TPR · Q2 2026 Earnings

Bullish

Tapestry, Inc.

Reported February 5, 2026

30-second summary

Coach grew 25% to $2.14B and drove Tapestry's Q2 FY2026 pro forma revenue up 18% to $2.50B against management's own 7–8% pro forma frame from one quarter ago — roughly a 1,000bps beat that triggered the second consecutive FY26 raise. (Reported revenue grew 14%, but the apples-to-apples comparison vs the prior pro forma guide is +18%.) Revenue guidance moved to "over $7.75B" (+11% reported, ~15% pro forma) from $7.3B, EPS to $6.40–$6.45 (+25%+) from $5.45–$5.60, and operating margin expansion was raised to ~180bps from ~50bps. The tariff drag also came in lighter than the prior frame — Q2 tariff impact on gross margin was 190bps, and the FY26 tariff headwind was lowered to ~200bps from ~230bps. The 22% operating margin target from the investor day was hit two years early; the debate now is whether the new baseline is structural or peak.

Headline numbers

EPS

Q2 FY2026

$2.69

Revenue

Q2 FY2026

$2.50B

+14.0% YoY

Gross margin

Q2 FY2026

75.5%

Free cash flow

Q2 FY2026

$1.04B

Operating margin

Q2 FY2026

28.6%

Key financials

Q2 FY2026

Metric	Q2 FY2026	YoY	Q1 FY2026	QoQ
Revenue	$2.50B	+14.0%	$1.70B	+46.7%
EPS	$2.69	—	$1.38	+94.9%
Gross margin	75.5%	—	76.3%	-80bps
Operating margin	28.6%	—	19.3%	+930bps
Free cash flow	$1.04B	—	$0.08B	+1198.4%

Guidance

Tapestry substantially raised FY2026 revenue, EPS, and operating margin guidance, with pro forma revenue growth now ~15% and operating margin expansion tripling to ~180bps, signaling robust execution across Coach and international markets.

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

New guidance

Metric	Period	Guide	YoY
Revenue growth (pro forma, constant currency)	FY 2026	increase 14%	—

Changes to prior guidance

Metric	Period	Prior guide	New guide	Δ	Result
Revenue	FY 2026	$7.3 billion	over $7.75 billion	+$0.45 billion (~6.2% increase to guidance)	Raised
Revenue growth (pro forma, nominal basis)	FY 2026	7% to 8%	approximately 15%	+7 to 8 percentage points	Raised
EPS (non-GAAP)	FY 2026	$5.45 to $5.60	$6.40 to $6.45	+$0.80 to $0.95 (~15% increase at midpoint)	Raised
Operating margin expansion	FY 2026	~50 basis points versus prior year	approximately 180 basis points versus prior year	+130 basis points	Raised
Adjusted free cash flow	FY 2026	$1.3 billion	in the area of $1.5 billion	+$0.2 billion (~15% increase)	Raised
Tax rate	FY 2026	~18%	approximately 17%	-100 basis points	Lowered
Weighted average diluted share count	FY 2026	~212 million shares	approximately 211 million shares	-1 million shares (~0.5% reduction)	Lowered

Reaffirmed unchanged this quarter: Net interest expense (approximately $65 million)

Segment performance

Q2 FY2026

Segment	Q2 FY2026	YoY
Coach	$2.142B	+25.0%
Kate Spade	$0.36B	-14.0%

Platform metrics

Q2 FY2026

Segment	Q2 FY2026
New Customers Acquired	3.7 million
Digital Growth	~20% growth
Brick and Mortar Growth	mid-teens percentage
Coach Handbag AUR Growth	mid-teens percentage
Coach Handbag Units Growth	mid-teens percentage
DTC Revenue Growth	17% pro forma

Profitability

Q2 FY2026

Segment	Q2 FY2026
Non-GAAP Operating Margin	28.8%

Other KPIs

Q2 FY2026

Segment	Q2 FY2026	YoY
North America	$1.715B	+17.0%
Greater China	$0.343B	+35.0%
Japan	$0.128B	-9.0%
Europe	$0.159B	+27.0%
Other Asia	$0.126B	+11.0%
Share Repurchases	$1.2 billion FY2026 guidance	—

Management tone

Q4 FY25 hangover → Q1 FY26 conviction reset → Q2 FY26 capacity expansion. Three quarters ago the framing was defensive (tariff absorption, brand portfolio admission); two quarters ago it was "the path to $10B is well within our sights"; this quarter Scott Rowe explicitly framed FY26 as "the re-baseline for growth going forward" with "mid-single-digit revenue and double-digit earnings, EPS, as our baseline. That's our floor." The vocabulary has moved from defense to inflection.

Two structural shifts stand out. First, the underlying-vs-tariff margin walk has been simplified rather than abandoned: management now explicitly states gross margin will expand ~20bps in FY26 because operational expansion (~180bps) plus SW benefit (~60bps) "completely mitigating the impact of tariffs" (~200bps + ~20bps FX). The defensive scaffolding from prior quarters is gone because the underlying expansion now fully offsets the headwind — a meaningful narrative shift.

Second, capital return commitment was elevated. Q1 reaffirmed $1.3B FCF and an implicit $1.3B return. Q2 raised both to $1.5B — share repurchases specifically lifted to $1.2B (from $1.0B prior). Raising the FCF guide and the return commitment in the same print, by identical magnitudes, signals capital allocation confidence is moving in lockstep with operational leverage.

Recurring themes management leaned on this quarter:

Forward-looking guidance with explicit caveatsBrand performance across portfolioFinancial results and capital allocationRisk disclosure and regulatory compliance

Risks management surfaced:

Actual results may differ materially from forward-looking statementsRisks documented in Form 10-K filingsPerformance variability across brands

Q&A highlights

Matthew Boss · J.P. Morgan

What gives confidence in delivering 22% operating margins roughly two years ahead of investor day timeline, and what are the paths to continued revenue and margin drivers?

Management attributed outperformance to systemic approach to brand building with strong customer acquisition (driven by Gen Z), expanding marketing investments, and operational discipline. Emphasized massive TAM with low market share (under 1% globally) and positioned current results as rebaseline for future growth with mid-single-digit revenue and double-digit EPS as baseline floor. Highlighted $1.5B free cash flow returning 100% to shareholders.

Operating margin at 22% (two years ahead of timeline)EPS guidance raised 80 cents to $6.40-$6.45 (25%+ growth)Global market share under 1% with large TAM2.9 million new customers in quarter (highest in history)

Brooke Roach · Goldman Sachs

What gives confidence that Coach can sustain strong growth momentum in North America as tough prior-year comparisons are cycled?

Todd Kahn emphasized confidence grounded in facts: comped double-digit growth in critical holiday period with lower promotions, strong margins, and 40% marketing increase. Outlined four confidence performance indicators: massive TAM with single-digit North America share, successful Gen Z acquisition with positive halo effect for all ages, balanced growth across core leather goods (no family >10% of sales), and significant runway on both AUR and units (still 20-25% below pre-pandemic levels globally/North America).

Single-digit market share in North America, below 1% globally2.9 million new customer acquisitions (highest in history)Gen Z acquisition driving positive halo across all age groupsNo single product family >10% of sales

Ike Boracow · Wells Fargo Securities

Can you elaborate on the strength and outperformance in Greater China (accelerated to 25%+ from low double-digit guidance), and what's driving the strong European performance (20% growth) while other brands report weakness there?

Joanne explained global resonance of brand with effective regional execution. China outperformance driven by new customer acquisition led by Gen Z across all channels, with digital leading. Attributed to on-ground capabilities, localized marketing integration, and Klott collaboration bridging heritage and streetwear. Europe opportunity remains underpenetrated with potential to expand in France; growth fueled by young local consumers through wholesale and digital in youthful neighborhoods. Emphasized tactical city approach in China and measurement discipline driving reallocation.

Greater China: 34% growth in Q2, raised to 25%+ for FY26Europe: 22% growth in Q2, 20% expected for FY26China digital performance: Coach ranked top-performing brand over 2011 periodKlott collaboration launched in China bridging streetwear and heritage

Rick Patel · Raymond James

Can you provide detail on AUR drivers and opportunities going forward, including impact of pricing vs. mix, and potential swing factors like bag size or material quality?

Joanne emphasized AUR growth is balanced with value proposition and reflects consumer choice, not just cost-driven pricing. Todd detailed sweet spot of $200-500 price range providing runway, product animation creating consumer-perceived value, and mix benefits from one-code strategy bringing collection product to outlets. Highlighted customer journey where first bag (Terrier) leads to higher AUR aspirational purchases. Stressed commitment to never compromising value and avoiding artificial promotional unit lift.

AUR growth in mid-teens in Q2 (equal contribution with units)$200-500 price point sweet spot for sustained Gen Z attractionAUR 5-10x below traditional European luxuryOne-code strategy (collection to outlet mix) driving AUR lift

Adrienne Yee · Barclays

How is Tapestry harnessing AI across the value chain, what portion of CapEx is AI foundational investment, how quickly can demand-side payback be realized, and how does Todd instill innovation culture without franchises exceeding 10% of sales?

Joanne outlined AI application across product development, inventory, pricing, and marketing with patented data fabric foundation. Emphasized human-in-loop approach with designers sketching and using AI for iteration/color/tweaks, speeding design inception. Noted of $200M CapEx, >50% is stores and remainder is tech (tech debt largely behind them). Todd explained creative approach balances runway shows pushing envelope with commercial execution; merchant discipline ensures relevance to timeless Gen Z consumer while maintaining 'Coach DNA' and trend creation rather than chasing. Hinted at new silhouette innovations coming.

Patented data fabric provides competitive advantage foundationAI embedded across design, inventory, pricing, marketing with human-in-loopDesign iteration speed increased through AI color/style multipliers$200M CapEx: >50% stores, remainder technology (tech debt resolved)

Answers to last quarter's watch list

Q2 (holiday) Coach growth against the two-year stack. Coach printed +25% in Q2 against a +14% prior-year base — accelerating from +22% in Q1, not decelerating as the conservative guide implied. Coach NA specifically printed +27%. The holiday quarter, on the toughest comp of the year, accelerated. This is the strongest possible answer to the watch question and is the single largest driver of the FY raise.

Resolved positively

Whether the operating margin walk firms up beyond ~50bps net. Net margin expansion guide moved from ~50bps to ~180bps — a ~130bps upward revision in one quarter. The tariff drag eased from ~230bps to ~200bps and operational gross margin expansion is now guided to ~180bps, with ~160bps of SG&A leverage on top. The walk is fully disclosed and unambiguously positive.

Resolved positively

Kate Spade revenue moving toward flat. Kate Spade printed -14% in the holiday quarter and the FY26 guide remains a high-single-digit decline. Management framed the print as in line with expectations given the deliberate 40% holiday SKU cut and promo pullback, with sequential improvement planned for H2. The Gen Z handbag acquisition KPIs are reportedly improving, but the topline still bends the wrong way. Status: Resolved mixed

Europe sustaining above +25%. Europe printed +27% reported / +22% CC, decelerating from Q1's +39% but holding well above +25% reported, and management held the FY Europe guide at ~20%. The structural-pillar thesis remains intact.

Resolved positively

Coach AUR growth holding in mid-teens with units still positive. Coach handbag AUR grew mid-teens AND units grew mid-teens in the holiday quarter — the Q1 unit inflection extended rather than reversed, and did so in the most promotional period of the year. Management explicitly stated AUR and units contributed approximately equally to topline momentum.

Resolved positively

Whether Q2 actuals run hot vs. the prior FY framing. Pro forma revenue printed +18% (vs the 7–8% pro forma FY frame, ~1,000bps beat) and EPS printed $2.69 (+34% YoY). The Q2 beat funded ~50¢ of the ~80¢ FY EPS raise.

Resolved positively

What to watch into next quarter

Q3 EPS vs the explicit ~$1.25 guide (+20%+). Management has guided Q3 EPS to ~$1.25 with a ~14% tax rate. Watch the beat magnitude and quality — a meaningful beat with operating-line leverage (vs tax-driven) would set up a fourth consecutive FY raise on the Q4 call.

Q3 pro forma revenue vs the ~+14% CC guide. Coach is guided up high-teens CC, Kate Spade down high single digits. Coach printing above high-teens would extend the second-derivative-positive narrative; a deceleration toward mid-teens would mark Q2 as the peak rather than the new baseline.

Q3 operating margin vs the ~+70bps expansion guide. Management has telegraphed >150bps SG&A leverage offsetting tariff-driven gross margin decline. Watch whether the GM tariff drag tracks to the ~200bps FY frame or comes in lighter (as in Q2 at 190bps).

Kate Spade sequential improvement. Management's H2 framing embeds mid- to high-single-digit decline (vs -14% in Q2). If Q3 prints worse than -10%, the "deliberate trade" framing weakens; better than -8% validates it and the FY high-single-digit guide.

Coach North America cycling the +18% / +22% / +27% three-quarter stack. Coach NA has accelerated for three consecutive quarters against rising comps. Whether it holds above +20% in Q3 is the cleanest single read on the "new baseline vs peak" debate.

Greater China sustaining the +35% pace or moderating to the 25%+ FY guide. The new FY China guide implies Q3/Q4 China at roughly +20–25% — explicit decel from +35%. Whether that decel materializes or China continues to print +30%+ is the key swing factor on the FY revenue guide.

Whether 3.7M new customers in Q2 was a holiday-driven peak or a new run rate. FY25 acquired 6.8M customers total; H1 FY26 alone has now done 5.9M (2.2M + 3.7M). A Q3 print holding above 1.5M new customers would validate the structural acquisition thesis; a sharp drop would suggest holiday pull-forward.

Sources

Tapestry, Inc. Q2 FY2026 Press Release (Form 8-K Exhibit 99.1), filed February 5, 2026: https://www.sec.gov/Archives/edgar/data/1116132/000114036126003783/ef20064297_ex99-1.htm
Tapestry, Inc. Q2 FY2026 earnings conference call transcript, February 5, 2026.
Tapebrief Q1 FY2026 and Q4 FY2025 coverage of TPR for guidance-change baselines and watch-list resolution.

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