $3.05 a share.