TPR

- In the most recent quarter, Tapestry reported revenue growth of 8.9% year on year in line with analyst expectations, while full-year revenue guidance met forecasts but EBITDA exceeded estimates. - However, the company's outlook for the next quarter lagged analyst expectations, highlighting how caution around future demand and sector uncertainty is influencing management's tone. - We'll now examine how Tapestry's weaker-than-expected forward guidance, despite in-line revenue growth, could influence the company's existing investment narrative. Invest in the nuclear renaissance through our list of 16 elite nuclear energy infrastructure plays powering the global AI revolution. To own Tapestry, you need to believe its brands, especially Coach, can keep growing their customer bases and margins despite pressure at Kate Spade and ongoing tariff risk. The latest quarter's 8.9% revenue rise and EBITDA beat support that story, but the weaker near term guidance brings the key catalyst of demand resilience into question and puts more focus on the biggest risk right now that cautious consumer trends could blunt returns on its elevated marketing and AI investments. Against that backdrop, Tapestry's recent decision to lift its quarterly dividend by 16% to US$0.4625 per share stands out as highly relevant. It underlines management's current confidence in cash generation even as the market reacts sharply to softer outlook commentary. For investors watching catalysts, this capital return stance sits alongside the company's AI and direct to consumer efforts, and raises fair questions about how much flexibility Tapestry has if conditions worsen. But while dividend growth can look reassuring, the real risk investors should be aware of is... Read the full narrative on Tapestry (it's free!) Tapestry's narrative projects $9.6 billion revenue and $1.9 billion earnings by 2029. This requires 6.3% yearly revenue growth and a roughly $0.4 billion earnings increase from $1.5 billion today. Uncover how Tapestry's forecasts yield a $166.50 fair value, a 44% upside to its current price. Before this guidance miss, the most optimistic analysts were penciling in about US$10.0 billion of revenue and US$2.0 billion of earnings by 2029, so if you are weighing that against concerns like Kate Spade's long losing streak, it is worth remembering that these bullish views may need updating after such a sharp share price reaction and that reasonable people can read the same numbers very differently. Explore 4 other fair value estimates on Tapestry - why the stock might be worth as much as 64% more than the current price! Disagree with existing narratives? Extraordinary investment returns rarely come from following the herd, so go with your instincts. - A great starting point for your Tapestry research is our analysis highlighting 4 key rewards and 2 important warning signs that could impact your investment decision. - Our free Tapestry research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Tapestry's overall financial health at a glance. Early movers are already taking notice. See the stocks they're targeting before they've flown the coop: - AI is about to change healthcare. These 32 stocks are working on everything from early diagnostics to drug discovery. The best part - they are all under $10b in market cap - there's still time to get in early. - Rare earth metals are an input to most high-tech devices, military and defence systems and electric vehicles. The global race is on to secure supply of these critical minerals. Beat the pack to uncover the 33 best rare earth metal stocks of the very few that mine this essential strategic resource. - Outshine the giants: these 18 early-stage AI stocks could fund your retirement. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include TPR. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

The end of an earnings season can be a great time to discover new stocks and assess how companies are handling the current business environment. Let's take a look at how Tapestry (NYSE:TPR) and the rest of the consumer discretionary - apparel and accessories stocks fared in Q2. The Consumer Discretionary sector, by definition, is made up of companies selling non-essential goods and services. When economic conditions deteriorate or tastes shift, consumers can easily cut back or eliminate these purchases. For long-term investors with five-year holding periods, this creates a structural challenge: the sector is inherently hit-driven, with low switching costs and fickle customers. As a result, only a handful of companies can reliably grow demand and compound earnings over long periods, which is why our bar is high and High Quality ratings are rare.Apparel and accessories companies design, brand, and distribute clothing, handbags, jewelry, and related lifestyle products, often spanning multiple price tiers. Tailwinds include premiumization trends (consumers trading up for perceived quality), international expansion into emerging markets, and growing digital commerce penetration. However, these businesses face headwinds from highly cyclical demand, intense promotional environments, and counterfeit competition undermining brand equity. Tariff volatility and sourcing concentration in a handful of countries add risk. Additionally, rapidly changing fashion cycles and the rise of ultra-fast-fashion digital competitors compress product life cycles and make demand forecasting exceptionally difficult. The 15 consumer discretionary - apparel and accessories stocks we track reported a mixed Q2. As a group, revenues beat analysts' consensus estimates by 1.2% while next quarter's revenue guidance was 4.7% below. Amidst this news, share prices of the companies have had a rough stretch. On average, they are down 15.4% since the latest earnings results. Originally founded as Coach, Tapestry (NYSE:TPR) is an American fashion conglomerate with a portfolio of luxury brands offering high-quality accessories and fashion products. Tapestry reported revenues of $1.88 billion, up 8.9% year on year. This print was in line with analysts' expectations, but overall, it was a mixed quarter for the company with a decent beat of analysts' EBITDA estimates and full-year revenue guidance meeting analysts' expectations. The market seems disappointed with the results as the stock is down 24% since reporting and currently trades at $116.92. Is now the time to buy Tapestry? Access our full analysis of the earnings results here, it's free. Rising to fame via TikTok and founded in 2013 by Heather Hasson and Trina Spear, Figs (NYSE:FIGS) is a healthcare apparel company known for its stylish approach to medical attire and uniforms. Figs reported revenues of $196.6 million, up 28.8% year on year, outperforming analysts' expectations by 5.6%. The business had a stunning quarter with a beat of analysts' EPS and EBITDA estimates. Figs scored the biggest analyst estimate beat and fastest revenue growth of the whole group. The market seems happy with the results as the stock is up 21.2% since reporting. It currently trades at $13.62. Is now the time to buy Figs? Access our full analysis of the earnings results here, it's free. One of the original subscription box companies, Stitch Fix (NASDAQ:SFIX) is an online personal styling and fashion service that curates personalized clothing selections for customers. Stitch Fix reported revenues of $324.4 million, up 4.2% year on year, in line with analysts' expectations. It was a softer quarter as it posted full-year EBITDA guidance missing analysts' expectations significantly and a miss of analysts' EBITDA estimates. Stitch Fix delivered the weakest guidance update and weakest full-year guidance update among its peers. As expected, the stock is down 5.9% since the results and currently trades at $2.66. Read our full analysis of Stitch Fix's results here. With its watches displayed in 20 museums around the world, Movado (NYSE:MOV) is a watchmaking company with a portfolio of watch brands and accessories. Movado reported revenues of $169.8 million, up 4.9% year on year. This print beat analysts' expectations by 3.4%. Overall, it was an exceptional quarter as it also recorded a beat of analysts' EPS estimates. The stock is down 4.3% since reporting and currently trades at $33.45. Read our full, actionable report on Movado here, it's free. Originally founded as a hat store in 1938, Columbia Sportswear (NASDAQ:COLM) is a manufacturer of outerwear, sportswear, and footwear designed for outdoor enthusiasts. Columbia Sportswear reported revenues of $614.4 million, up 1.5% year on year. This number surpassed analysts' expectations by 1.2%. More broadly, it was a satisfactory quarter as it also produced a beat of analysts' EPS estimates but EPS guidance for next quarter missing analysts' expectations. The stock is down 9.7% since reporting and currently trades at $56.72. Read our full, actionable report on Columbia Sportswear here, it's free. Over the past year, investors have been forced to repeatedly answer the same question: what is the market's biggest risk? The answer has changed several times, and each shift has reshaped market leadership. Late in 2025 and early 2026, artificial intelligence became the market's primary uncertainty. Investors questioned whether AI would erode software pricing power and weaken competitive moats as AI made it easier to replicate once-differentiated products. By the spring, technology took a back seat to geopolitics. The U.S. conflict with Iran briefly became the market's dominant narrative, raising concerns about oil prices, inflation, and global growth. But as energy markets remained orderly and fears of a prolonged supply disruption faded, investors quickly turned their focus back to fundamentals. Want to invest in winners with rock-solid fundamentals? Check out our Top 5 Growth Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.

Nike (NKE) stock fell 3.6% on October 2, 2026, the first session after its Q1 FY2027 report, while the S&P 500 rose 0.7%. The fall came even though Nike earned $0.48 a share, ahead of the $0.44 analysts expected. So what did Nike say on its call that mattered more than the earnings beat? Nike Expects A Year Of Shrinking Revenue Management expects revenue to decline by a high-single-digit percentage in fiscal 2027. Nike started giving a full-year outlook on this call, and it included an earnings forecast. Management expects adjusted earnings of $1.15 to $1.35 a share, against analyst estimates of $1.65. The quarter itself fell short on sales. Revenue of $11.21 billion came in 1.9% below what analysts expected. Nike stock also fell further than its peers: over the same session, G-III Apparel lost 0.7% and Tapestry lost 0.9%. The forecast, along with the revenue miss, appears to be what holders were reacting to. How Long Does Nike Expect Sales To Keep Falling? Nike expects the pressure on sales to last through the rest of fiscal 2027 and into fiscal 2028, management said on the Q1 FY2027 call. Nike's revenue rose 0.2% in its last full fiscal year after falling 9.8% the year before, but the pause was short. Revenue fell 4% in the first quarter, and Nike expects a steeper fall for the full year. Part of the decline is deliberate. Nike Sportswear, which made up just under half of quarterly revenue, was down by a low-double-digit percentage. Nike cut revenue from its Dunk line by nearly 50% on purpose, and management said tighter supply should help it sell more at full price. Greater China fell 26%, and management said its actions there will weigh on the region even more than in the first quarter. Nike's performance business grew by a high-single-digit percentage, but management said that business is not yet large enough to offset the rest. What Did Nike's Management Leave Unanswered? Management did not say what gross margin Nike will earn on those lower sales. Asked on the call where gross margin would land for fiscal 2027, management declined to give a forecast. Gross margin was 42.8% in the first quarter, up 60 basis points from a year earlier. Supply chain cost savings and currency helped, though discounts increased in the quarter. Profit is where holders are most exposed, since management expects operating profit to fall by a greater percentage than revenue. Nike said it will update its full-year outlook as the year progresses. Its second-quarter results are the next report where it could do so. If Nike still expects adjusted earnings of $1.15 to $1.35 a share at that report, the year is going as management planned. Does This Mean You Should Act On NKE? Our purpose is to inform you with unique data so you make the right investment decisions. That said, betting on a single stock is always risky, no matter which direction you choose. There is a smarter approach. Since its inception, the Trefis High Quality (HQ) Portfolio has returned 105%, beating the benchmark that combines the three major indices - the S&P 500, S&P Mid-cap, and Russell 2000. And it did so without taking the concentrated risk that comes with do-it-yourself stock picking. If that is how you want to invest, the HQ Portfolio is the place to start.

Tapestry’s second quarter was marked by steady top-line growth and improved profitability, but the market responded negatively as investors weighed future risks and moderating growth expectations. Management attributed the revenue gains to strong customer acquisition, particularly among Gen Z consumers, and continued traction in the core leather goods segment. CEO Joanne Crevoiserat emphasized the company’s “intentional choices, disciplined execution and a deep understanding of the consumer” as key drivers behind the quarter’s performance. Expanded direct-to-consumer efforts and a focus on product innovation also contributed to the healthy operating margin improvement. Is now the time to buy TPR? Find out in our full research report (it’s free). Revenue: $1.88 billion vs analyst estimates of $1.88 billion (8.9% year-on-year growth, in line) Adjusted EPS: $1.32 vs analyst estimates of $1.28 (3.4% beat) Adjusted EBITDA: $407.2 million vs analyst estimates of $382.8 million (21.7% margin, 6.4% beat) Adjusted EPS guidance for the upcoming financial year 2027 is $7.85 at the midpoint, in line with analyst estimates Operating Margin: 23.6%, up from -33.9% in the same quarter last year Locations: 1,299 at quarter end, down from 1,371 in the same quarter last year Constant Currency Revenue rose 11% year on year (8% in the same quarter last year) While we enjoy listening to the management’s commentary, our favorite part of earnings calls is the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention. Matthew Boss (JPMorgan) asked about the moderation in full-year growth guidance compared to Q1 strength. CEO Joanne Crevoiserat stressed that growth is compounding from a higher base, and the outlook balances momentum with prudent planning. Alex Straton (Morgan Stanley) questioned the mix of unit versus average unit retail (AUR) growth. Coach CEO Todd Kahn said the strategy is to prioritize quality sales, with AUR and unit increases expected, and no need for heavy discounting to drive volumes. Irwin Boruchow (Wells Fargo) inquired about North America normalization and category growth. Kahn responded that growth will be intentional and margin-accretive, with a focus on expanding customer base without eroding brand equity. Michael Binetti (Evercore) asked for clarification on gross margin expectations and the impact of tariffs. CFO Scott Roe explained that structural drivers—brand strength, AUR, and international mix—remain supportive, with some quarterly lumpiness due to tariff effects. Robert Drbul (BTIG) requested more detail on international strategy in Europe and China. Crevoiserat and Kahn highlighted ongoing under-penetration, strong local demand, and increased marketing as levers for future growth. In the coming quarters, the StockStory team will monitor (1) the pace of international expansion, particularly in Greater China and Europe, (2) the effectiveness of store renovations and in-store experience upgrades in driving traffic and conversion, and (3) continued success in acquiring and retaining Gen Z customers. Execution on marketing initiatives and the rollout of new product families will also be important signposts. ONE MORE THING: Top 6 Stocks for This Week. This market is separating quality stocks from expensive ones fast. AI is taking down whole sectors with no warning. In a rotation this fast, you need more than a list of good companies. Our AI system flagged Palantir before it ran 1,662% between October 2022 and February 2026. AppLovin before it ran 753% between February 2024 and February 2026. Nvidia before it ran 1,178% between January 2023 and February 2026. Each week it produces 6 new names that pass the same tests. Get Our Top 6 Stocks for Free HERE. Stocks that have made our list include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-micro-cap company Kadant (+214% between June 2020 and June 2025). Find your next big winner with StockStory today.

Tapestry, Inc. TPR enters fiscal 2027 with a tougher earnings test after fourth-quarter adjusted earnings beat the Zacks Consensus Estimate and margins expanded sharply. Management still expects profit growth even as revenue growth moderates.The question is whether operating gains can absorb higher marketing spending and changing tariff pressure. Coach remains the earnings engine, while Kate Spade limits the margin for execution errors. Tapestry, Inc. price-consensus-eps-surprise-chart | Tapestry, Inc. Quote Tapestry expects fiscal 2027 revenues of $8.4-$8.5 billion, representing mid-single-digit growth on a nominal and constant-currency basis. That compares with fiscal 2026 pro forma constant-currency growth of 17%.Coach revenues are projected to rise at a high-single-digit rate, while Kate Spade revenues are expected to decline at a high-single-digit rate. Ralph Lauren Corporation RL provides a sector comparison, with first-quarter fiscal 2027 revenues up 14% reported and 13% in constant currency. Management expects fiscal 2027 operating margin to expand about 50 basis points. The plan includes roughly 30 basis points of gross-margin improvement and 20 basis points of leverage from selling, general and administrative expenses.That follows fourth-quarter fiscal 2026 adjusted operating-margin expansion of 250 basis points to 19.3%. For the full year, adjusted gross margin improved 120 basis points despite a 130-basis-point tariff and duty headwind. The fiscal 2027 outlook embeds a mid-20% tariff rate on U.S. inventory receipts and assumes mitigation will make the year-over-year profit impact roughly neutral. Tariffs are expected to provide a modest first-half benefit before becoming a second-half headwind.Sourcing, product mix and operational offsets therefore matter to the margin target. Levi Strauss & Co. LEVI faced similar pressure in its second quarter of 2026, when gross margin rose 10 basis points despite tariff and foreign-exchange headwinds. Coach represented 86.4% of fiscal 2026 revenues, giving the brand substantial influence over consolidated results. Management expects Coach to maintain an operating margin of nearly 36% in fiscal 2027.Kate Spade remains the counterweight. The brand posted a $27.2 million adjusted operating loss in fiscal 2026, and management expects another modest operating loss in fiscal 2027. Tapestry expects fiscal 2027 adjusted earnings of $7.80-$7.90 per share, representing low-double-digit growth. Adjusted free cash flow is projected to approach $1.7 billion as capital expenditures and cloud-computing costs rise to about $300 million.First-quarter adjusted earnings are expected at about $1.55 per share, up by low teens. Gross margin is projected to expand roughly 120 basis points, but higher marketing spending is expected to keep operating margin in line with the prior-year quarter. Image Source: Zacks Investment Research The fiscal 2027 setup combines a credible margin plan with execution risk. Tariff mitigation, elevated marketing and continued Kate Spade losses leave less room for shortfalls even with Coach providing strong profitability.TPR currently carries a Zacks Rank #3 (Hold), which supports a measured stance rather than a clear near-term buy signal. A Zacks Rank #3 can still be appropriate for holding shares while investors monitor execution and estimate trends. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.The stock also has a Growth Score of A, Momentum Score of A and VGM Score of A, alongside a Value Score of C. The stronger Growth and Momentum Scores point to favorable characteristics in those styles, while the VGM Score reflects the combined weighted style picture and the Value Score is less supportive. Because the Style Scores complement the Zacks Rank, the combined picture argues for patience. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Tapestry, Inc. (TPR) : Free Stock Analysis Report Ralph Lauren Corporation (RL) : Free Stock Analysis Report Levi Strauss & Co. (LEVI) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Never miss an important update on your stock portfolio and cut through the noise. Over 7 million investors trust Simply Wall St to stay informed where it matters for FREE. Tapestry (NYSE: TPR) announced a 16% increase to its quarterly dividend. The company also reported the completion of a sizable share repurchase program. Both moves signal the board's focus on returning cash to shareholders. For investors watching how companies use dividends and buybacks to return cash, it can be useful to compare Tapestry with a wider group of income focused stocks through 12 dividend fortresses. Tapestry is a US based luxury accessories and lifestyle company with a reported market value of about $26.0b, so changes to its dividend and buyback policy can matter for investors who follow larger global brands with broad exposure across North America and Asia. Is Tapestry's dividend sustainable? Check out what every dividend investor needs to know in our dividend analysis. The new quarterly dividend of $0.4625 per share points to an anticipated annual rate of $1.85 per share. How attractive that is for income investors depends on the share price and therefore the yield, which will move with the stock rather than the board's stated per share amount. Tapestry reported full year 2026 net income of $1.5b, with basic earnings per share from continuing operations of $7.49. Against that earnings base, an annual dividend of $1.85 per share implies a payout well below total earnings, although the flagged concerns about an unstable dividend track record and a high level of debt still matter for long term reliability. The combination of a higher dividend and completion of a $1.1b buyback fits with the Narrative that Tapestry is using cash flow from margin improvement and earnings growth to return capital, while still investing in digital, AI and Gen Z customer expansion. It does not remove the longer term risks around tariffs, Kate Spade and reliance on Coach, but it signals management confidence in the current earnings profile. If we take a look at the community Narrative for Tapestry, we can see how this news fits into the bigger investment story. The clearest test will be whether Tapestry can keep earnings per share growing while maintaining or increasing this dividend and continuing some level of buybacks through the 2027 fiscal year. The next few earnings reports and any updates to capital return plans will show if this balance is holding. For the full picture including more risks and rewards, check out the complete Tapestry analysis. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include TPR. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

Joanne C. Crevoiserat, chief executive officer of Tapestry, Inc. (NYSE:TPR), reported a sale of 72,573 shares of common stock on August 19, according toa n SEC Form 4 filing. Transaction value based on SEC Form 4 weighted average sale price ($132.40); post-transaction value based on the August 19 market close ($131.72). What was the primary driver of this transaction?The disposition was non-discretionary in nature, consisting of shares withheld for tax obligations upon vesting and shares sold to cover costs associated with exercising stock options. How does this impact the CEO's total economic interest in the company?Despite the 10% reduction in direct common stock, the executive maintains a significant position of 627,849 direct shares and additional derivative securities, including vested and unvested awards. What is the recent performance context for the stock?The transaction occurred with the stock priced at $132.40 per share, following a one-year total return of 35% as of the August 19 transaction date. Does the company's financial profile support the current valuation?Tapestry reported trailing twelve-month revenue of $7.9 billion and net income of $662.8 million, supporting a market capitalization of $26.6 billion as of the August 19 market close. Tapestry, Inc. operates a diversified portfolio of premium lifestyle brands--Coach, Kate Spade, and Stuart Weitzman--offering luxury accessories, apparel, and home goods across women's, men's, and children's categories, with revenue primarily generated through direct-to-consumer channels and wholesale partnerships. The company employs a multi-brand, geographically diversified business model that leverages distinct brand identities and positioning to capture market share across premium and accessible luxury segments, generating profitability through product design, manufacturing, and global distribution networks. Tapestry's primary customer base comprises affluent consumers in developed markets, particularly in the United States, Japan, and Greater China, with a strategic focus on female consumers while expanding male and children's product categories to broaden the addressable market opportunity. Tapestry, Inc. represents a scaled global luxury conglomerate with $8 billion in TTM revenue and a market capitalization of $26.6 billion, positioning it as a significant player in the accessible-to-premium luxury goods sector. The company's competitive advantage derives from its portfolio of established, heritage brands with distinct market positioning, coupled with sophisticated omnichannel distribution capabilities and strong international presence across key growth markets. The organization's operational scale, brand equity, and demonstrated ability to drive profitability--evidenced by $1.5 billion in TTM net income--underscore its strategic positioning within the global luxury goods market. This filing is basically just tax withholding and housekeeping, but it's worth looking at for a few reasons: 72,573 shares are roughly 10% of Crevoiserat's direct stake, and the move landed six days after Tapestry stock dropped about 16% on an earnings reaction, even though the quarter itself beat guidance.In the earnings report and the call that followed, Tapestry reported hitting its three-year revenue, margin, and EPS targets two years early, with fiscal 2026 revenue up 14% to $8 billion and non-GAAP EPS up 38% to $7.05. What spooked the market wasn't the year that just ended, it was the year ahead. Fiscal 2027 guidance calls for mid-single-digit revenue growth and low-double-digit EPS growth, a deceleration from what Tapestry just delivered, and Kate Spade is expected to post a modest operating loss as the brand keeps investing through a turnaround. Crevoiserat summed up her view of the business simply: "Our success is by design." Whether the market agrees with that framing next quarter is the real question here, not this filing. Before you buy stock in Tapestry, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Tapestry wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $432,189!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,330,956!* Now, it’s worth noting Stock Advisor’s total average return is 967% — a market-crushing outperformance compared to 212% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors. See the 10 stocks » *Stock Advisor returns as of August 22, 2026. Jonathan Ponciano has no position in any of the stocks mentioned. The Motley Fool recommends Tapestry. The Motley Fool has a disclosure policy. Tapestry's CEO Gave Up Stock Right After a Rough Earnings Reaction. Here's What to Know was originally published by The Motley Fool

Image source: The Motley Fool. Thursday, Aug. 13, 2026 at 8:00 a.m. ET Global Head of Investor Relations - Christina Colone Chief Executive Officer - Joanne Crevoiserat Chief Financial Officer and Chief Operating Officer - Scott Roe CEO and Brand President of Coach - Todd Kahn Operator: Good day, and welcome to this Tapestry conference call. Today's call is being recorded. [Operator Instructions] At this time, for opening remarks and introductions, I would like to turn the call over to the Global Head of Investor Relations, Christina Colone. Christina Colone: Good morning. Thank you for joining us. With me today to discuss our fourth quarter and full year results, our strategies and our outlook are Joanne Crevoiserat, Tapestry's Chief Executive Officer; and Scott Roe, Tapestry's Chief Financial Officer and Chief Operating Officer. Before we begin, we must point out that this conference call will involve certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act. This includes projections for our business in the current or future quarters or fiscal years. Forward-looking statements are not guarantees, and our actual results may differ materially from those expressed or implied in the forward-looking statements. Please refer to our annual report on Form 10-K, the press release we issued this morning and our other filings with the Securities and Exchange Commission for a complete list of risks and other important factors that could impact our future results and performance. Non-GAAP financial measures are included in our comments today and in our presentation slides. For a full reconciliation to corresponding GAAP financial information, please visit our website, www.tapestry.com/investors, and then view the earnings release and the presentation posted today. Now let me outline the speakers and topics for this conference call. Joanne will begin with highlights for Tapestry and our brands. Scott will continue with our financial results, capital allocation priorities and our outlook going forward. Following that, we will hold a question-and-answer session where we will be joined by Todd Kahn, CEO and Brand President of Coach. After Q&A, Joanne will conclude with brief closing remarks. I'd now like to turn it over to Joanne Crevoiserat, Tapestry's CEO. Joanne Crevoiserat: Good morning. Thank you, Christina, and welcome, everyone. Fiscal 2026 was a defining year for Tapestry. We meaningfully exceeded expectations, achieving the 3-year revenue, operating margin and earnings per share commitments we established at our Investor Day 2 years ahead of plan. We delivered strong growth and record results while continuing to invest in our brands, our people and the capabilities that will shape our future. More important than what we accomplished is what we've built. Through intentional choices, disciplined execution and a deep understanding of the consumer, we have built a stronger, more focused organization who every day bring our Amplify strategy to life, delivering creativity, value and relevance at scale, strengthening our connections with consumers. These efforts continue to compound, extending our competitive advantage while driving durable growth and long-term shareholder value. In a world where consumer expectations, technology and competitive dynamics continue to evolve, the combination of our direct consumer relationships, data-driven decision-making, global scale and agile operating model has become increasingly valuable and differentiated. With that, let me touch on some highlights for the year. We achieved revenue of $8 billion, growing 17% on a pro forma constant currency basis, expanded operating margin by 340 basis points to over 23% and increased earnings per share by 38% to $7.05. Growth was fueled by customer acquisition as we welcomed 11 million new customers to our brands, led by Gen Z. Importantly, we accelerated growth in our core leather goods category with AUR and unit growth. Luxury leather goods remains one of the most attractive categories within the consumer space because of its enduring demand, compelling economics and significant runway for growth. In addition, we delivered broad-based double-digit growth across key regions, gaining share and expanding the market. Our agile direct-to-consumer-led operating model drove double-digit revenue growth and increasing profitability across both digital and stores. Further, Tapestry is committed to embracing AI to enhance the magic of our people and our brands. To that end, we continue to build proprietary technology and AI capabilities that differentiate how we operate and empower our teams. During the year, we secured our first AI patent, building on our previously patented data fabric technology. Together, they reflect our culture of innovation and more than a decade of investment in data, decision intelligence and enterprise technology. Overall, our fiscal year '26 results demonstrate the power of our approach to brand building. We continue to win with consumers at the point of market entry, welcoming younger customers who transact at higher AURs, have stronger retention and influence purchasing behavior across generations. This reinforces our confidence that our greatest opportunities lie ahead. Now moving to our results by brand. Coach delivered another strong quarter with constant currency revenue growth of 14% and increasing profitability. This capped an exceptional year and reinforced the enduring strength of our iconic 85-year-old brand. Several factors underscore the durability of our growth. We drove new customer acquisition around the world, welcoming over 2 million new consumers in the quarter and nearly 9 million for the full year. Growth was led by Gen Z, whose influence extended across generations. At the same time, existing customers continue to drive strong sales. Underpinning these results is Coach's consumer-led approach, consistently translating deep consumer insights into action to build lasting emotional connections with the brand. Our core leather goods assortment continued to lead in Q4, with handbag AUR increasing at a mid-teens rate and unit volumes roughly in line with the prior year, both consistent with expectations and our deliberate strategy to prioritize brand health and reduce promotions. For the year, handbag AUR rose mid-teens and units increased low double digits, demonstrating the multifaceted nature of our growth. Looking ahead, we continue to see opportunity to grow both AUR and units while staying true to the values and the value proposition that define Coach. Further, our strong results continued across key geographies in the fourth quarter, including North America up 10%, Greater China rising 30% and Europe increasing 25%, highlighting the global resonance of the brand. Coach is bringing new consumers into the category and growing the market. Given the strength of the brand and our large addressable market, we continue to see a clear path to Coach becoming a $10 billion brand. Now to cover our fourth quarter results in more detail. Our creative teams continue to execute with clarity and purpose, delivering product innovation that is resonating with consumers. Our icons continued to outperform, consistent with our strategy with broad-based strength across the assortment. The New York family, including Brooklyn, Empire and Chelsea, along with the Tabby and Teri families, drove strong Gen Z acquisition and reinforced Coach's leadership in its core category with a robust innovation pipeline ahead. Structurally, we concentrate product innovation behind core families that build over time while remaining disciplined in our pursuit of growth. More broadly, our results reflect the strategic choices we've made to strengthen the brand. Perhaps the most significant has been our One Coach strategy. By deliberately blurring the traditional industry lines between retail and outlet channels, bringing collection product at full price into outlet and unifying our digital experience through a single coach.com, we've aligned our approach with how consumers shop today, creating a stronger, more consistent global expression of the brand. This has driven customer acquisition, higher AURs and growth around the world. Next, turning to footwear. We delivered high teens growth in the quarter with increasing demand from Gen Z. Sneakers continued to fuel the growth driven by the success of the Soho family, along with continued strength of Margot. Footwear remains a long-term growth opportunity for Coach, given our brand strength, low share of the market and the category's relevance to our target consumer. Turning to marketing. Our strategic investments continue to generate compounding benefits this quarter. We increased marketing spend by approximately 20% versus the prior year with a continued shift toward top-of-funnel brand building to support sustained customer acquisition. Coach's Explore Your Story campaign continued to resonate, supporting increased unaided awareness and reinforcing Coach's top-of-mind presence among Gen Z. Building on this momentum, we launched &Coach, a campaign co-created with Gen Z that celebrates moments of becoming and the confidence a Coach bag can champion along the way. Additionally, our partnerships extended Coach's reach into new communities and cultural conversations as we launched the second season of our WNBA partnership, strengthening the brand's connection at the intersection of fashion, sports and culture. Collectively, these actions are reinforcing Coach's cultural relevance and driving customer acquisition. More importantly, they strengthen a competitive advantage, a deep understanding of the consumer and an ability to consistently translate those insights into demand creation at scale. And finally, we deepen consumer engagement through distinctive brand experiences. We continue to roll out our expressive luxury store concept globally. These stores are driving higher traffic and longer dwell times, particularly among Gen Z consumers, supporting our plan to expand the concept to impact approximately 80% of our traffic by fiscal year '30. In addition, Coach Play continues to serve as both a destination for consumers and a source of inspiration for our broader store strategy. New Coach Play locations in Chicago, Atlanta and Le Marais in Paris are helping build brand desire with our target consumers. Together, these investments reflect our conviction that physical retail remains one of our most powerful opportunities to express the brand as consumers invite us into their world to share important moments in their life, extending the connection well beyond a transaction. In closing, my confidence in the future of Coach is grounded in the combination of an iconic brand, a deep understanding of today's consumer and an organization that continues to thoughtfully steward and evolve the brand, preserving what makes it distinctive while ensuring it remains relevant for new generations of consumers. I believe that combination positions Coach for continued leadership, meaningful growth and long-term value creation. Turning to Kate Spade. Our strategy for Kate Spade has been deliberate and phased: streamlining the business, solidifying the foundation and positioning the brand to scale. At its core, that means building greater brand desire and relevance to drive sustainable, profitable growth. In fiscal year '26, we remain disciplined in executing that strategy, making choices that improve the quality of the business. Although top line progress was more gradual than we planned, our experience has given us greater clarity on where consumers are responding, where our investments are driving results and where we need to focus going forward. Now turning to our strategic pillars and fourth quarter results. First, we are committed to fueling brand desirability supported by marketing. During the fourth quarter, we focused on increasing the reach and relevance of our full funnel marketing activities, which resulted in higher brand consideration among Gen Z in our latest U.S. Brand Health Tracker. In addition, our first creator-led YouTube campaign drove an increase in purchase intent well ahead of the platform benchmark, showing traction in our work. We also know that we need more consumers to engage with our content as unaided brand awareness more broadly has not yet improved, and this is a key part of driving acquisition and ultimately growth. As we enter fiscal year '27, we'll build on these learnings through creator partnerships and activations that drive brand awareness and desire. We're also pleased to welcome Allison Badea as Chief Marketing Officer, who brings deep brand-building experience from the luxury and beauty industries. Next, we continue to build a more focused assortment grounded in consumer insights. Our handbag blockbusters, led by the Margot, 454 and Duo families, contributed to continued improvement in handbags and drove customer acquisition, particularly among Gen Z consumers. We welcomed over 450,000 new customers during the quarter and approximately 2 million for the full year, with these consumers transacting at higher AURs than the balance of the customer base, a foundational element of our strategy. Finally, we continue to focus on creating compelling omnichannel experiences. Our light-touch renovation program, designed to bring more color and emotion to our stores, continued to drive a lift in sales through improvements in conversion and average transaction value, and we're expanding those learnings across additional locations. Looking ahead, as we move from streamlining to solidifying our foundation and preparing to scale, we're focused on further strengthening our creative execution and product and storytelling. The appointment of Jonathan Saunders as Executive Creative Director, working alongside Eva, will advance our efforts to bring uplifting luxury to life for a new generation of consumers with the distinctiveness of joy and femininity inherent in this iconic brand. To close, Kate Spade has significant long-term potential, and our conviction in that opportunity remains unchanged. We'll continue focusing our efforts and investment behind the initiatives that are strengthening the brand and positioning it for sustainable, profitable growth over time. Before turning it over to Scott, I'd like to come back to Tapestry's vision: to give more people the power to bring their own style and story into the world. Throughout fiscal 2026, we realized that vision by welcoming millions of new consumers to our brands, deepening our relationships with existing consumers and delivering the creativity, value and relevance that inspire self-expression across generations and geographies. Our success is by design. We will continue to stay curious, remain focused and earn the trust of consumers every day. This is how we will continue to build advantages that compound, delivering durable growth and long-term shareholder value. With that, I'll now hand it to Scott. Scott Roe: Thanks, Joanne, and good morning, everyone. As Joanne highlighted, we achieved the financial commitments we established at Investor Day 2 years ahead of plan, driving a step change in our earnings power and cash flow generation. From this stronger foundation, we enter fiscal 2027 confident in our ability to deliver mid-single-digit annual revenue growth, continued operating margin expansion and low double-digit EPS growth, consistent with our long-term commitments. Importantly, our competitive advantages translate into a differentiated financial model. We operate in an attractive category with durable demand and compelling margin characteristics. As we continue to welcome new customers to our brands and category, we generate higher quality growth and strong cash flow, supported by disciplined capital allocation. That combination gives us the power and flexibility to consistently invest in the business while returning meaningful capital to shareholders. With that, let me walk through our fourth quarter results in more detail, starting with revenue trends on a pro forma constant currency basis. Sales increased 11% compared to the prior year, highlighted by strong global momentum. North America sales rose 7% compared to the prior year, driven by a 10% increase at Coach, where we continue to drive healthy growth at expanding gross margins. In Europe, revenue grew 19% versus last year, fueled by continued strength in our direct business and robust new customer acquisition, particularly among Gen Z. Local consumers continue to drive growth, contributing to meaningful market share gains in the region. Given our relatively low penetration, we believe Europe remains a compelling long-term growth opportunity. Now turning to Greater China. Revenue rose 28%, driven by broad-based growth across channels, led by digital and strong customer acquisition. We are winning with Gen Z consumers through compelling creativity and relevant activations, contributing to significant market share gains. Given the size of the opportunity and the momentum we're seeing in the business, we're continuing to make strategic investments in the region, positioning us for long-term growth in this important market. In Other Asia, revenue increased 22%, led by growth in South Korea and Australia. And in Japan, sales declined 4%, as expected, reflecting our intentional pullback in promotions. Now touching on revenue by channel for the quarter. Our D2C-led model continued to drive strong results, with direct-to-consumer revenue increasing 11%. Digital sales grew approximately mid-single digits, while global brick-and-mortar sales increased in the mid-teens. Importantly, all channels delivered strong and increasing profitability. Moving down the P&L, we continue to drive healthy gross margin expansion, delivering a fourth quarter gross margin of 78.1%, up 180 basis points versus last year. This was driven by an operational increase of 170 basis points as well as a favorable 60 basis point impact from the divestiture of Stuart Weitzman. These benefits more than offset a tariff and duty headwind of approximately 60 basis points, including approximately 30 basis points at Coach and approximately 250 basis points at Kate Spade. Overall, our strong gross margin remains a core element of our value creation model, supported by an agile supply chain that enables us to deliver craftsmanship at scale, one of Tapestry's key competitive advantages. Turning to SG&A. Expenses increased 8%, while leveraging 80 basis points versus last year. This was inclusive of a 130 basis point increase in marketing, which represented 14% of sales in the quarter. Together, this reflects strong operational discipline and our continued ability to invest behind growth while expanding profitability. Overall, operating margin expanded 250 basis points in the quarter, driving a 25% increase in operating income and exceeding our expectations. Fourth quarter EPS of $1.32 increased 28% versus last year, also exceeding our guidance despite a headwind of more than $0.05 from a higher tax rate versus plan due to a number of discrete items. Now turning to shareholder returns. In fiscal '26, we returned $1.7 billion to shareholders. This included $326 million in dividends and $1.35 billion in share repurchases, representing approximately 11.5 million shares at an average price of $118 per share. Turning to fiscal '27, we expect to return another $1.7 billion to shareholders. Our Board approved a 16% increase in the dividend to an annualized rate of $1.85 per share, and we expect to repurchase approximately $1.35 billion of shares, underscoring our confidence in the future. Our ability to return significant capital to shareholders while continuing to invest for growth reflects the strength of our business and the consistency of our free cash flow. And now, before turning to the details of our balance sheet and cash flows, I'd like to reiterate our capital allocation priorities, which are unchanged. We have 2 foundational commitments: first, to invest in our brands and business to support long-term sustainable growth; and to return capital to shareholders via our dividend, with the goal over time to increase the dividend at least in line with earnings growth. Beyond these 2 foundational commitments, our robust cash flow generation provides us with balance sheet flexibility for value creation. This includes the opportunity for share repurchase activity under our previously announced share repurchase authorization. And finally, utilizing our rigorous 4-lens framework, we consistently evaluate opportunities for strategic portfolio management. Importantly, and as previously communicated, before moving forward with any acquisitions, we will ensure Coach remains strong and Kate Spade has returned to sustainable top line growth. These clear capital allocation priorities are underpinned by our firm commitment to a solid investment-grade rating and maintaining our long-term gross leverage target of below 2.5x. Now turning to the details of our balance sheet and cash flows. We ended the year with nearly $1.2 billion in cash and short-term investments and total borrowings of $2.4 billion, representing net debt of $1.2 billion. Our gross debt to adjusted EBITDA leverage ratio was 1.1x, more than a full turn below our long-term target. Adjusted free cash flow totaled $1.86 billion for the year, and CapEx and cloud computing costs were $217 million. Inventory levels at year-end were 4% below prior year, slightly below expectations due to a shift in receipt timing into Q1. For fiscal '27, we expect inventory levels to increase year-over-year in support of our growth ambition. Now moving to our guidance for fiscal '27, which is provided on a non-GAAP and comparable 52-week versus 52-week basis. Our full year guidance remains consistent with the long-term financial algorithm we established at Investor Day. Now turning to the details. For the fiscal year, we expect revenue of $8.4 billion to $8.5 billion, representing mid-single-digit growth on a nominal and constant currency basis. FX is expected to be a 40 basis point tailwind for the year. Touching on sales details by region on a constant currency basis. As we've previously discussed, our long-term algorithm contemplates disciplined growth in North America and an increasing contribution from international markets, where our brands remain underpenetrated and we see substantial opportunity over time. In North America, we expect revenue to increase low single digits. In both Europe and Greater China, we expect growth of mid-teens. In Japan, we're forecasting a return to growth. And in Other Asia, we anticipate high single-digit gains. By brand, this guidance incorporates high single-digit growth at Coach and a high single-digit decline at Kate Spade. In addition, our outlook assumes operating margin expansion of 50 basis points to nearly 24%, driven by both an increase in gross margin and SG&A leverage. This reflects our continued ability to invest behind our brands while expanding profitability. We expect gross margin to increase by approximately 30 basis points, driven by operational improvements and favorable geographic and brand mix. Embedded in our outlook is the assumption for a mid-20s percent tariff rate on U.S. imports for fiscal '27, resulting in a roughly net neutral P&L impact year-over-year, including mitigating actions. On SG&A, we expect approximately 20 basis points of leverage, reflecting disciplined expense management while continuing to invest behind brand growth. For some texture on operating profit by brand, we expect Coach to maintain its best-in-class operating margin of nearly 36%. At Kate Spade, we expect a modest operating loss, reflecting continued investment in the brand. Corporate expenses are expected to leverage for the year, a trend we expect to continue. Moving to below-the-line expectations for the year. Net interest expense is expected to be approximately $55 million. The tax rate is expected to be approximately 18.5%, and our weighted average diluted share count for the year is expected to be approximately 203 million shares. Taken together, we expect EPS of $7.80 to $7.90, representing low double-digit growth versus the prior year. As a reminder, our guidance is provided on a comparable 52-week basis. Fiscal 2027 includes a 53rd week, which is expected to contribute approximately 1 percentage point of annual revenue growth and have neutral impact on operating margin. Moving on, we anticipate adjusted free cash flow to approach $1.7 billion. And finally, we expect CapEx and cloud computing costs to be in the area of $300 million or 3% to 4% of revenue. This reflects a step-up in investment to support future growth, including incremental investment in Coach's store fleet through new openings and renovations. Approximately 70% of our spend will be related to growing and enhancing our fleet, with the balance primarily supporting our ongoing technology and digital investments. Before turning to the first quarter, let me briefly comment on our approach to guidance and the shape of the year. Our current quarter guidance reflects our latest thinking, while the balance of the year embeds in aggregate the long-term financial algorithm we've established. On the phasing of the year, keep in mind that we continue to operate in an environment of macro uncertainty and evolving tariff dynamics alongside shifts in the cadence of our marketing investments. As a result, quarterly profitability will be uneven, with tariffs providing a modest benefit in the first half of the year before becoming a headwind in the second half. Generally, revenue is forecasted to grow high single digits in the first half of the year and mid-single digits in the second half, with Q4 above Q3 given prior year compares. From an EPS standpoint, we're incorporating low double-digit growth in both the first and second half. Touching on Q1 guidance specifically. We expect revenue growth of high single digits on both a nominal and constant currency basis versus prior year pro forma revenue. This includes low teens growth at Coach, which represents mid-30s growth on a 2-year stack basis. And at Kate Spade, we've embedded a low double-digit decline. Turning to margins. We expect gross margin to increase by 120 basis points in Q1, offset by higher SG&A due entirely to continued increases in marketing, resulting in operating margin in line with prior year. Taken together, Q1 EPS is forecasted to be approximately $1.55, a low teens increase. In closing, fiscal 2026 demonstrated both the quality and potential of our business. We achieved Tapestry's revenue, operating margin and EPS commitments established at our Investor Day 2 years ahead of plan while continuing to invest in our brands, capabilities and future growth and returning $1.7 billion to shareholders. We enter fiscal 2027 with confidence. Our outlook is consistent with the long-term financial algorithm we established at Investor Day, reflecting the durability of our model and the quality of our growth. The strength of our category, our brands and our operating model gives us the power and flexibility to consistently invest for growth while returning meaningful capital to shareholders. These advantages continue to compound, driving durable growth and long-term shareholder value. I'd now like to open it up for your questions. Operator: [Operator Instructions] We'll take our first question from Matthew Boss with JPMorgan. Matthew Boss: Congrats on a nice quarter. So Joanne, you delivered a very strong fiscal '26 and are guiding the first quarter to continued strong growth, particularly at Coach. But the full year outlook does embed some moderation as the year progresses. Could you just walk us through how you're thinking about the setup for fiscal '27, including current demand at the Coach brand relative to that low teens guide for the first quarter? And what gives you confidence in the durability of growth in the back half and beyond from here? Joanne Crevoiserat: Matt, we're incredibly confident in the durability of our growth. And as we think about the setup for fiscal '27, I'll just step back and provide a little context. As you mentioned, we had a strong fiscal '26, where we achieved our Investor Day commitments 2 years ahead of plan while strengthening the company for the long term. And this is a critical point because we see that our greatest opportunities are still ahead of us. In fiscal '27 and beyond, we're growing from a higher base while maintaining our algorithm. The algorithm that we rolled out at our Investor Day, we're maintaining that algorithm for durable growth into the future. And more important than the results we delivered last year, which are incredible, it's the business we built to deliver them. Over the last several years, we've strengthened our brands, we've deepened our direct-to-consumer relationships, and we've expanded our global reach and built differentiated capabilities, as I said in my prepared remarks, in data, decision intelligence and AI. We also meaningfully improved profitability and cash generation, which increases our capacity to invest behind future growth. These are the capabilities that matter because they extend beyond a single quarter. They help us translate those consumer insights to action at scale and deliver that creativity, the value and the relevance to consumers around the world. So as we enter fiscal '27, we see that strength continuing, led by Coach, where our performance remains strong across new and existing customers and in our core category, our core leather goods category. So the takeaway is that fiscal '26 demonstrated the power of our strategy and our Q1 and fiscal '27 outlook reinforces our confidence in the durability of what we've built into the future. But I'll turn it over to Scott to cover the details and the cadence of our guidance. Scott Roe: Just building on what Joanne just said, we had a great '26, and we're a bigger business, we're more profitable, we're generating more cash, which really puts us in a position of strength as we think about our entry into '27 in the guide. And our outlook reflects that confidence, but also discipline in how we give guidance and how we plan. Q1 does capture our current estimates for the business. We expect low teens revenue growth at Coach. That's consistent with what we delivered in Q4. So the momentum continues. And importantly, our full year guide doesn't require us to keep that same level of growth at Coach for the balance of the year. So we believe, as we sit here today, that's a prudent approach. For fiscal '27, we expect mid-single-digit revenue growth, continued operating margin expansion and low double-digit EPS growth. At Tapestry, that's consistent with the long-term framework we established at our Investor Day from a meaningfully higher base. At Coach, we continue to expect growth above our brand's Investor Day framework at best-in-class margins. So we're comping the comp. So put simply, Q1 reinforces our confidence. We've built the full year outlook to reflect the breadth, flexibility and discipline of the model that we built. Operator: We'll move on now to Alex Straton with Morgan Stanley. Alexandra Straton: Congrats on a great quarter. I wanted to focus from a guidance perspective on what you're assuming from a unit versus AUR perspective after such strong AUR growth in recent years. And can you also just dive into -- in the fourth quarter, if units were flat and kind of what was driving that? Todd Kahn: I'll start and participate with Scott. We love the mix on AUR and units that we delivered in the fourth quarter. And I think, again, what's important is the quality of our sales. We are very focused on durability and quality. And what you saw in the fourth quarter is a lot of our growth came from AUR, and we were in line on units, which was by design. We had fewer promotion days in the fourth quarter. And one of our strategies that we talk a lot about, you heard it in Joanne's prepared remarks, is our One Coach strategy. Remember what One Coach allows us to do. It recognizes the consumer sees brands and not channels. So that has allowed us to put our collection product in our outlet stores, attaining higher AURs and full price. And you're going to continue to see that. So throughout the year ahead, we'll see AUR gains across the globe, and you'll also see unit gains. But what we're not going to do, we have no need to do is churn units to make our numbers. And you see that in this world-class gross margin that we're maintaining. So I feel very good about our mix. And ultimately, as we continue to bring new customers into the category because remember, Coach is growing the category globally. That will, over time, increase our unit counts as well. Scott Roe: Yes. And I'll just make a quick build on Todd's comment, Alex. First of all, Q4 came exactly like we expected as it relates to units. Remember, we had some shifting of timing of promotional events and also we had exceptional sell-through in Q3, which took some of those units from Q4 to Q3. So as it relates to the unit dynamic, it occurred exactly as we expected. Actually, we beat the guide in total and actually did a little bit better on an overall basis for Coach. And I just want to reiterate going forward, our expectation, what's embedded in our guidance assumes both unit and AUR growth in '27 and beyond. Operator: We'll move on now to Ike Boruchow with Wells Fargo. Irwin Boruchow: A couple of questions. I'll fit into one question on North America. So basically, at Coach North America, you guys have been moderating off of the big growth rates that you put up pretty smoothly. I think it was mid-20s in the first half, mid-teens in the back half. I'm just curious how you're thinking about the normalization of domestic growth at Coach. And to that point, up 10% in the fourth quarter, how much of a headwind was there to North America growth on some of the shifts you had called out last quarter? And then what kind of North America growth underpins that first quarter low teens global Coach guide you guys gave? Todd Kahn: Yes. We love the position we have at Coach in North America. And again, when -- Scott just indicated, some of the North America foundational, we had an outstanding third quarter and took a lot of units. And then in the fourth quarter, we intentionally reduced our promotion days. So we feel very good about our North America growth. We're going to -- you're going to see us grow. We grew beyond the category in the fourth quarter. So that's an important milestone. And what we love is what we said we were going to do. We're 2 years ahead of our plan. We are delivering something on a much higher base. We took the global floor up from mid-single digits to high single digits for this year. And remember what we told you we would do: 70% of our growth is coming internationally. That said, we love our North America position, and you're going to continue to see us grow in North America. But we're going to -- we're growing on a very large base, and we're going to grow very intentionally, not degrading the brand, not degrading our margin and continuing to focus on bringing new customers into the category. Scott Roe: Yes. And a quick build on the numbers, Ike. If you look at the Coach guide for North America, again, as Todd said, it's really above our Investor Day expectations for '27. And a little bit more on that. If you look at the 2-year stack for North America Coach in both Q4, Q1 and the full year guide, it's about 30%, right? So we're comping the comp. We're consolidating the exceptional growth from last year and compounding that as we look forward into '27, and that's embedded in our guide here. So the strong momentum in Coach continues, and we have a lot of confidence in our growth, not only in Coach overall, but in Coach North America specifically. Operator: We'll move on now to Michael Binetti with Evercore. Michael Binetti: First off, let me just say thanks for bringing us out to headquarters tomorrow. Look forward to seeing you guys learning about AI. Scott, can I just ask a little clarification on Ike's question? Should we think about a 30% 2-year stack on the North America Coach business in the first quarter and then we just kind of pencil that through the rest of the year to kind of hold that stability against those tough compares that continue through the year? And then maybe just a little bit on the gross margin bridge. I think it implies almost no expansion after first quarter despite, I think, a lot of the growth coming from the Coach brand, from China, from the high gross margin categories. Maybe just a bit of a bridge on the growth throughout the year. Scott Roe: Yes. So we can't wait for you guys to come. A couple of dozen of our closest friends going to see what we're doing in the AI world and really talk about how this is really a competitive advantage for Tapestry. Joanne mentioned it, and we're excited to talk about it because we think it's truly part of the moat of what makes Tapestry special. Yes. So for gross margins, listen, it's going to be a little lumpy through the year. We also talked in my prepared remarks about the impacts of tariffs, which are a net benefit in the first half and that tailwind in the second half, kind of a push on a year-on-year basis. I think the important thing to take away here is we are growing gross margin about 30 bps for the year. It's implied in our guidance. And the structural drivers of gross margin, which we've talked about over and over, the strength of our brands, AUR, AUC, the fact that international margins are higher and we're growing more outside the U.S., all those structural drivers are unchanged and remain just as true today as they have been. As we sit here today, we think the guidance we've given is prudent looking how much real estate we have. But don't take away from that any change in terms of those structural growth drivers. They're still in place. Michael Binetti: Okay. And then the North America? Scott Roe: In terms of North America, well, I think you reiterated what I said in terms of -- we see low single-digit growth in North America, overall, that's consistent with our long-term algorithm. But as I said earlier, Coach at mid-single digit in both Q1 and for the full year is really above our expectations and really continues the momentum that we've seen in North America specifically. Operator: We'll move on now to Bob Drbul with BTIG. Robert Drbul: I was just wondering if we could shift a bit and spend some time just expanding on the international growth, I guess, specifically in Europe and in China, sort of what you're seeing in both markets and just the expectations on how to drive those businesses forward in fiscal '27 and beyond. Joanne Crevoiserat: Thanks, Bob. Maybe I'll start and then toss it to Todd for some color. We just reported a strong fourth quarter and an amazing fiscal year. Our business was strong around the world, and we're seeing broad-based strength. We just talked a lot about the strength we're seeing in North America, and we see that continuing for Coach with further growth ahead. But as we look forward, international does become a larger contributor to our growth, and we see continued opportunity. So in China, as an example, we delivered over 30% growth on the year in China. We're driving that through new customer acquisition. That growth is broad-based across the market. And we are well outpacing the industry in China, and we see tremendous opportunity as we move forward in China to continue to drive growth just based on our relatively low brand awareness in the market and the opportunity that we see for further penetration, more new customer acquisition and the traction that we have, particularly with this young consumer. And if I shift to Europe, the opportunity is the same. We have relatively low penetration in the market. We are gaining traction with a local and younger consumer, and we have an opportunity to continue to drive growth in Europe as well. But maybe, Todd, I send it to you for a little bit more color on how you're thinking about that growth. Todd Kahn: Thanks, Joanne. Let's -- I'll kick off where you left off Europe. I mean we've had multiple years of double-digit growth, and we truly early innings. When we even talk about Europe, we're only penetrated in any material way into the U.K. and some wholesale and some marketplace. We now are taking France. We opened a new store in Le Marais, a Coach Play store, which is the heart of where young people shop. It's a good beacon for our brand. But the 35, 40 countries that we can still tackle in Europe gives us a huge runway. And what's important about the Coach brand positioning in Europe and in China is the value and value proposition. The absolute underlying value of our product, our bags is cutting through, and it's clear. That's why we're winning, and that's why we're competing. And we're supporting that by incredible storytelling and marketing. And if I go to China now, we underinvested in China over the years. Today, we're trying to bring our marketing in line with our overall marketing expense. And that is the fuel that creates demand in the market. So our marketing is a driver of business. And what I love is our position in China. Again, I'll remind everybody, we've been there for 25 years. We have deep roots in China. We have rich teams in China who understand the culture. We make sure that our brand, our product offering resonates with that customer. And we're also not limited because of our expressive luxury position to simply go where traditional European luxury goes. We go where the Gen Z customers want to shop. That's a huge unlock for us, and you're going to see us grow materially in China, in Europe and continue to grow in rest of Asia as well. Operator: We'll move on now to Jay Sole with UBS. Jay Sole: You talked a lot about your confidence in maintaining the momentum at Coach brand. Can you talk a little bit more about product? I'd say the Brooklyn family has been such a great product franchise for the brand. Can you talk about some of the ideas you have that you have confidence in, in the future and what we're going to see from a product standpoint that give you that confidence that the momentum can continue? Todd Kahn: Sure. I'll even open the aperture up just a little bit about my confidence because I want to remind everybody, we're an 85-year-old brand. And even as an 85-year-old brand, this last year, we recruited 9 million new customers. That's powerful. But we're not resting on our history or relying on our momentum. What gives me confidence overall is the clarity that we bring to all facets of our business, the clarity on our purpose, our customers, our product, our marketing, our people and our culture. And I will say that clarity is greater today than any time in my 19 years here at Coach and quite honestly, greater than anything I've seen in 30 years in this industry. And it does start with our purpose. And I know sometimes, with this crowd, in the investment crowd, talking about purpose, your eyes sometimes glaze over, but it matters. Our purpose and our courage to be real and our aspiration of being the most inclusive, authentic and loved fashion brand matters to our people, and it is a rallying cry, and it drives outcomes. That leads to our customers. We have clarity of who we are designing for this point of market entry, what you heard Joanne and Scott talk about, which is a large TAM that we can go after, 25 million women turning 18 every year in the markets we play that can afford our bags, which leads back to your -- the essence of your question, which is our product. And what Stuart Vevers and our design teams and our merchant teams are doing is phenomenal. We are building on diverse yet very clear platforms of product. We talk about our icon, Tabby. We have a lot of runway to continue to evolve Tabby, and we have not seen any slowdown in Tabby. Similarly, our New York family, Brooklyn, is doing extraordinarily well. And again, it's a multichannel concept that we sell at full price across many different -- frankly, all of our different avenues of sale. And even under the New York family, we've expanded ideas like our Chelsea bag, which all of a sudden was only a year old and is now appearing on the top 10. So these very large platforms, as well as Teri, we sometimes refer to them as TNT here, which has led to this explosive growth. We feel very good about our product offering and our assortment backed by our marketing stories. So net-net, the product is strong. The clarity of our messaging is strong. And I think we have an incredible setup, not just for the year ahead, but for our aspirations of $10 billion. And I'm starting to think about how much further we go beyond $10. Operator: We'll move on now to Adrienne Yih with Barclays. Adrienne Yih-Tennant: Congrats. Very nicely done. Todd and/or Joanne, I'm going to stay on that topic. When I look at the metrics that you reported, I expected the ones on the P&L, the one that really surprised -- was nicely to -- surprising was the customer acquisition. To me, that represents sort of future demand and kind of gives me some confidence about this flywheel. So that being said, can you talk about just the white space in pricing, entry level pricing, the Gen Z that you're going after and then geographies? Because when I look at it, I just don't -- I can't come up with a really good competitor on any of those fronts. So can you talk about how you think? Who do you look over your shoulder and you're worried about, just to talk about that? And then also, for Scott, what's the implied advertising as a percent of sales for the FY '27 because that's kind of also helping the flywheel. And then also on the guidance, is Coach North America for mid-single digit, is that for Q1? Or is that for the year? Or for both Q1 and the year? Joanne Crevoiserat: You've got a lot in there, Adrienne. I'm going to kick it off. I think this will be a 3-part. I'll kick it off, and I'll toss it to Todd for a little bit of color if there's anything left after I talk, and then Scott will clean it up with some of your guidance questions. You're hitting on the kernel that is driving our growth, and that is new customer acquisition. We have become just obsessed with our customer. This customer obsession starts with understanding them and then delivering product and marketing and storytelling and experiences that are relevant to our target customer. And that muscle -- that brand-building muscle that we're building at Tapestry, it's a playbook that is repeatable. We continue to invest in the capabilities to deepen our understanding of the consumer and then move from insight to action. And that's where it matters for our customers, to deliver something that our customers -- that resonates with them, that they fall in love with. And these new customers who we're acquiring, we talked about 11 million new customers in the last fiscal year, are joining at higher-than-average AUR. They're a younger consumer base. This point of market entry strategy that we have not only is an opportunity to retain these customers and drive lifetime value, but what we're finding and what we know, I think we all know that the young consumer, the youngest generation influences all generations, and we're seeing that play out in our business because our existing customer base is also growing. So this flywheel of driving new customer acquisition and then giving them such a terrific experience that they come back. We're seeing those retention rates among the highest retention rates in our customer file. So they're loving our brands. They're staying with our brands, and they're influencing all generations. And we're continuing to invest behind those capabilities so that we can continue to drive that flywheel. It's happening in North America. We spent a lot of time talking about North America growth today, but we also see a tremendous opportunity in international markets to drive new customer acquisition. We're bringing more customers into the market. So we're growing the market, and we're growing our share. And that's a phenomenal place to be. Todd, I don't know if there's anything you want to add from a color perspective. Todd Kahn: You touched on so many good things, but I do want to tackle the one thing you didn't talk about, which is competition. And for me, there are no barriers of entry in our space. That's just the truism that we recognize every day. It almost doesn't matter. What we -- the moats we are building are about that connective tissue to our customer. When we spend 12% on advertising -- and I think my marketing team will be mad at me because I use the word advertising. It's not advertising. It's story building. It's brand driving. It's not just go buy our bag. It's a richness that makes it compelling. When we say we're going to invest in our store fleet and refurbish, we are going to tackle 80% by traffic of our store fleet between now and FY '30. That's an investment into the future that makes us relevant and continues to attract that younger consumer globally. And that's why we're so excited about this rollout of expressive luxury. So couple that with the fact that we are an 85-year-old brand. September, Stuart is going to a fashion show, celebrating our 85th anniversary. Those are things that are hard to replicate. And that's why finally, I go back and talk to a lot about our culture. Our winning culture, a team that understands, a team that's been together. We have stability of leadership. We have stability of design. Those are important drivers of long-term profitability. So I love our setup. We are going to be very focused on that $200 to $500 space. Yes, we have some amazing bags above that, but that clarity of brand positioning is what is driving our customer acquisition and retention. Scott, I don't know if I left you anything. Scott Roe: All right. You left me a little bit. There was a spoiler alert. He threw out the 12% is indeed percent of demand creation that's both in -- we hit that in '26, and we're building upon that. It's the flywheel we talked about, right? We grow gross margins. We have discipline across the rest of the business so we can invest back in things like demand creation, which are the engine that drive our new customer acquisition, doing all of that with 50 basis points of operating margin expansion. So 12%, another data point there. It's about $1 billion in advertising. So you think about where we were 5 years ago versus today in terms of demand creation, that's a big number because, to Todd's point, while there's no barriers to entry, there are barriers to scale, and those barriers are getting higher. And companies who have a business model that can reinvest and create demand in the way that we can, well, this is the moment we prepared for, for a long time, really sets us apart and is a competitive advantage. And I'm glad you asked for clarification on Coach. I want to try to be very clear here. So Coach, we expect in Q1 to grow mid-single digits. We also expect full year Coach to grow at mid-single digits. And the point I made earlier is we're comping the comp or compounding on the growth. So whether we look at North America Q4 last year, Q1 this year or full year this year, that's about a 30% 2-year comp for North America. So not only are we a much bigger business, we're growing significantly on top of that big business. And when you think about, Todd, you got a huge North American business, over $4 billion, we can talk about percentages. This is real growth. And at our margins and at the flow-through that we have based on the efficiency of the model, it's a really important part of our financial story. And one of the reasons we have confidence is our North American Coach business. Todd Kahn: And just to be abundantly clear because I want to make sure we're talking mid-single digits in North America for the Coach brand. We're talking in the first quarter, low teens. And for the full year, for the Coach brand overall, we are talking high single digits. I didn't want any of my BU heads to think they got off the hook on this phone call. So those are the floors that we've set for this year. And I think our track record of beating out the floors are quite substantial. Adrienne Yih-Tennant: Your track record is great indeed. Operator: We'll move on now to Mark Altschwager with Baird. Mark Altschwager: Just first on marketing, it did not delever as much as you had guided in the fourth quarter. Could you just clarify how much of that is a shift in timing versus realizing some greater efficiencies and how that then plays into fiscal '27? And then separately, the CapEx step-up, the reinvestment in the fleet, how should we be modeling or thinking about net door growth for Coach in fiscal '27? And how does that play out by region? Scott Roe: Yes. So I'll take the first part of that, Mark. Yes, listen, with marketing, there's always a little bit of timing. And we've created a model, I'll go back to the flywheel, that allows us the flexibility to be opportunistic and lean in when the data tells us we have opportunities, but we don't just spend to spend. Also timing of things like production and whatnot can be a little bit different on a quarter-by-quarter basis. So you're right, we came in with a little more leverage in marketing. We still spend a lot of money, and I'll remind you, we spent 12% of sales in 2026. I think the much bigger issue as you look going forward is we are and will continue to invest in marketing as a key part of our demand creation, and it's a key part of driving unaided brand awareness, which is a key to new customer acquisition. So the flywheel is intact, and we will continue to invest in marketing. And I think Todd is going to want to say something about the fleet, but just to give you some numbers, between 40 and 50 doors is our expectation on a net basis at Coach. And you're right, we have stepped up a bit our CapEx, but still, as we look at our overall guidance or our overall expectations from Investor Day, still very much in line as we look at our forward CapEx spending. And I'll remind you, we've got a lot more cash, too. So our free cash flow is significantly higher even with these investments. But Todd, to you, maybe a little color on what you're doing. Todd Kahn: Yes. I love that this year, we will go over the 1,000 door count for Coach globally. And 75% of those 50 doors that Scott talked about will be international, 25% will be domestic. But remember what we're doing, we are elevating the fleet with our expressive luxury design. We started a design that we introduced in the first 6 months of last year. We paused, which was really smart. What we did was we listened to the consumer, we evolved our thinking. And now based on that data and that input, we're able to go roll it out, sometimes slow to smooth, smooth to fast. We're going to be able to go much faster now that we have clarity of what the design looks like, how it operates and how the consumer responds. In addition, we're adding one per MSA, no more than one per MSA, what we call our Play concepts. And you'll see the most recent version of that was in Paris. You have a new one that we did in Chicago, one in Atlanta. So again, these beacons of Coach, which allows the consumer to interact, some of those Play ideas then evolve into expressive luxury. So I feel very good about investing in the fleet. One of the things we know, Gen Z love being in the real world. And if our stores -- and I want our stores to be as engaging as the product, and that's what the expressive luxury design is doing for us. So I'm very excited about the future growth of being a direct-to-retailer and seeing our stores, and I hope you get to visit many of them in the upcoming year. Operator: Thank you. That concludes our Q&A. I will now turn it over to Joanne Crevoiserat for some concluding remarks. Joanne Crevoiserat: Thanks, Leo. I want to close by reiterating my confidence in the future. The strength of our results and more importantly, the strength of our organization are driving durable growth and long-term shareholder value. Our advantages continue to compound, and I believe our greatest opportunities are ahead of us. To our global teams, thank you for the creativity, focus and commitment you bring every day. Your work is reflected in everything we've accomplished and in the opportunities we're creating for the future. And to everyone who joined us today, thank you for your interest in Tapestry. Have a great day. Operator: This concludes Tapestry's earnings conference call. We thank you for your participation. Before you buy stock in Tapestry, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Tapestry wasn’t one of them. The 10 stocks that made the cut are built for long-term growth and could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $432,621!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,335,314!* That performance is why people listen. 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Tapestry (TPR) Q4 2026 Earnings Call Transcript was originally published by The Motley Fool

Tapestry, Inc. TPR used its fiscal fourth-quarter call to emphasize that Coach can sustain growth in fiscal 2027 despite a more measured second-half cadence. TPR reported adjusted earnings of $1.32 per share, which beat the Zacks Consensus Estimate of $1.26. Revenues of $1,876.6 million missed the $1,877.4 million consensus mark. Tapestry, Inc. price-consensus-eps-surprise-chart | Tapestry, Inc. Quote CFO and COO Scott Roe said fiscal 2027 guidance reflects confidence while remaining disciplined. Tapestry expects revenues of $8.4-$8.5 billion and about 50 basis points of operating margin expansion. Roe forecast first-quarter revenue growth in the high single digits and EPS of about $1.55. Full-year EPS is expected at $7.80 to $7.90, with revenue growth moderating in the second half. A JPMorgan analyst questioned that moderation. CEO Joanne Crevoiserat said Coach remains strong with customers, while Roe said the full-year outlook does not require first-quarter growth rates to continue. Coach CEO and brand president Todd Kahn said fourth-quarter handbag units were roughly flat by design as promotions declined, while handbag average unit retail (AUR) increased at a mid-teens rate. A Morgan Stanley analyst asked about the growth mix. Kahn said fiscal 2027 guidance assumes both AUR and unit gains without using promotions to force volume. In a Barclays exchange, Kahn clarified that global Coach revenues are expected to rise low teens in the first quarter and high single digits for fiscal 2027. North America Coach is expected to grow in mid-single digits. CEO Crevoiserat said international markets should contribute more to growth. Fiscal fourth-quarter pro forma constant-currency revenue rose 28% in Greater China and 19% in Europe. A BTIG analyst asked about sustaining that growth. Crevoiserat cited younger local customers and further penetration, while Kahn said Europe offers white space and China is receiving more marketing support. Kahn said the brand can follow Gen Z shopping patterns. Management expects mid-teens fiscal 2027 growth in both Greater China and Europe. Crevoiserat said Coach increased quarterly marketing spending about 20%, emphasizing brand building and acquisition. CFO and COO Roe said demand-creation spending reached about 12% of sales in fiscal 2026. A Baird analyst asked about marketing timing. Roe said quarterly timing varies, but Tapestry will keep investing where data supports demand creation. Roe expects 40 to 50 net Coach store additions in fiscal 2027. Kahn said about 75% should be international as the expressive luxury format expands. Crevoiserat said Kate Spade remains in a phased turnaround centered on brand desirability, a tighter assortment and omnichannel execution. She said fiscal 2026 top-line progress was more gradual than planned. Crevoiserat said the Margot, 454 and Duo handbag families supported customer acquisition, while store renovations improved conversion and average transaction value. Broader unaided brand awareness has not yet improved. Roe said fiscal 2027 guidance assumes a high-single-digit Kate Spade revenue decline and a modest operating loss as investment continues. First-quarter revenues are expected to fall at a low-double-digit rate. Roe said Tapestry expects to return about $1.7 billion to shareholders in fiscal 2027, including roughly $1.35 billion of repurchases and a 16% dividend increase. Crevoiserat closed with a confident focus on customer relationships, global expansion and operating discipline. Management's priorities remain sustaining Coach, rebuilding Kate Spade and expanding margins despite uneven tariff and marketing effects. TPR carries a Zacks Rank #3 (Hold), with a Value Score of D, Growth Score of A, Momentum Score of A and VGM Score of A. Under the Zacks framework, Hold-rated stocks can be retained, with A and B Style Scores more favorable than lower grades. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. The Growth, Momentum and VGM Scores of A indicate stronger characteristics in those styles, while a Value Score of D is weaker. The Zacks Rank can change as estimates are revised after the just-reported results, so the current combination is not a fixed signal. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Tapestry, Inc. (TPR) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research