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Tapestry's Q1 earnings rose 35% y/y to $1.38 per share on 13% higher sales, topping estimates.
TPR lifted its FY26 outlook, projecting up to 10% EPS growth and $7.3B in revenues.
Shares fell 9.6% as investors reacted to tariff headwinds and ongoing softness at Kate Spade.
Tapestry, Inc. (TPR - Free Report) reported impressive first-quarter fiscal 2026 results that exceeded the Zacks Consensus Estimate for revenues and earnings. The company delivered year-over-year growth in its top and bottom lines, and also raised its fiscal 2026 guidance.
However, TPR shares declined 9.6% yesterday as investors reacted to management’s disclosure of significant tariff-related headwinds expected to pressure margins for the year, along with continued weakness at Kate Spade.
Nonetheless, the company showcased broad-based growth in the fiscal first quarter, with the Coach brand driving momentum through strong consumer engagement, especially among Gen Z and Millennials. Tapestry emphasized global gains, with notable strength in North America, Europe and China, supported by product innovation and digital expansion. TPR’s direct-to-consumer model and agile supply chain remain central to its strategy for long-term, sustainable growth across a dynamic retail landscape.
Tapestry reported adjusted earnings of $1.38 a share for the fiscal first quarter, which surpassed the Zacks Consensus Estimate of $1.25 and increased 35% from $1.02 in the prior-year period.
Net sales were $1,704.6 million, beating the consensus estimate of $1,640 million. Also, net sales reflected a 13.1% year-over-year increase and 12% growth on a constant-currency basis. Foreign exchange had a positive impact of roughly 70 basis points for the quarter, driven by the depreciation of the U.S. Dollar.
The divestiture of Stuart Weitzman was completed on Aug. 4, 2025. Pro-forma net sales (which exclude net sales of the Stuart Weitzman business on a reported and constant-currency basis) increased 16% year over year to $1,690 million.
In the fiscal first quarter, the company acquired more than 2.2 million customers globally, driven by an increased share of Gen Z consumers from the prior year, who represented approximately 35% of new customers.
Direct-to-consumer revenues increased 16% year over year on a pro-forma constant currency basis, reflecting mid-teen growth across both digital and global brick-and-mortar channels; achieved strong and expanding profitability in both, driven by creativity and Tapestry’s data and analytics capabilities.
Tapestry’s Brand-Wise Sales Details
For the quarter, Coach's net sales were $1.43 billion, beating the Zacks Consensus Estimate of $1.38 billion. This marked a 22% year-over-year increase on a reported basis and 21% growth on a constant-currency basis.
Kate Spade’s sales were $260.2 million, surpassing the consensus estimate of $251.8 million, representing an 8% decline on a reported basis and a 9% fall on a constant-currency basis from the prior-year period.
Stuart Weitzman’s net sales totaled $14.6 million, lagging the consensus estimate of $29.5 million. This marked a 73% year-over-year decrease on both reported and constant-currency basis.
TPR Provides Q1 Revenue Insights by Region
On a pro-forma basis, sales in North America increased 18% year over year to $1.07 billion. Sales in Greater China improved 20% to $269.1 million.
In Japan, sales decreased 7% year over year to $108.5 million, while revenues from Other Asian markets rose 4% to $90.5 million. European markets continued to show strong momentum, with a 39% increase in revenues to $125.2 million, driven by robust local demand and strong tourist spending.
Tapestry’s Margins & Cost Details
The consolidated adjusted gross profit was $1.29 billion, up from $1.13 billion in the year-ago period. Also, the adjusted gross margin expanded by 120 basis points to 76.5%, driven by operational improvements of roughly 170 basis points and a 70-basis-point benefit from the divestiture of Stuart Weitzman, partially offset by a 70-basis-point negative impact of tariffs and duties, and a 60-basis-point currency headwind.
The company reported an adjusted operating income of $353.9 million, up 24% from $285.4 million in the year-ago period. Meanwhile, the adjusted operating margin increased 200 basis points to 20.9%, including a 110-basis-point positive impact of the divestiture of Stuart Weitzman.
Adjusted selling, general and administrative expenses totaled $938.9 million, up 10.5% from $849.5 million in the year-ago period. As a percentage of net sales, this metric declined 80 basis points year over year to 55.6%.
TPR’s Q1 Store Update
As of the end of the fiscal first quarter, the company operated 326 Coach stores and 188 Kate Spade stores in North America. Internationally, the store count stood at 608 for Coach and 170 for Kate Spade.
TPR ended the quarter with cash, cash equivalents and short-term investments of $743.2 million, long-term debt of $2.38 billion, and stockholders’ equity of $399.5 million.
The operating cash flow for the fiscal first quarter was $112.6 million. The adjusted free cash flow totaled $102.7 million. Capital expenditure and cloud computing implementation costs amounted to $38 million compared with $30 million in the prior year.
In the quarter, Tapestry returned approximately $500 million to shareholders through share repurchases, buying back more than 4.7 million shares of common stock at an average cost of about $106 per share.
For fiscal 2026, the company expects to return $1.3 billion to shareholders, including $1 billion in planned share repurchases and $300 million in annual dividends. The board declared a quarterly cash dividend of 40 cents per share, payable Dec. 22, 2025, to shareholders of record as of Dec. 5, representing an annual dividend rate of $1.60 per share.
What Lies Ahead for Tapestry?
TPR raised its fiscal 2026 outlook, which is provided on a non-GAAP basis. The company expects revenues of $7.3 billion, indicating 4-5% growth from the prior-year actual, while it earlier projected revenues to reach $7.2 billion. Excluding the impacts of the Stuart Weitzman divestiture, pro-forma revenues are anticipated to increase 7-8% on a nominal basis, while foreign currency is expected to provide a 70-basis-point tailwind to full-year results.
The operating margin is expected to expand by about 50 basis points, including 280 basis points of underlying margin expansion, partially offset by a 230-basis-point headwind from tariffs and duties. Previously, the company anticipated more than 250 basis points of underlying expansion, offset by similar tariff and duty impacts.
Earnings per share are forecast at $5.45-$5.60, indicating 7-10% year-over-year growth, compared with the earlier mentioned $5.30-$5.45, suggesting 4-7% growth.
The adjusted free cash flow for fiscal 2026 is projected to be $1.3 billion.
Shares of the company have lost 9.1% in the past three months as compared with the industry’s decline of 3.9%.
TPR Stock Past 3-Month Performance
Image Source: Zacks Investment Research
Zacks Rank & Other Key Picks
The company currently has a Zacks Rank of 2 (Buy).
Some other top-ranked stocks are Boot Barn Holdings, Inc. (BOOT - Free Report) , Capri Holdings Limited (CPRI - Free Report) and American Eagle Outfitters Inc. (AEO - Free Report) .
Boot Barn operates as a lifestyle retail chain devoted to western and work-related footwear, apparel and accessories. It currently flaunts a Zacks Rank of 1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Boot Barn’s fiscal 2026 earnings and sales implies growth of 20.5% and 16.2%, respectively, from the year-ago actuals. Boot Barn delivered a trailing four-quarter average earnings surprise of 5.4%.
Capri Holdings operates in the global personal luxury goods industry. It has a Zacks Rank #1 at present.
The Zacks Consensus Estimate for Capri Holdings’ current fiscal-year earnings indicates growth of 136.3%, from the year-ago actuals. CPRI delivered a negative trailing four-quarter average earnings surprise of 707%.
American Eagle is a specialty retailer of casual apparel, accessories and footwear. It carries a Zacks Rank of 2 at present.
The Zacks Consensus Estimate for American Eagle's current fiscal-year earnings and sales suggests declines of 36.2% and 1.5%, respectively, from the year-ago actuals. AEO delivered a trailing four-quarter average earnings surprise of 30.3%.
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TPR Stock Falls 10% Despite Q1 Earnings Beat & Raised FY26 Outlook
Key Takeaways
Tapestry, Inc. (TPR - Free Report) reported impressive first-quarter fiscal 2026 results that exceeded the Zacks Consensus Estimate for revenues and earnings. The company delivered year-over-year growth in its top and bottom lines, and also raised its fiscal 2026 guidance.
However, TPR shares declined 9.6% yesterday as investors reacted to management’s disclosure of significant tariff-related headwinds expected to pressure margins for the year, along with continued weakness at Kate Spade.
Nonetheless, the company showcased broad-based growth in the fiscal first quarter, with the Coach brand driving momentum through strong consumer engagement, especially among Gen Z and Millennials. Tapestry emphasized global gains, with notable strength in North America, Europe and China, supported by product innovation and digital expansion. TPR’s direct-to-consumer model and agile supply chain remain central to its strategy for long-term, sustainable growth across a dynamic retail landscape.
Tapestry, Inc. Price, Consensus and EPS Surprise
Tapestry, Inc. price-consensus-eps-surprise-chart | Tapestry, Inc. Quote
More on TPR’s Q1 Financial Results
Tapestry reported adjusted earnings of $1.38 a share for the fiscal first quarter, which surpassed the Zacks Consensus Estimate of $1.25 and increased 35% from $1.02 in the prior-year period.
Net sales were $1,704.6 million, beating the consensus estimate of $1,640 million. Also, net sales reflected a 13.1% year-over-year increase and 12% growth on a constant-currency basis. Foreign exchange had a positive impact of roughly 70 basis points for the quarter, driven by the depreciation of the U.S. Dollar.
The divestiture of Stuart Weitzman was completed on Aug. 4, 2025. Pro-forma net sales (which exclude net sales of the Stuart Weitzman business on a reported and constant-currency basis) increased 16% year over year to $1,690 million.
In the fiscal first quarter, the company acquired more than 2.2 million customers globally, driven by an increased share of Gen Z consumers from the prior year, who represented approximately 35% of new customers.
Direct-to-consumer revenues increased 16% year over year on a pro-forma constant currency basis, reflecting mid-teen growth across both digital and global brick-and-mortar channels; achieved strong and expanding profitability in both, driven by creativity and Tapestry’s data and analytics capabilities.
Tapestry’s Brand-Wise Sales Details
For the quarter, Coach's net sales were $1.43 billion, beating the Zacks Consensus Estimate of $1.38 billion. This marked a 22% year-over-year increase on a reported basis and 21% growth on a constant-currency basis.
Kate Spade’s sales were $260.2 million, surpassing the consensus estimate of $251.8 million, representing an 8% decline on a reported basis and a 9% fall on a constant-currency basis from the prior-year period.
Stuart Weitzman’s net sales totaled $14.6 million, lagging the consensus estimate of $29.5 million. This marked a 73% year-over-year decrease on both reported and constant-currency basis.
TPR Provides Q1 Revenue Insights by Region
On a pro-forma basis, sales in North America increased 18% year over year to $1.07 billion. Sales in Greater China improved 20% to $269.1 million.
In Japan, sales decreased 7% year over year to $108.5 million, while revenues from Other Asian markets rose 4% to $90.5 million. European markets continued to show strong momentum, with a 39% increase in revenues to $125.2 million, driven by robust local demand and strong tourist spending.
Tapestry’s Margins & Cost Details
The consolidated adjusted gross profit was $1.29 billion, up from $1.13 billion in the year-ago period. Also, the adjusted gross margin expanded by 120 basis points to 76.5%, driven by operational improvements of roughly 170 basis points and a 70-basis-point benefit from the divestiture of Stuart Weitzman, partially offset by a 70-basis-point negative impact of tariffs and duties, and a 60-basis-point currency headwind.
The company reported an adjusted operating income of $353.9 million, up 24% from $285.4 million in the year-ago period. Meanwhile, the adjusted operating margin increased 200 basis points to 20.9%, including a 110-basis-point positive impact of the divestiture of Stuart Weitzman.
Adjusted selling, general and administrative expenses totaled $938.9 million, up 10.5% from $849.5 million in the year-ago period. As a percentage of net sales, this metric declined 80 basis points year over year to 55.6%.
TPR’s Q1 Store Update
As of the end of the fiscal first quarter, the company operated 326 Coach stores and 188 Kate Spade stores in North America. Internationally, the store count stood at 608 for Coach and 170 for Kate Spade.
Tapestry’s Financial Snapshot: Cash, Debt & Equity Overview
TPR ended the quarter with cash, cash equivalents and short-term investments of $743.2 million, long-term debt of $2.38 billion, and stockholders’ equity of $399.5 million.
The operating cash flow for the fiscal first quarter was $112.6 million. The adjusted free cash flow totaled $102.7 million. Capital expenditure and cloud computing implementation costs amounted to $38 million compared with $30 million in the prior year.
In the quarter, Tapestry returned approximately $500 million to shareholders through share repurchases, buying back more than 4.7 million shares of common stock at an average cost of about $106 per share.
For fiscal 2026, the company expects to return $1.3 billion to shareholders, including $1 billion in planned share repurchases and $300 million in annual dividends. The board declared a quarterly cash dividend of 40 cents per share, payable Dec. 22, 2025, to shareholders of record as of Dec. 5, representing an annual dividend rate of $1.60 per share.
What Lies Ahead for Tapestry?
TPR raised its fiscal 2026 outlook, which is provided on a non-GAAP basis. The company expects revenues of $7.3 billion, indicating 4-5% growth from the prior-year actual, while it earlier projected revenues to reach $7.2 billion. Excluding the impacts of the Stuart Weitzman divestiture, pro-forma revenues are anticipated to increase 7-8% on a nominal basis, while foreign currency is expected to provide a 70-basis-point tailwind to full-year results.
The operating margin is expected to expand by about 50 basis points, including 280 basis points of underlying margin expansion, partially offset by a 230-basis-point headwind from tariffs and duties. Previously, the company anticipated more than 250 basis points of underlying expansion, offset by similar tariff and duty impacts.
Earnings per share are forecast at $5.45-$5.60, indicating 7-10% year-over-year growth, compared with the earlier mentioned $5.30-$5.45, suggesting 4-7% growth.
The adjusted free cash flow for fiscal 2026 is projected to be $1.3 billion.
Shares of the company have lost 9.1% in the past three months as compared with the industry’s decline of 3.9%.
TPR Stock Past 3-Month Performance
Image Source: Zacks Investment Research
Zacks Rank & Other Key Picks
The company currently has a Zacks Rank of 2 (Buy).
Some other top-ranked stocks are Boot Barn Holdings, Inc. (BOOT - Free Report) , Capri Holdings Limited (CPRI - Free Report) and American Eagle Outfitters Inc. (AEO - Free Report) .
Boot Barn operates as a lifestyle retail chain devoted to western and work-related footwear, apparel and accessories. It currently flaunts a Zacks Rank of 1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Boot Barn’s fiscal 2026 earnings and sales implies growth of 20.5% and 16.2%, respectively, from the year-ago actuals. Boot Barn delivered a trailing four-quarter average earnings surprise of 5.4%.
Capri Holdings operates in the global personal luxury goods industry. It has a Zacks Rank #1 at present.
The Zacks Consensus Estimate for Capri Holdings’ current fiscal-year earnings indicates growth of 136.3%, from the year-ago actuals. CPRI delivered a negative trailing four-quarter average earnings surprise of 707%.
American Eagle is a specialty retailer of casual apparel, accessories and footwear. It carries a Zacks Rank of 2 at present.
The Zacks Consensus Estimate for American Eagle's current fiscal-year earnings and sales suggests declines of 36.2% and 1.5%, respectively, from the year-ago actuals. AEO delivered a trailing four-quarter average earnings surprise of 30.3%.