Inquired about expectations for Coach's growth in FY27 and beyond, given the exceptional FY26 performance, and the visibility into a normalized growth rate for the brand.

Scott Roe reiterated confidence in at least mid-single-digit growth for Coach, underpinned by AUR growth (inflation + 1 point) and new customer acquisition. Todd Kahn elaborated on the massive Gen Z TAM, strong leather goods innovation, "expressive luxury" positioning, differentiated marketing approach, and investments in stores and experiences, reinforcing the $10 billion Coach goal. “Coach goal of $10 billion at best-in-class margins is more attainable than ever.”

Asked Joanne to elaborate on the compounding flywheel effect of new customer acquisition, especially Gen Z, for Coach in North America and China, and its impact on units. Asked Scott about operational gross margin drivers (AUR, AUC) going forward.

Joanne explained that Gen Z acquisition fuels growth, drives higher retention and lifetime value, and influences all generations, creating a compounding effect. Scott detailed gross margin drivers: AUR growth (innovative product, newness, international growth, One Coach initiative) and AUC efficiency from their superior supply chain, which engineers products smarter. “When we capture that first luxury bag purchase, we engender brand love for a lifetime. Those are the stories I just mentioned. Second, we have an opportunity to drive higher lifetime value.”

Asked Todd about balancing risk-taking innovation (e.g., Tabby, New York, Kiss Lock) with core franchises, especially in a dynamic environment. Also asked Joanne/Todd about the drivers of continued strength in Europe.

Todd attributed innovation success to stability, clarity of design, and focus on the "timeless Gen Z customer," amplifying major families with fewer SKUs and controlled drops. He noted that Europe's growth is driven by Coach's expressive luxury, authenticity, and consumer connection, with significant runway remaining due to low penetration. “When you walk into a Coach store, you know you're walking into a Coach store. When you see a Tabby bag on someone's shoulder, you see a definitive brand code with the C that is ownable and exclusive to us and then the quality.”

TPR

Tapestry (TPR) Q3 FY26 earnings call: guidance and Q&A

Q: Asked about the implications of delivering Investor Day targets two years early and the growth trajectory for FY27 and beyond, given the strong FY26 EPS and operating margin guidance.

Joanne Crevoiserat stated that the company is "just getting started" and remains confident in its long-term algorithm of mid-single-digit revenue growth as a floor, driven by consumer obsession, agile operating model, and low share in a large global TAM. She highlighted continued investments in product innovation, marketing, and store experiences. “Our goal is clear and unchanged to deliver durable growth that's defined for us as mid-single-digit revenue growth as a floor, well ahead of the category at best-in-class margins, which we expect will deliver exceptional TSR.”

Earnings call· Mar 2026 (Q3 FY26)· Consumer Discretionary· May 7, 2026

Source: earnings call transcript

Executive summary

Tapestry Q3 FY26 — Strong Outperformance Driven by Coach and New Customer Acquisition

Tapestry delivered a standout Q3 FY26, significantly outperforming expectations with robust revenue growth and margin expansion, primarily fueled by the Coach brand's strong performance and successful Gen Z customer acquisition. The company raised its full-year outlook, demonstrating confidence in its Amplify strategy and structural advantages, despite a revenue decline at Kate Spade and tariff headwinds.

Highlights

Pro forma revenue grew 23% at constant currency, exceeding expectations.
Operating margin expanded 490 basis points, exceeding expectations.
EPS increased 62% versus prior year to $1.66, exceeding expectations.
Acquired over 2.4 million new customers globally, driven by Gen Z, with higher retention rates.
Coach delivered 29% constant currency revenue growth and increased profitability, welcoming 2 million new customers.

Concerns

Kate Spade revenue declined 11%, falling slightly below expectations due to strategic pullback in promotions.
Tariff and duty headwind of approximately 180 basis points on gross margin (150 bps for Coach, 440 bps for Kate Spade).
Japan sales declined 10% as expected due to intentional pullback in promotions.

Guidance & targets

Category	Target	Timeline	Confidence
Full-year FY26 Revenue	$7.95 billion high materiality	FY26	High
Full-year FY26 Pro Forma Revenue Growth (constant currency)	16% high materiality	FY26	High
Full-year FY26 North America Revenue Growth (constant currency, pro forma)	mid-teens medium materiality	FY26	High
Full-year FY26 Europe Revenue Growth (constant currency, pro forma)	20% medium materiality	FY26	High
Full-year FY26 Greater China Revenue Growth (constant currency, pro forma)	over 30% high materiality	FY26	High
Full-year FY26 Japan Revenue Growth (constant currency, pro forma)	high single-digit decline medium materiality	FY26	High
Full-year FY26 Other Asia Revenue Growth (constant currency, pro forma)	low double-digit gains medium materiality	FY26	High
Full-year FY26 Coach Revenue Growth	over 20% high materiality	FY26	High
Full-year FY26 Kate Spade Revenue Growth	low double-digit decline high materiality	FY26	High
Full-year FY26 Operating Margin	approximately 23% high materiality	FY26	High
Full-year FY26 Gross Margin Increase	approximately 110 basis points high materiality	FY26	High
Full-year FY26 SG&A Leverage	190 basis points favorable medium materiality	FY26	High
Full-year FY26 Marketing as % of Sales	approaching 13% medium materiality	FY26	High
Full-year FY26 Coach Operating Margin	expand medium materiality	FY26	High
Full-year FY26 Kate Spade Operating Profit	modest profit loss medium materiality	FY26	High
Full-year FY26 Net Interest Expense	approximately $60 million low materiality	FY26	High
Full-year FY26 Tax Rate	approximately 17.5% low materiality	FY26	High
Full-year FY26 Weighted Average Diluted Share Count	approximately 210 million shares low materiality	FY26	High
Full-year FY26 EPS	in the area of $6.95 high materiality	FY26	High
Full-year FY26 Adjusted Free Cash Flow	approach $1.6 billion high materiality	FY26	High
Full-year FY26 CapEx and Cloud Computing Costs	in the area of $200 million medium materiality	FY26	High
Q4 FY26 Pro Forma Revenue Growth (reported & constant currency)	low double digits high materiality	Q4 · FY26	High
Q4 FY26 Coach Growth Rate	low teens high materiality	Q4 · FY26	High
Q4 FY26 Kate Spade Growth Rate	high single-digit decline high materiality	Q4 · FY26	High
Q4 FY26 Operating Margin Expansion	approximately 60 basis points medium materiality	Q4 · FY26	High
Q4 FY26 Gross Margin Increase	in the area of 130 basis points medium materiality	Q4 · FY26	High
Q4 FY26 Marketing Increase	over 300 basis points medium materiality	Q4 · FY26	High
Q4 FY26 EPS	approximately $1.20 high materiality	Q4 · FY26	High
Coach Revenue	$10 billion high materiality	over time	High
Tapestry Revenue Growth	mid-single-digit revenue growth as a floor high materiality	long-term	High
Coach Revenue Growth	at least mid-single digit high materiality	long-term	High
AUR Growth	at least inflation plus a point medium materiality	long period of time	High
New Door Expansion Contribution to Growth	1 to 2 points medium materiality	long-range plan	High
Coach Store Fleet Renovation	majority of the fleet medium materiality	next couple of years	High

Segment performance

Segment	Revenue	YoY	QoQ	Margin
Tapestry (Pro Forma) Exceeded expectations. Constant currency growth: 23%	—	23%	—	—
North America Fueled by Coach's 27% increase. Market share gainsOperating margin expansion	—	20%	—	—
Europe Driven by local consumer spending. Significant opportunity for further growth due to low penetration. Direct business strengthStrong new customer acquisition (Gen Z)Strong market share gains	—	21%	—	—
Greater China Outperformed expectations. Significant market share gainsAccelerated customer acquisitionBroad-based growth across channels (led by digital)Exceeded Chinese New Year planWinning with Gen Z consumers	—	55%	—	—
Other Asia Led by growth primarily in South Korea and Australia.	—	16%	—	—
Japan As expected, driven by intentional pullback in promotions.	—	-10%	—	—
Direct-to-Consumer (DTC) Fueled by strong global momentum. Digital growth: approximately 25%Global brick-and-mortar sales growth: over 20%	—	23%	—	strong and increasing profitability
Coach Delivered another exceptional quarter, executing strategies with "Magic and Logic". Strong momentum across key geographies. Constant currency revenue growth: 29%2 million new customers acquiredGen Z acquisition accelerated meaningfullyUnit volumes increasing: over 20%AUR growth: low double-digit rateNorth America growth: 27%Greater China growth: 58%Europe growth: 27%Footwear growth: approximately 20% (fueled by sneakers)	—	29%	—	increased profitability
Kate Spade Top line trends improved sequentially but fell slightly below expectations due to strategic pullback in promotions. Continued strategic brand investments. 400,000 new customers acquiredHandbag blockbusters (Duo, Margot) outperformedHigher full-price sellingHandbag AUR growth at constant currency	—	-11%	—	exceeded plan

TPR operating KPIs by quarter

TPR operating KPIs stated on its earnings calls, by fiscal quarter
KPI	Dec 2024 Q2 FY25	Mar 2025 Q3 FY25	Jun 2025 Q4 FY25	Sep 2025 Q1 FY26	Dec 2025 Q2 FY26	This call Mar 2026 Q3 FY26	Jun 2026 Q4 FY26	Change vs prior quarter
New customers acquired North America	~2.7M During the quarter, we drove new customer acquisition growth, welcoming approximately 2.7 million new customers in North America alone. Source: earnings call transcript	1.2M+ In North America specifically, we acquired over 1.2 million new customers in the quarter, representing strong growth versus last year. Source: earnings call transcript	—	—	—	—	—	—
New customers acquired Coach North America	1.7M+ Overall, our holistic brand building activities helped to drive increases in new customer acquisition as we welcomed over 1.7 million new customers to Coach in North America, a strong increase versus prior year and a significant acceleration in trend. Source: earnings call transcript	<900K Overall, our holistic brand-building activities helped to drive increases in new customer acquisition as we welcome nearly 900,000 new customers to Coach in North America, of which nearly 70% were Gen Z and millennials. Source: earnings call transcript	1M+ This is evident in our strong customer acquisition results as we welcomed over 4.6 million new customers to Coach in North America this year with over 1 million new customers in the fourth quarter, of which nearly 70% were Gen Z and millennials. Source: earnings call transcript	—	—	—	—	—
New customers acquired Coach	—	—	—	1.7M+ This is evident in our strong customer acquisition results as we welcomed over 1.7 million new customers globally to Coach, a strong increase over prior year, led by Gen Z Our new and younger customers are transacting at higher AUR and have a higher retention rate than the balance of our client base. Source: earnings call transcript	2.9M Customer acquisition once again drove top line gains, welcoming 2.9 million new customers to the brand this quarter. Source: earnings call transcript	2M Customer acquisition once again drove our top line growth this quarter, with Coach welcoming 2 million new customers to the brand, a significant increase over the prior year. Source: earnings call transcript	2M+ We drove new customer acquisition around the world, welcoming over 2 million new consumers in the quarter and nearly 9 million for the full year. Source: earnings call transcript	—
New customers acquired	—	—	—	2.2M+ We built emotional connections with consumers, acquiring over 2.2 million new customers globally in the quarter, driven by Gen Z By connecting with consumers early in their journey, we're building lifetime value and reinforcing a competitive advantage, our ability to attract and retain new generations to our brands. Source: earnings call transcript	3.7M+ First, we built emotional connections with consumers, acquiring over 3.7 million new customers globally in the quarter, driven by a strategic focus on Gen Z This continues to be central to our healthy top line growth, as engaging consumers earlier in their purchase journey enhances repeat purchasing and lifetime value over time. Source: earnings call transcript	2.4M+ First, we built emotional connections with consumers acquiring over 2.4 million new customers globally in the quarter, driven by an increase in Gen Z This continues to be a key driver of our growth as engaging consumers earlier supports higher repeat purchasing and lifetime value. Source: earnings call transcript	—	—
New customers acquired kate spade	—	—	—	—	—	400K This is true across brand consideration, handbags performance and customer acquisition as we welcomed 400,000 new customers to kate spade in the quarter. Source: earnings call transcript	450K+ We welcomed over 450,000 new customers during the quarter and approximately 2 million for the full year, with these consumers transacting at higher AURs than the balance of the customer base, a foundational element of our strategy. Source: earnings call transcript	—

Operating figures the company stated on at least two of the calls shown, checked against each call's transcript. Click a figure to read the sentence. A dash means it was not stated that quarter.

Product announcements

Product	Type	Timeline
Chelsea Bag	launch	Q3 FY26
Duo and Margot Handbags	milestone	Q3 FY26
Expressive Luxury Store Concept	expansion	ongoing rollout
Coach Play Stores	launch	Q3 FY26
Coach Coffee Shops	expansion	ongoing expansion
Kate Spade Light-Touch Renovation Test	expansion	by fiscal year-end

Deals & partnerships

CLOT partnership

Partnership with a world-renowned Chinese streetwear brand for Lunar New Year in China. Included gaming, cafe, bespoke collection shop, and community activations.

Risks & headwinds

Disruption in the Middle East current

represents less than 1% of our sales

Mitigation:closely monitoring the situation; do not anticipate a material direct impact to our business at this time

Tariff and duty headwind on gross margin Q3 FY26

approximately 180 basis points (Tapestry), 150 basis point negative impact (Coach), 440 basis point negative impact (Kate Spade)

Mitigation:fully offset by operational expansion and Stuart Weitzman divestiture benefit; no price increases in direct response to tariffs

Strategic pullback in promotions at retail Q3 FY26

revenue declined 11% (Kate Spade), fell slightly below expectations

Mitigation:exceeded gross margin and profitability plan; continued strategic brand investments to support a return to profitable growth

Intentional pullback in promotions Q3 FY26

sales declined 10% (Japan)

Mitigation:expected decline (implies planned strategy)

Inflation in input costs current

not much (so far), modest cost pressure (fuel surcharges)

Mitigation:watching closely; not material at this point

Q&A highlights

Asked about the implications of delivering Investor Day targets two years early and the growth trajectory for FY27 and beyond, given the strong FY26 EPS and operating margin guidance.

Joanne Crevoiserat stated that the company is "just getting started" and remains confident in its long-term algorithm of mid-single-digit revenue growth as a floor, driven by consumer obsession, agile operating model, and low share in a large global TAM. She highlighted continued investments in product innovation, marketing, and store experiences.

“Our goal is clear and unchanged to deliver durable growth that's defined for us as mid-single-digit revenue growth as a floor, well ahead of the category at best-in-class margins, which we expect will deliver exceptional TSR.”

asked by Robert Drbul · answered by Joanne Crevoiserat

2 min read 6 chapters

Detailed narrative

Amplify Strategy Driving Outperformance

Tapestry's Amplify strategy continues to yield significant results, with Q3 FY26 pro forma revenue growing 23% at constant currency, operating margin expanding 490 basis points, and EPS increasing 62% year-over-year. This outperformance, driven by deep consumer connection and disciplined growth, led to an increased full-year outlook, underscoring the structural and sustainable advantages of the business model.

Customer Acquisition and Gen Z Engagement

The company successfully acquired over 2.4 million new customers globally in the quarter, with a significant increase in Gen Z consumers. These younger customers exhibit higher retention rates, supporting increased repeat purchasing and long-term lifetime value. This broad-based strength, including growth with existing customers, reinforces Tapestry's ability to attract and retain new generations across its brands.

Coach's Strong Performance and Market Share Gains

Coach delivered exceptional results with 29% constant currency revenue growth and increased profitability, welcoming 2 million new customers. The brand's core leather goods offering saw healthy growth with unit volumes up over 20% and AUR growing at a low double-digit rate.

Coach significantly outpaced the industry and gained market share in North America (up 27%), Greater China (up 58%), and Europe (up 27%), demonstrating global resonance and effective regional strategies.

Kate Spade Turnaround Progress and Challenges

Kate Spade's revenue declined 11%, though trends improved sequentially. The brand exceeded gross margin and profitability plans despite strategic investments and a pullback in promotions. Progress is noted in brand consideration, handbag performance (blockbusters like Duo and Margot), and customer acquisition (400,000 new customers), particularly among Gen Z.

However, unaided brand awareness has not yet improved, indicating more work is needed to scale marketing efforts and creative execution for consistent growth.

Strategic Marketing and Retail Experiences

Tapestry increased marketing spend by approximately 50% year-over-year, shifting towards top-of-funnel brand building to support sustained customer acquisition. Coach's "Explore Your Story" campaign resonated with Gen Z, and collaborations like CLOT in China drove cultural relevance. The rollout of new expressive luxury store concepts and Coach Play stores globally is enhancing immersive retail experiences, delivering higher traffic and dwell times, especially with Gen Z.

Capital Allocation and Shareholder Returns

The company's Board declared a quarterly cash dividend of $0.40 per share ($81 million total). Tapestry repurchased $150 million of stock in Q3, bringing the year-to-date total to $1.05 billion (9.3 million shares at ~$112 average). For FY26, the company expects to return $1.6 billion (100% of adjusted free cash flow) to shareholders, including over $300 million in dividends and $1.3 billion in share repurchases, reflecting strong organic business and robust free cash flow.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.