Tapestry Driven by Coach
Tapestry Reports $8 Billion Revenue with Coach Driving Double-Digit Growth and Shareholder Returns
Key Points
Tapestry plans to return about $1.35 billion to shareholders via share buybacks in the current fiscal year.
Geographic momentum is notable: China up 28%, Europe up 19%, and North America up about 7% in constant currency, with growth driven in part by newer Coach items like Tabby and Belted Ergo.
Fiscal 2026 revenue reached about $8 billion, up roughly 14% year over year, with GAAP EPS of $7.27 and $1.7 billion returned to shareholders through dividends and share repurchases.
CEO Joanne Crevoiserat described the year as defining for Tapestry, highlighting durable capabilities and culture as competitive advantages and signaling that the greatest opportunities are still ahead.
Non-GAAP gross margin expanded by 180 basis points to 78.1%, with margins rising in both Q4 and the full year, aided by mid-teens handbag price increases lifting average unit retail.
Tapestry closed fiscal 2026 with about $8 billion in revenue, up roughly 14% year over year, powered almost entirely by its Coach brand. WWD reported that net profits hit $1.5 billion, and the company returned $1.7 billion to shareholders through dividends and share repurchases.
Coach's strength allowed Tapestry to beat Wall Street estimates for Q4 profit. Business of Fashion noted that demand from affluent and younger shoppers drove the outperformance, while sister brand Kate Spade continued to lag. CEO Joanne Crevoiserat called the year "defining" for the company.
Coach Surges 15% as Handbag Prices Climb
Coach delivered a 15% revenue jump in the fourth quarter alone. Mid-teens price increases on handbags lifted what the company calls average unit retail — essentially the average price per item sold. Styles like the Tabby and Belted Ergo drove much of the demand, particularly among younger buyers.
Non-GAAP gross margin expanded by 180 basis points to 78.1%, according to Morningstar. That means for every dollar of revenue, Tapestry kept 78 cents after production costs — a meaningful improvement. Both Q4 and full-year margins rose, a sign that higher prices are flowing straight to the bottom line.
China Up 28%, Europe Up 19% in Global Expansion Push
Tapestry's growth wasn't limited to North America. China surged 28%, Europe climbed 19%, and North America rose about 7% — all measured in constant currency, which strips out the effect of exchange rate swings. That breadth signals Coach is gaining traction well beyond its home market.
Market Screener reported that non-GAAP EPS jumped 28% to $1.32 in Q4 alone. For the full year, GAAP EPS reached $7.27. Those numbers suggest Tapestry is turning its global momentum into real profit growth, not just bigger sales figures.
Kate Spade Remains a Weak Spot in the Portfolio
Not everything was a win. Kate Spade continued to underperform, dragging on results even as Coach soared. Tapestry has not yet found a formula to rekindle the brand's growth, and executives did not offer a clear turnaround timeline. The gap between the two brands widened in fiscal 2026.
WWD noted that Tapestry excluded its now-divested Stuart Weitzman business from its reported $8 billion figure. That slims the portfolio down to two core brands — making Kate Spade's struggles harder to hide behind a bigger revenue mix.
$1.35 Billion in Buybacks Planned as Dividend Rises 16%
Tapestry is betting big on returning cash to shareholders. The company plans to spend about $1.35 billion on share buybacks in the current fiscal year. It also raised its quarterly dividend by 16%, a clear signal that management expects the strong cash flow to continue.
Looking ahead, Tapestry guided for mid-single-digit revenue growth in fiscal 2027, along with continued margin expansion and low-double-digit EPS growth. Crevoiserat said the "greatest opportunities are still ahead," though she acknowledged headwinds from tariffs and shifting global markets. Business of Fashion reported the company remains confident those gains will hold.
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