TPR · Q1 2026 Earnings

Bullish

Tapestry, Inc.

Reported November 6, 2025

30-second summary

Coach grew 22% to $1.43B (Coach NA +26%, China +21%, Europe +39%) and dragged Tapestry's Q1 FY2026 revenue up 13% to $1.70B — the one-brand story from Q4 became a one-brand acceleration. Management raised the FY26 revenue guide to $7.3B (from "approaching $7.2B") and EPS to $5.45–$5.60 (from $5.30–$5.45), and provided a Q2 frame of ~7% pro forma sales growth with EPS ~$2.15. The operating margin walk reframed as ~280bps underlying expansion (raised from >250bps) less ~230bps tariff = ~50bps net — a quiet positive on the underlying component that gets less airtime than the headline raise.

Headline numbers

EPS

Q1 FY2026

$1.38

Revenue

Q1 FY2026

$1.70B

+13.0% YoY

Gross margin

Q1 FY2026

76.3%

Free cash flow

Q1 FY2026

$0.08B

Operating margin

Q1 FY2026

19.3%

Key financials

Q1 FY2026

Metric	Q1 FY2026	YoY	Q4 FY2025	QoQ
Revenue	$1.70B	+13.0%	$1.72B	-1.1%
EPS	$1.38	—	$1.04	+32.7%
Gross margin	76.3%	—	76.3%	+0bps
Operating margin	19.3%	—	16.8%	+250bps
Free cash flow	$0.08B	—	—	—

Guidance

Company raised FY2026 revenue guidance to $7.3B (from ~$7.2B) and EPS guidance to $5.45–$5.60 (from $5.30–$5.45), citing structural advantages and strong Q1 momentum, though net operating margin expansion guidance remains modest at ~50 bp despite 250+ bp of underlying operational gains offset by persistent tariff headwinds.

Guidance is issued for both next quarter and the full year. Both may appear below.

Changes to prior guidance

Metric	Period	Prior guide	New guide	Δ	Result
Revenue	FY2026	Approaching $7.2 billion	$7.3 billion	+$0.1 billion	Raised
EPS (non-GAAP)	FY2026	$5.30–$5.45 (midpoint $5.375)	$5.45–$5.60 (midpoint $5.525)	+$0.15 (midpoint +$0.15)	Raised
Pro forma revenue growth (nominal basis)	FY2026	Mid-single-digit growth	7% to 8%	Upgraded from qualitative 'mid-single-digit' to explicit 7–8%	Raised
Operating margin expansion	FY2026	More than 250 basis points underlying expansion (offset by ~230 bp tariff/duty headwind)	~50 basis points versus prior year	–200+ basis points (net expansion guidance cut from 'above prior year' to ~50 bp)	Lowered
FX impact	FY2026	80 basis points tailwind	70 basis points tailwind	–10 basis points	Lowered
Weighted average diluted share count	FY2026	~213 million shares	~212 million shares	–1 million shares	Lowered

Reaffirmed unchanged this quarter: Net interest expense (~$65 million), Tax rate (~18%), Adjusted free cash flow ($1.3 billion), Tariff and duty impact (~230 basis points headwind)

Segment performance

Q1 FY2026

Segment	Q1 FY2026	YoY
Coach	$1.43B	+22.0%
Kate Spade	$0.26B	-8.0%
Coach Brand Growth	22% (21% constant currency)	—
Direct-to-Consumer Growth (Pro Forma CC)	16%	—

Platform metrics

Q1 FY2026

Segment	Q1 FY2026
Pro Forma Revenue Growth	16%
New Customers Acquired	2.2 million
Gen Z Customer Percentage	35% of new customers

Profitability

Q1 FY2026

Segment	Q1 FY2026
Operating Margin Expansion (Non-GAAP)	200 basis points
Adjusted Free Cash Flow	$103 million

Other KPIs

Q1 FY2026

Segment	Q1 FY2026	YoY
North America	$1.069B	+18.0%
Greater China	$0.269B	+20.0%
Japan	$0.109B	-7.0%
Europe	$0.125B	+39.0%
Leverage Ratio	1.5x	—

Management tone

Q4 FY2025 hangover → Q1 FY2026 conviction reset. Three quarters ago management's framing was AUR-led, promotional discipline, Coach as flagship; last quarter it was "we still expand margins despite the $160M tariff"; this quarter it is "the path to $10 billion is well within our sights" and "we are just hitting our stride." The vocabulary moved from defense to capacity.

The unit/AUR composition shifted, and management said so explicitly. Q4 telegraphed FY26 growth would be AUR-driven with "units also growing." Q1 delivered what Scott Roe called a "significant inflection in units" and "meaningful acceleration in units" alongside mid-teens AUR. Todd Kahn's framing — "far less promotional than ever before" with "massive AUR growth" potential ahead — signals confidence that the value-perception ceiling is well above current pricing, a meaningful departure from the more measured tone a quarter ago.

The Kate Spade narrative got a real answer for the first time. Q4 offered no recovery plan; Q1 framed the -8% as a deliberate trade — reducing discounting compresses near-term top line in exchange for sustainable margin. Scott Roe was explicit that "it's early days." This is not yet a turnaround thesis, but it is a coherent thesis where last quarter there was none.

Europe entered the narrative as a real pillar. Q4 disclosed +13%; Q1 delivered +39% and management treated it as evidence the global playbook (value, purpose-driven marketing, Gen Z, expanded store footprint beyond high streets) ports. Greater China's +20% extends Q4's +18%, confirming international growth is not a China-only story.

The tariff posture stayed defensive. The 230bps headwind reaffirmed unchanged — no upward revision this time — but management did not claim victory on mitigation either. The credibility test from Q4 (does the tariff number hold?) passed for one quarter.

Q&A highlights

Matthew Boss · J.P. Morgan

Coach delivered 21% revenue growth with 800 basis points of acceleration on the two-year stack, with acceleration across all geographies. Asked to break down drivers of material two-year inflection and what's embedded in back half guide that shows moderation on that two-year stack.

Scott and Todd attributed growth to: significant unit inflection (new pattern after prior AUR-driven growth), 2+ million new customers acquired at higher AURs driving more transactions, and geographic expansion especially in Europe (nearly 40%). Acknowledged they are one quarter in (25% through year) with largest quarter (holiday) ahead; maintaining guidance conservatively with two-year stack consistency approach; Todd reinforced conviction on brand strength and forward positioning despite tough comps.

21% Coach revenue growth in Q126% North America growth39% Europe growthMid-teens AUR growth

Ike Borachow · Wells Fargo

Asked Joanne to elaborate on drivers of accelerated growth and durability of momentum, noting that comparisons will get more difficult in holiday. Specifically asked Coach about confidence in sustaining double-digit revenue growth while cycling tough comps.

Joanne emphasized structural advantages (new customer acquisition at point of market entry, Gen Z winning, expansion of addressable market, compounding retention improvements) and managing for long-term value. Todd provided five proof points: (1) product innovation pipeline, (2) 90% DTC people and engagement capability, (3) 1,000+ stores in Gen Z-preferred real-world locations, (4) 11% marketing spend (43% dollar increase YoY) for customer acquisition, (5) pricing power in $200-500 range. Todd stated 'path to $10 billion is well within our sights' and emphasized they're 'just hitting our stride.'

11% of sales spent on marketing in Q1 (43% dollar increase YoY)Almost 1,000 directly operated stores90% direct-to-consumer modelExpressive luxury positioning in $200-500 price range

Alex Drayton · Morgan Stanley

Asked to explain gross margin decline assumption in back half despite Q1 expansion; requested breakdown of puts and takes and shape across 2Q-4Q. Also asked Joanne about industry trends and implications of potential luxury resurgence for business.

Scott explained gross margin guidance is unchanged from prior communication; took guidance up 20 bps for year; tariff pressure (two-thirds of margin pressure in back half) is known and unchanged; confident in ability to grow gross margins in FY27. On market trends, Joanne noted handbag category inflected to growth last quarter, China market grew 1%, but Coach outperforming by playing their own game and building emotional connections. Todd reiterated Coach grew 21% when category grew 1%, and they're doing this at 'some of our best margins in history.' Emphasized continued outperformance driven by brand positioning and new customer acquisition, not just market tailwinds.

Gross margin guidance raised 20 bps for yearTwo-thirds of back-half margin pressure is tariff-relatedChina handbag market grew 1% globally; Coach grew 21%Category inflected to growth in last quarter

Adrian Yee · Barclays

Asked Todd about Europe's inflection to positive territory after historically being difficult to penetrate; requested color on brand positioning, younger audience focus, and marketing spend in Europe. Asked Scott about Kate Spade merchandise margin progress excluding tariffs and whether there's stabilization in promotional activity.

Todd attributed Europe momentum to same global drivers: value proposition, purpose-driven campaigns, customer acquisition, youth focus, digital building, and new store locations beyond traditional high streets. Scott confirmed Kate Spade is making progress on reducing discounting and full-price sell-through, acknowledging that reduced promotional activity impacts near-term top line but is formula for long-term sustainable growth; emphasized it's early days in turnaround.

Coach Europe grew 39% in Q1Kate Spade reducing discounting despite short-term top-line impactKate Spade improving full-price sell-throughMerchandise margin gains offset by tariff impacts and brand investments at Kate

Anisha Sherman · Bernstein

Asked Todd how Coach is thinking about risk of AUR growth moderating in North America given tough comparisons ahead and more difficult consumer sentiment. Asked Scott about AUR as biggest driver of gross margin guidance and what other levers exist if AUR comes in lower than expected; whether this could be a margin risk.

Todd and Joanne emphasized AUR growth drivers: (1) consumer understanding combined with creativity in product innovation, (2) reduction in discounting and better inventory management, (3) OneCoach strategy lifting AUR by getting consumers to trade up in outlet settings. Todd noted they're 'far less promotional than ever before' and have 'massive AUR growth' potential ahead. Scott stated they're getting AUR pricing 'pretty right' based on unit inflection, have other levers (AUC/supply chain efficiency), and are 'maniacally focused' on maintaining value equation. Acknowledged other margin levers exist beyond AUR but confirmed AUR is critical to gross margin guidance.

Mid-teens AUR growth driving margin confidenceOneCoach strategy lifting AUR through collection in outletsLess promotional than ever beforeUnit inflection validates AUR pricing is appropriate

Answers to last quarter's watch list

Whether Coach AUR growth holds in the double-digits in Q1. Mid-teens AUR growth, paired with a significant unit inflection — better than the bar set by the prior brief. The two together are the bull case.

Resolved positively

Kate Spade revenue trajectory. Improved from -13% to -8%. Scott Roe framed the deceleration in decline as deliberate (discount reduction trading near-term revenue for full-price sell-through). Not yet stabilized to flat, but the trajectory bent and management now has a stated thesis where Q4 had none.

Continue monitoring

Q1 gross margin print. Non-GAAP gross margin came in at 76.5%, +120bps YoY (GAAP +100bps). Operating margin expanded 200bps on non-GAAP basis. Full-year gross margin guidance was raised 20bps.

Resolved positively

Whether the $160M tariff assumption holds or grows again. The 230bps tariff/duty headwind was reaffirmed unchanged. No upward revision this quarter — a credibility win after Q4's surprise.

Resolved positively

Greater China sustainability after +18% Q4. China delivered +20% in Q1, accelerating sequentially. International growth is no longer China-dependent given Europe at +39%.

Resolved positively

What to watch into next quarter

Q2 (holiday) Coach growth against the two-year stack. Management guided to low-double-digit Coach growth in Q2 (mid-20s on a two-year stack, consistent with Q1) embedded in the ~7% total pro forma sales frame. A holiday Coach print holding above +12% would force a second consecutive FY raise; a decel below high-single-digit would validate the conservative guide and pressure the $10B target's credibility.

Whether the operating margin walk firms up beyond ~50bps net. The Q4-to-Q1 reframe from ">250bps underlying" to "~280bps underlying" is a positive signal worth tracking. Watch for any further re-disclosure of the underlying-vs-tariff split on the Q2 call.

Kate Spade revenue moving toward flat. -13% → -8% is progress but not a turnaround. The FY guide still embeds a high-single-digit decline and Q2 mid-teens decline at Kate Spade. A Q2 print better than mid-teens down validates Roe's "deliberate trade" framing; a return to deeper double-digit declines means the discount reduction is destroying demand, not rebuilding margin.

Europe sustaining above +25%. +39% is partly easy comps and a new-store ramp; the test is whether the second derivative holds. Europe becoming a structural +20% growth contributor is the single biggest upside to the $10B path — and management is now guiding FY Europe growth "in the area of 20%."

Coach AUR growth holding in mid-teens with units still positive. Benetti's Evercore question identified the right risk — if the Q1 unit inflection extends, it's incremental upside not yet baked into the guide; if AUR slips while units stay positive, the gross margin guide is still defensible; if both decelerate, the FY raise is at risk.

Whether Q2 actuals run hot vs. the ~7% sales / ~$2.15 EPS frame. Management chose a conservative Q2 setup despite quarter-to-date momentum; a meaningful beat would tee up a third FY raise on the Q3 call.

Sources

Tapestry, Inc. Q1 FY2026 Press Release (Form 8-K Exhibit 99.1), filed November 6, 2025: https://www.sec.gov/Archives/edgar/data/1116132/000114036125040658/ef20058309_ex99-1.htm
Tapestry, Inc. Q1 FY2026 Earnings Conference Call transcript, November 6, 2025 (prepared remarks by Joanne Crevoiserat and Scott Roe; Q&A with Todd Kahn participating; analyst exchanges with J.P. Morgan, Wells Fargo, Morgan Stanley, Barclays, and Evercore).
Tapebrief Q4 FY2025 coverage of TPR for guidance-change baselines.

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