Tapestry, Inc.

What they do

The company designs, markets, and sells handbags, leathergoods, and lifestyle products through direct-to-consumer channels (retail stores, outlet stores, e-commerce, concessions), wholesale, and licensing. In fiscal 2026, DTC represented approximately 87% of total net sales. Coach accounts for 86.4% of net sales and Kate Spade 13.4%. The company completed the sale of Stuart Weitzman on August 4, 2025.

Revenue drivers

• Coach — Largest segment (86.4% of fiscal 2026 net sales); drove 24% revenue growth in fiscal 2026. Products sold via DTC, wholesale, and licensing globally.
• Kate Spade — Second segment (13.4% of fiscal 2026 net sales); sells handbags, ready-to-wear, jewelry, footwear, gifts, and home décor via DTC, wholesale, and licensing.
• Direct-to-consumer channels — Approximately 87% of fiscal 2026 net sales come from stores (retail, outlet, concessions) and e-commerce, providing controlled consumer access.

Recent performance

Fiscal 2026 revenue rose 14% to $8.0 billion, with net income of $1.53 billion and diluted EPS of $7.27, up from $0.82 in fiscal 2025 (which included Capri-related charges). Q4 revenue increased 9% to $1.88 billion, with Coach growing 15%. Gross margin expanded 240 bps to 77.8% for the year; operating cash flow was $1.98 billion. The company returned $1.7 billion to shareholders via dividends and buybacks.

Strategy

In fiscal Q1 2026, the company introduced Amplify, a 2028 growth strategy with four pillars: build emotional connections (targeting Gen Z), fuel fashion innovation and product excellence (leading with handbags, expanding footwear), deliver compelling experiences for global growth (prioritizing Greater China and Europe), and ignite people power. Management says it achieved Investor Day revenue, operating margin, and EPS targets two years ahead of plan.

Risks

• Macroeconomic downturn — Consumer purchases of discretionary items like Tapestry's products tend to decline during recessions or high unemployment, impacting demand.
• Trade disputes and tariffs — New or increased tariffs on imports could raise costs or reduce demand, particularly given sourcing and sales in international markets.
• Brand relevance — Failure to anticipate consumer preferences or respond to fashion trends could reduce brand value and sales.
• International operations — Currency fluctuations and political or economic instability in markets where Tapestry sells or sources could adversely affect results.

Outlook

Management's fiscal 2027 outlook calls for mid-single-digit revenue growth, continued operating margin expansion, and low-double-digit EPS growth. The board approved a 16% dividend increase. The outlook is consistent with long-term commitments under the Amplify strategy.