Tapestry Adds $350 Million To Buyback Plan As Coach Growth Drives Higher Earnings Outlook
Coach sales rose 16% while Kate Spade fell 10%, as the company raised its annual adjusted earnings forecast.
Tapestry, which owns the Coach and Kate Spade handbag and accessories brands, raised its planned fiscal 2027 share repurchases by $350 million and increased its annual earnings outlook Thursday after beating its own first-quarter targets. Its earnings release, accompanying an SEC filing, puts adjusted earnings guidance at $8.25–$8.35 per share, compared with $7.80–$7.90 previously.
Coach Carries The Growth
Tapestry's unaudited first-quarter sales totaled $1.894 billion, up 11% year over year both as reported and excluding currency movements. Removing Stuart Weitzman, sold on August 4, 2025, from the comparison lifts growth to 12% on both bases.
Coach generated $1.661 billion in sales, up 16%, while Kate Spade's revenue fell 10% to $233 million; both changes were the same excluding currency effects. The profit divide was sharper: Coach earned $590 million from operations, while Kate Spade posted a $20 million operating loss, or $6 million after adjustments.
Coach accounted for 86.4% of fiscal 2026 net sales. Tapestry's brands sell handbags, small leather goods, footwear and other accessories, with approximately 87% of fiscal 2026 sales coming through company stores and e-commerce sites.
The company added 2.6 million customers during the quarter, approximately 35% of them Gen Z. Coach handbag prices increased a little over 10%, while units sold rose a few percent. Greater China revenue reached $385 million, up 43% as reported and 39% excluding currency movements.
Joanne Crevoiserat, Tapestry's chief executive officer, credited the Amplify strategy: “Our Amplify strategy continues to bring new consumers to our brands through our distinctive combination of creativity, craftsmanship, and value.”
Higher Margins, Bigger Earnings
Unaudited diluted earnings reached $1.76 per share, up 38% from $1.28 a year earlier. Adjusted earnings rose 32% to $1.82 from $1.38.
Operating profit increased to $424 million from $328 million. Distribution-network transition costs took $15 million off operating profit and $0.06 off diluted earnings, primarily from moving fulfillment work from Ohio to a third-party Pennsylvania facility.
Adjusted gross margin reached 78.7%, up 2.2 percentage points. Tapestry attributed the improvement to operations, tariffs and duties, and currency movements; adjusted operating margin increased to 23.2% from 20.9%.
Annual revenue guidance now stands at approximately $8.5 billion–$8.6 billion, versus $8.4 billion–$8.5 billion previously. Management expects operating margin to expand approximately 1 percentage point, compared with its earlier 0.5-percentage-point forecast. The outlook compares equal 52-week periods and excludes fiscal 2027's extra week.
Buybacks Rise, Cash Measures Diverge
Planned shareholder payouts now total approximately $2.0 billion for fiscal 2027, including $1.7 billion in buybacks. Tapestry returned approximately $700 million during the first quarter, spending $600 million on approximately 4.6 million shares at an average $130.00 each.
The larger repurchase plan accompanies a reduction in the forecast diluted share count to approximately 200 million from 203 million. Management continues to anticipate an annual dividend of $1.85 per share.
Quarterly operating cash flow rose to $197 million from $113 million, but adjusted free cash flow fell to $56 million from $103 million. That adjusted measure removes a $109 million change in other assets primarily tied to collection of a tariff refund. Capital spending and cloud-computing implementation costs totaled $55 million, versus $38 million.
Quarter-end cash, cash equivalents and short-term investments totaled $782 million against $2.56 billion in borrowings. The annual adjusted free-cash-flow forecast remains unchanged, approaching $1.7 billion.
Tapestry expects second-quarter revenue growth of approximately 5%–6% excluding currency movements and adjusted earnings of approximately $3.05 per share. The company expects to report those results on February 4, 2027.
Sources
- 8-K Filing — TAPESTRY, INC. (TPR) — SEC EDGAR
- Exhibit ef20084882_ex99-1.htm — TAPESTRY, INC. 8-K exhibit — SEC EDGAR
- Tapestry Shares Rise Over 8% as Fiscal Q1 Earnings Exceed Forecasts and 2027 Outlook Improves — Yahoo Finance
- Tapestry Inc (TPR) Q1 2027 Earnings Call Highlights: Revenue Up 12%, EPS Jumps 32% and ... — Yahoo Finance
- Tapestry CEO Sees Resilient US Shoppers As Coach Heads Into Crucial Holiday Season — benzinga.com
- Tapestry forecasts FY2027 EPS of $8.25-$8.35 while raising revenue outlook to $8.5B-$8.6B (NYSE:TPR) | Seeking Alpha — seekingalpha.com
- Tapestry (TPR) Q1 2027 Earnings Call Transcript - The Globe and Mail — theglobeandmail.com
