TAPESTRY, INC. (TPR): Results of Operations and Financial Condition
TAPESTRY, INC. (TPR) filed an SEC Form 8-K — Results of Operations and Financial Condition. Exhibit 99.1 CONTACTS: Tapestry, Inc. Analysts and Investors: Christina Colone Global Head of Investor Relations 212/946-7252 ccolone@tapestry.com Media: Jennifer Leemann Global Head of Communications 212/631-2797 jleemann@tapestry.com TAPESTRY, INC. REPORTS FISCAL 2026 FOURTH QU
How this was made
The 30-second read
Why it matters
The filing provides fresh, decision-relevant inputs: quantified Q4 and FY beats, margin expansion, a 16% dividend increase, $1.7B returned via buybacks, and explicit FY27 targets (mid-single-digit revenue growth, continued operating margin expansion, low-double-digit EPS growth).
Market read
Traders can update positions based on the combination of earnings beats, margin improvement, capital return actions, and first-pass FY27 guidance.
What to watch
The release excludes Stuart Weitzman net sales in pro forma figures; investors may scrutinize underlying comparability and the sustainability of margin expansion versus promotional intensity.
TAPESTRY, INC. REPORTS FISCAL 2026 FOURTH QUARTER AND FULL YEAR RESULTS
Fiscal 2026 fourth-quarter pro forma net sales grew 12% and non-GAAP diluted EPS grew 28%, while gross margin and operating margin expanded. Full-year pro forma sales increased 18%, non-GAAP operating income increased 33%, and the company initiated Fiscal 2027 outlook for mid-single digit revenue growth, operating margin expansion, and low-double-digit EPS growth.
Key metrics
as reported| Metric | Value | q/q | y/y |
|---|---|---|---|
| Fourth quarter net salesGAAP | $1,876.6 million | – | 9% |
| Fourth quarter net sales constant currency changeother | 8% | – | 8% |
| Fourth quarter pro forma net salesother | $1,876.6 million | – | 12% |
| Fourth quarter pro forma net sales constant currency changeother | 11% | – | 11% |
| Fourth quarter gross profitGAAP | $1,563.6 million | – | 19% |
| Fourth quarter gross marginGAAP | 83.3% | – | 700 bps |
| Fourth quarter gross profitnon-GAAP | $1,465.4 million | – | 11% |
| Fourth quarter gross marginnon-GAAP | 78.1% | – | 180 bps |
| Fourth quarter SG&A expensesGAAP | $1,121.3 million | – | – |
| Fourth quarter SG&A expensesnon-GAAP | $1,103.4 million | – | – |
| Fourth quarter non-GAAP SG&A expense rationon-GAAP | 58.8% of sales | – | leverage of 80 basis points versus the prior year |
| Fourth quarter operating income (loss)GAAP | $442.3 million | – | NM |
| Fourth quarter operating marginGAAP | 23.6% | – | NM |
| Fourth quarter operating incomenon-GAAP | $362.0 million | – | 25% |
| Fourth quarter operating marginnon-GAAP | 19.3% | – | 250 bps |
| Fourth quarter net income (loss)GAAP | $347.8 million | – | – |
| Fourth quarter diluted earnings (loss) per shareGAAP | $1.68 | – | NM |
| Fourth quarter diluted earnings per sharenon-GAAP | $1.32 | – | 28% |
| Fiscal 2026 net salesGAAP | $8,004.2 million | – | 14% |
| Fiscal 2026 net sales constant currency changeother | 13% | – | 13% |
| Fiscal 2026 pro forma net salesother | $7,989.6 million | – | 18% |
| Fiscal 2026 pro forma net sales constant currency changeother | 17% | – | 17% |
| Fiscal 2026 gross profitGAAP | $6,229.0 million | – | 18% |
| Fiscal 2026 gross marginGAAP | 77.8% | – | 240 bps |
| Fiscal 2026 gross profitnon-GAAP | $6,123.1 million | – | 16% |
| Fiscal 2026 gross marginnon-GAAP | 76.6% | – | 120 bps |
| Fiscal 2026 SG&A expensesGAAP | $4,314.6 million | – | – |
| Fiscal 2026 SG&A expensesnon-GAAP | $4,257.3 million | – | – |
| Fiscal 2026 non-GAAP SG&A expense rationon-GAAP | 53.3% of sales | – | leverage of approximately 210 basis points versus the prior year |
| Fiscal 2026 operating incomeGAAP | $1,914.4 million | – | NM |
| Fiscal 2026 operating marginGAAP | 23.9% | – | NM |
| Fiscal 2026 operating incomenon-GAAP | $1,865.8 million | – | 33% |
| Fiscal 2026 operating marginnon-GAAP | 23.4% | – | 340 bps |
| Fiscal 2026 net incomeGAAP | $1,527.7 million | – | – |
| Fiscal 2026 diluted earnings per shareGAAP | $7.27 | – | NM |
| Fiscal 2026 diluted earnings per sharenon-GAAP | $7.05 | – | 38% |
| Fiscal 2026 cash flow from operating activitiesGAAP | $1,978.5 million | – | – |
| Fiscal 2026 adjusted free cash flownon-GAAP | $1,863.7 million | – | – |
| Fourth quarter adjusted free cash flownon-GAAP | $492.6 million | – | – |
| Fiscal 2026 CapEx and implementation costs related to Cloud Computingother | $217 million | – | – |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| Coach, fourth quarterHandbag revenue gains and a mid-teens percentage rate increase in handbag AUR. | $1,641.5 million | – | 15% |
| Kate Spade, fourth quarterNo specific brand-level driver was provided. | $235.1 million | – | (7)% |
| Stuart Weitzman, fourth quarterThe company sold the Stuart Weitzman business on August 4, 2025. | — | – | NM |
| Coach, Fiscal 2026Leathergoods outperformance was driven by a combination of AUR and unit growth. | $6,914.7 million | – | 24% |
| Kate Spade, Fiscal 2026No specific brand-level driver was provided. | $1,074.9 million | – | (10)% |
| Stuart Weitzman, Fiscal 2026The company sold the Stuart Weitzman business on August 4, 2025. | $14.6 million | – | (93)% |
| North America, fourth quarter pro formaPro forma constant currency revenue grew 7%. | $1,148.2 million | – | 7% |
| Greater China, fourth quarter pro formaPro forma constant currency revenue grew 28%. | $352.2 million | – | 33% |
| Japan, fourth quarter pro formaPro forma constant currency revenue declined (4)%. | $105.0 million | – | (11)% |
| Other Asia, fourth quarter pro formaPro forma constant currency revenue grew 22%. | $109.0 million | – | 26% |
| Europe, fourth quarter pro formaPro forma constant currency revenue grew 19%. | $122.6 million | – | 22% |
| North America, Fiscal 2026 pro formaPro forma constant currency revenue grew 15%. | $5,034.1 million | – | 15% |
| Greater China, Fiscal 2026 pro formaPro forma constant currency revenue grew 35%. | $1,396.6 million | – | 38% |
| Japan, Fiscal 2026 pro formaPro forma constant currency revenue declined (7)%. | $465.7 million | – | (10)% |
| Other Asia, Fiscal 2026 pro formaPro forma constant currency revenue grew 13%. | $441.6 million | – | 16% |
| Europe, Fiscal 2026 pro formaPro forma constant currency revenue grew 23%. | $525.4 million | – | 29% |
Fiscal 2027 and first fiscal quarter of 2027 outlook
- RevenueFiscal 2027 revenue of $8.4 billion to $8.5 billion; first fiscal quarter revenue growth of high-single-digits on a nominal and constant currency basis versus prior year pro forma revenue.
- Tax rateapproximately 18.5%
- NoteFiscal 2027 operating margin expansion of approximately 50 basis points versus prior year.
- NoteFiscal 2027 net interest expense of approximately $55 million.
- NoteFiscal 2027 weighted average diluted share count of approximately 203 million.
- NoteFiscal 2027 earnings per diluted share of $7.80 to $7.90.
- NoteFiscal 2027 adjusted free cash flow approaching $1.7 billion.
- NoteFiscal 2027 CapEx and Cloud Computing costs of $300 million or approximately 3% to 4% of revenue.
- NoteFirst fiscal quarter earnings per diluted share of approximately $1.55.
- NoteForeign currency is expected to be a 40 basis point benefit to Fiscal 2027 revenue growth and a 30 basis point benefit to first fiscal quarter revenue growth.
- NoteThe 53rd week in Fiscal 2027 is expected to contribute an additional percentage point to annual revenue growth and have a neutral impact on operating margin for the full fiscal year.
- NoteThe outlook embeds a mid-20% tariff rate on U.S. inventory receipts in Fiscal 2027, resulting in a neutral net impact from tariffs year-over-year.
Capital returns
- Returned $1.7 billion to shareholders through its dividend and share repurchase programs in Fiscal 2026.
- Returned $326 million to shareholders at an annual dividend of $1.60 per share in Fiscal 2026.
- Bought back $1.35 billion in common stock in Fiscal 2026, repurchasing approximately 11.5 million shares at an average share price of approximately $118.
- Approved a 16% increase to the dividend, with a quarterly cash dividend of $0.4625 per common share payable on September 21, 2026 to shareholders of record as of close of business on September 4, 2026.
- Anticipated annual dividend rate of $1.85 per share.
- Expects to return approximately $1.7 billion to shareholders in Fiscal 2027.
- Expects to buy back $1.35 billion in common stock in Fiscal 2027 under its existing share repurchase authorization.
What drove it
- Coach fourth-quarter revenue increased 15%, or 14% on a constant currency basis, and Fiscal 2026 revenue increased 24%, or 23% on a constant currency basis.
- The company welcomed over 2.5 million new consumers in Q4 and approximately 11.0 million in FY26, with approximately 35% of new customers Gen Z.
- Coach handbag AUR increased at a mid-teens percentage rate in both Q4 and FY26.
- Pro forma constant currency Direct-to-Consumer revenue increased 11% in the fourth quarter and 16% for the full year.
- Digital revenue grew at a mid-single-digit rate in the fourth quarter and at a high-teens rate for the full year, while store revenue increased at a mid-teens rate in both periods.
- Fourth-quarter non-GAAP gross-margin expansion reflected operational improvements of approximately 170 basis points and a favorable impact from the Stuart Weitzman divestiture of 60 basis points, partially offset by a negative tariff and duty impact of 60 basis points.
Concerns
- Kate Spade revenue declined (7)% in the fourth quarter and (10)% in Fiscal 2026.
- Japan revenue declined (11)% in the fourth quarter and (10)% in Fiscal 2026 on a pro forma reported basis.
- The Fiscal 2027 outlook embeds a mid-20% tariff rate on U.S. inventory receipts.
- The outlook assumes no material worsening of inflationary pressures or consumer confidence.
- Fourth-quarter GAAP results included items that increased operating income by $80 million, net income by $74 million, and diluted earnings per share by $0.36.
What to watch
- Execution against Fiscal 2027 revenue outlook of $8.4 billion to $8.5 billion and operating-margin expansion of approximately 50 basis points.
- First fiscal quarter revenue growth of high-single-digits and earnings per diluted share of approximately $1.55.
- Whether Coach growth continues to offset declines at Kate Spade and in Japan.
- The planned Fiscal 2027 return of approximately $1.7 billion to shareholders, including expected share repurchases of $1.35 billion.
- Tariff effects, including the outlook assumption of a neutral net impact from tariffs year-over-year.
Balance sheet and cash flow
- Cash, cash equivalents and short-term investments totaled $1.15 billion.
- Total borrowings outstanding were $2.38 billion.
- Leverage ratio, based on gross debt to adjusted EBITDA, was 1.1x as of the end of the fiscal year.
- Inventory was $826 million versus prior year ending inventory of $861 million.
- Cash flow from operating activities for the fiscal year was an inflow of $1.98 billion compared to an inflow of $1.22 billion in the prior year.
- Adjusted free cash flow for the fiscal year was an inflow of $1.86 billion compared to an inflow of $1.35 billion in the prior year.
- Cash and cash equivalents at end of period were $974.7 million versus $1,100.0 million.
- Long-term debt was $2,379.0 million versus $2,377.9 million.
Analysis
Tapestry closed Fiscal 2026 with fourth-quarter net sales of $1,876.6 million, up 9%, while pro forma net sales excluding Stuart Weitzman increased 12%. The distinction is important because the company sold the Stuart Weitzman business on August 4, 2025. Coach was the principal growth engine, with revenue up 15% in the quarter and 24% in Fiscal 2026, while Kate Spade revenue declined 7% in the quarter and 10% for the full year.
Demand indicators were strongest in Coach, Direct-to-Consumer, Greater China, Other Asia, and Europe. The company said it welcomed over 2.5 million new consumers in Q4 and approximately 11.0 million in FY26, with approximately 35% of new customers Gen Z. Coach handbag AUR increased at a mid-teens percentage rate in both Q4 and FY26, and the company described full-year leathergoods performance as a combination of AUR and unit growth. Pro forma constant currency revenue grew 28% in Greater China and 19% in Europe during the fourth quarter, while Japan declined 4% on that basis.
Profitability expanded substantially. Fourth-quarter GAAP gross margin was 83.3%, up 700 bps, and non-GAAP gross margin was 78.1%, up 180 bps. Fourth-quarter non-GAAP operating margin expanded 250 bps to 19.3%, despite a 130-basis point increase in marketing investment within SG&A. Full-year non-GAAP operating margin reached 23.4%, up 340 bps. The fourth-quarter non-GAAP gross-margin bridge included approximately 170 basis points of operational improvements and a 60-basis point favorable impact from the Stuart Weitzman divestiture, partly offset by a 60-basis point negative tariff and duty impact.
Cash generation and shareholder distributions were sizable. Fiscal 2026 operating cash flow was $1,978.5 million and adjusted free cash flow was $1,863.7 million. The company returned $1.7 billion to shareholders, including $326 million of dividends and $1.35 billion of common-stock repurchases, and raised the anticipated annual dividend rate to $1.85 per share. Cash, cash equivalents and short-term investments totaled $1.15 billion, total borrowings were $2.38 billion, and the stated leverage ratio was 1.1x.
Fiscal 2027 guidance calls for revenue of $8.4 billion to $8.5 billion, operating-margin expansion of approximately 50 basis points, and EPS of $7.80 to $7.90, all on a non-GAAP and comparable 52-week versus 52-week basis. The outlook includes a mid-20% tariff rate on U.S. inventory receipts with a neutral net impact from tariffs year-over-year, and excludes the impact of the 53rd week, which is expected to contribute an additional percentage point to annual revenue growth. Investors should focus on whether Coach momentum and margin discipline persist while the company addresses the declines at Kate Spade and in Japan.
Management, verbatim
Our fourth quarter outperformance capped a year of strong growth, as we meaningfully exceeded expectations and achieved key financial commitments we established at our Investor Day two years ahead of plan. Our success is by design, demonstrating the power of our Amplify strategy. Through intentional choices, disciplined execution, and an unwavering focus on the consumer, we have built a stronger, more focused organization. These strengths enable us to deliver creativity, value, and relevance at scale, deepening our connections with consumers globally. We are confident our advantages will continue to compound, driving durable growth and long-term shareholder value.
Joanne Crevoiserat, Chief Executive Officer of Tapestry, Inc.
Not in the filing
stated, not guessed- Previous-quarter comparisons and sequential changes for reported financial metrics were not provided.
- Prior-quarter revenue, gross margin, operating income, net income, EPS, cash flow, and segment revenue were not provided.
- A previous-quarter outlook was not provided, so no comparison of actual results with prior guidance is available.
- Fiscal 2027 gross-margin guidance and operating-expense guidance were not provided.
- A named CFO commentary section was not provided.
- Percentage changes for GAAP and non-GAAP net income were not provided.
AlphAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.
Background
This is Tapestry’s SEC 8-K filing for fiscal 2026 fourth quarter and full-year results, including brand and regional performance, shareholder returns, and initial fiscal 2027 outlook.
Ticker impact
Tapestry reported fiscal Q4 and full-year results with GAAP EPS $1.68 (Q4) and $7.27 (FY), plus a 16% dividend increase and FY27 outlook.
Moderately positive bias for the next few sessions, with follow-through dependent on how investors react to the FY27 mid-single-digit revenue and low-double-digit EPS growth guidance.
The filing is a primary earnings release with multiple quantified beats (revenue, gross/operating margin, GAAP and non-GAAP EPS) and explicit capital return and forward guidance.
Market effects
Signals improving profitability and demand resilience in branded apparel/accessories, potentially supporting sentiment for discretionary retail peers.
Greater China and APAC growth acceleration (pro forma constant currency) highlights regional demand strength that can influence regional discretionary positioning.
As a large US accessories brand, results can modestly affect broader consumer discretionary read-through, especially for luxury-adjacent categories.
Counterpoint
Coach-led growth is strong, but Kate Spade pro forma revenue declined, which could limit durability if Coach momentum fades.
Key entities
- companyTapestry, Inc.
US-listed accessories company (Coach and Kate Spade) reporting fiscal 2026 results and initiating fiscal 2027 outlook.
- brandCoach
Tapestry’s primary brand, cited for double-digit revenue growth across FY26 and Q4.
- brandKate Spade New York
Brand with pro forma revenue decline cited in the release.
