Tapestry, Inc.

(New York Stock Exchange)
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Somewhat Bullish +45

Tapestry stock slide despite record results and upgraded outlook

Dividend Earnings report Guidance raised AI-generated analysis

πŸ“ˆ Tapestry reported record Q1 revenue of $1.7 billion and adjusted earnings of $1.38 per share, beating analyst estimates.

πŸ‘œ Coach brand sales surged 22% year-over-year to $1.43 billion, driving the majority of the company's growth.

πŸ“‰ Kate Spade revenue declined 8% amid ongoing turnaround efforts and expected modest profit losses this year.

πŸ’° Tapestry declared a quarterly dividend of 40 cents per share and increased its buyback target to $1 billion for fiscal 2026.

πŸ“ˆ Company raised full-year guidance to approximately $7.3 billion in revenue, slightly above the consensus estimate.

πŸ“‰ Shares fell more than 10% as investors were disappointed by the slower-than-expected H2 growth outlook despite record profits.

⚠️ Tariff-related pressures are expected to reduce operating margins by 230 basis points in fiscal 2026.

πŸ‘₯ Tapestry added 2.2 million new global customers in Q1, with 35% belonging to the Gen Z demographic.

πŸ“ˆ CEO Joanne Crevoiserat highlighted the central role of Gen Z in Coach's ongoing success and cultural relevance.

🏒 Analysts maintain Tapestry is in a position of strength despite mixed market reaction to the earnings report.

Bullish Signals
  • Tapestry reported record Q1 revenue of $1.7 billion and adjusted earnings of $1.38 per share, significantly beating Wall Street estimates.
  • The flagship Coach brand delivered exceptional growth with sales jumping 22% year-over-year to $1.43 billion.
  • Tapestry raised its full-year revenue guidance to approximately $7.3 billion and EPS guidance to between $5.45 and $5.60.
  • The company declared a quarterly dividend of 40 cents per share and increased its share repurchase authorization to $1 billion for fiscal 2026.
  • Tapestry added 2.2 million new global customers in the first quarter, with 35% being Gen Z consumers.
Risk Factors
  • Shares tumbled more than 10% as investors expressed disappointment over the company's slower growth outlook for the second half of fiscal 2026.
  • Tariff-related pressures are expected to reduce operating margins by 230 basis points in fiscal 2026, impacting profitability.
  • Investors were disappointed that the raised guidance implied a slower growth pace compared to the aggressive momentum priced into the stock earlier this year.
Full Analysis
Tapestry Inc., the parent company of Coach and Kate Spade, reported record quarterly revenue of $1.7 billion and adjusted earnings of $1.38 per share for its fiscal first quarter ended in September, surpassing Wall Street estimates. The strong performance was driven primarily by a 22% year-over-year sales jump at the flagship Coach brand, which reached $1.43 billion. These gains more than offset an 8% revenue decline at the Kate Spade brand, which continues to face headwinds during its turnaround efforts. Despite the upbeat financial results and a raised full-year guidance forecasting revenue of approximately $7.3 billion, Tapestry shares tumbled over 10%. Investors expressed disappointment regarding the company's slower growth outlook for the second half of fiscal 2026 and ongoing challenges at Kate Spade. The company declared a quarterly dividend of 40 cents per share and announced plans to repurchase $1 billion in shares in fiscal 2026. Management noted that tariff-related pressures are expected to reduce operating margins by 230 basis points, though the core business remains resilient.