What are the guidance assumptions for unit versus AUR growth, especially after strong AUR growth, and what drove Q4 unit performance?

Q4 unit performance was in line with expectations, influenced by fewer promotional days and strong Q3 sell-through. The 'One Coach' strategy allows for higher AURs by integrating collection product into outlet stores. FY27 guidance assumes both unit and AUR growth, with a focus on quality sales and not churning units. “what's embedded in our guidance assumes both unit and AUR growth in '27 and beyond.”

How is the normalization of domestic growth at Coach being thought about, given past moderation, and what is the North America growth underpinning the Q1 global Coach guide?

Coach North America is in a strong position, growing intentionally without degrading the brand or margin. The 2-year stack for North America Coach is approximately 30% for Q4, Q1, and the full FY27, demonstrating compounding growth on a large base. The strong momentum is expected to continue. “If you look at the 2-year stack for North America Coach in both Q4, Q1 and the full year guide, it's about 30%, right? So we're comping the comp.”

Can you clarify the 30% 2-year stack for North America Coach and provide a bridge for gross margin expansion after Q1?

Gross margin will be lumpy due to tariff impacts (benefit in H1, headwind in H2), but the company expects approximately 30 bps growth for FY27. Structural drivers like brand strength, AUR, and international growth remain unchanged. The 30% 2-year stack for North America Coach is consistent across Q4, Q1, and the full FY27. “I think the important thing to take away here is we are growing gross margin about 30 bps for the year. It's implied in our guidance.”

TPR

Tapestry (TPR) Q4 FY26 earnings call: guidance and Q&A

Q: How is Tapestry thinking about the setup for FY27, current demand at Coach relative to the Q1 guide, and confidence in back-half growth durability?

Tapestry is highly confident in growth durability, building on a strong FY26 where Investor Day commitments were met two years early. The company is now growing from a higher base while maintaining its long-term algorithm. Coach's momentum continues, and the Q1 guide reflects current strong estimates, with the full-year outlook built prudently. “Q1 does capture our current estimates for the business. We expect low teens revenue growth at Coach. That's consistent with what we delivered in Q4. So the momentum continues. And importantly, our full year guide doesn't require us to keep that same level of growth at Coach for the balance of the year.”

Earnings call· Jun 2026 (Q4 FY26)· Consumer Discretionary· Aug 13, 2026

Source: earnings call transcript

Executive summary

Tapestry Q4 FY26 — Exceeds Commitments, Strong Growth & Shareholder Returns

Tapestry concluded FY26 by significantly surpassing its Investor Day financial commitments two years ahead of schedule, driven by robust customer acquisition and strong global momentum. The company is confident in its ability to deliver mid-single-digit revenue growth and low double-digit EPS growth in FY27, supported by strategic investments in brands, technology, and a disciplined capital allocation strategy, despite some unevenness in quarterly profitability and continued investment in Kate Spade.

Highlights

Achieved FY26 revenue of $8 billion, growing 17% on a pro forma constant currency basis.
Expanded operating margin by 340 basis points to over 23% for FY26.
Increased FY26 EPS by 38% to $7.05.
Welcomed 11 million new customers to brands in FY26, led by Gen Z.
Returned $1.7 billion to shareholders in FY26, including $326 million in dividends and $1.35 billion in share repurchases.

Concerns

Kate Spade's top line progress was more gradual than planned in FY26, with a high single-digit decline expected for FY27.
Japan sales declined 4% in Q4 FY26 due to intentional pullback in promotions.
Q4 FY26 EPS faced a headwind of more than $0.05 from a higher tax rate versus plan.
Inventory levels were 4% below prior year at year-end, slightly below expectations due to a shift in receipt timing into Q1.

Guidance & targets

Category	Target	Timeline	Confidence
Full-year FY27 Revenue	$8.4 billion to $8.5 billion high materiality	FY27	High
Full-year FY27 FX Impact on Revenue	40 basis point tailwind medium materiality	FY27	High
Full-year FY27 North America Revenue Growth	low single digits medium materiality	FY27	High
Full-year FY27 Europe Revenue Growth	mid-teens medium materiality	FY27	High
Full-year FY27 Greater China Revenue Growth	mid-teens medium materiality	FY27	High
Full-year FY27 Japan Revenue Growth	return to growth medium materiality	FY27	High
Full-year FY27 Other Asia Revenue Growth	high single-digit gains medium materiality	FY27	High
Full-year FY27 Coach Growth	high single-digit growth high materiality	FY27	High
Full-year FY27 Kate Spade Growth	high single-digit decline high materiality	FY27	High
Full-year FY27 Operating Margin Expansion	50 basis points to nearly 24% high materiality	FY27	High
Full-year FY27 Gross Margin Increase	approximately 30 basis points medium materiality	FY27	High
Full-year FY27 SG&A Leverage	approximately 20 basis points medium materiality	FY27	High
Full-year FY27 Coach Operating Margin	nearly 36% medium materiality	FY27	High
Full-year FY27 Kate Spade Operating Margin	modest operating loss medium materiality	FY27	High
Full-year FY27 Corporate Expenses	leverage low materiality	FY27	High
Full-year FY27 Net Interest Expense	approximately $55 million low materiality	FY27	High
Full-year FY27 Tax Rate	approximately 18.5% medium materiality	FY27	High
Full-year FY27 Weighted Average Diluted Share Count	approximately 203 million shares medium materiality	FY27	High
Full-year FY27 EPS	$7.80 to $7.90 high materiality	FY27	High
Full-year FY27 53rd Week Revenue Contribution	approximately 1 percentage point low materiality	FY27	High
Full-year FY27 53rd Week Operating Margin Impact	neutral impact low materiality	FY27	High
Full-year FY27 Adjusted Free Cash Flow	approach $1.7 billion high materiality	FY27	High
Full-year FY27 CapEx and Cloud Computing Costs	in the area of $300 million medium materiality	FY27	High
Full-year FY27 CapEx Split (Fleet vs. Tech)	70% fleet growth / 30% tech/digital low materiality	FY27	High
Full-year FY27 Revenue Growth Phasing (H1)	high single digits medium materiality	H1 FY27	High
Full-year FY27 Revenue Growth Phasing (H2)	mid-single digits medium materiality	H2 FY27	High
Full-year FY27 EPS Growth Phasing (H1)	low double-digit growth medium materiality	H1 FY27	High
Full-year FY27 EPS Growth Phasing (H2)	low double-digit growth medium materiality	H2 FY27	High
Q1 FY27 Revenue Growth	high single digits high materiality	Q1 · FY27	High
Q1 FY27 Coach Growth	low teens growth high materiality	Q1 · FY27	High
Q1 FY27 Kate Spade Decline	low double-digit decline high materiality	Q1 · FY27	High
Q1 FY27 Gross Margin Increase	120 basis points medium materiality	Q1 · FY27	High
Q1 FY27 Operating Margin	in line with prior year medium materiality	Q1 · FY27	High
Q1 FY27 EPS	approximately $1.55 high materiality	Q1 · FY27	High
Annualized Dividend Rate	$1.85 per share high materiality	FY27	High
Share Repurchases	approximately $1.35 billion high materiality	FY27	High
Long-term Gross Leverage Target	below 2.5x medium materiality	Long-term	High
Coach Net New Doors	40 to 50 doors medium materiality	FY27	High
Coach Expressive Luxury Store Concept Rollout	80% of traffic medium materiality	FY30	High

Segment performance

Segment	Revenue	YoY	QoQ	Margin
Tapestry (Company-wide) FY26 revenue on a pro forma constant currency basis. FY26 operating margin and EPS. EPS: $7.05	$8 billion	17%	—	over 23%
North America Sales growth in Q4 FY26.	—	7%	—	—
Europe Revenue growth in Q4 FY26, fueled by direct business and new customer acquisition.	—	19%	—	—
Greater China Revenue growth in Q4 FY26, driven by broad-based growth across channels.	—	28%	—	—
Other Asia Revenue growth in Q4 FY26, led by South Korea and Australia.	—	22%	—	—
Japan Sales decline in Q4 FY26, reflecting intentional pullback in promotions.	—	-4%	—	—
Direct-to-Consumer (D2C) Revenue increase in Q4 FY26.	—	11%	—	—
Digital Sales Growth in Q4 FY26.	—	mid-single digits	—	—
Global Brick-and-Mortar Sales Increase in Q4 FY26.	—	mid-teens	—	—
Coach Constant currency revenue growth in Q4 FY26. Strong customer acquisition and AUR growth. New customers acquired (Q4): 2 millionNew customers acquired (FY26): 9 millionHandbag AUR increase (Q4): mid-teensHandbag unit volumes (Q4): roughly in line with prior yearHandbag AUR increase (FY26): mid-teensHandbag units increase (FY26): low double digitsNorth America growth (Q4): 10%Greater China growth (Q4): 30%Europe growth (Q4): 25%Footwear growth (Q4): high teens	—	14%	—	—
Kate Spade Top line progress was more gradual than planned in FY26. Focus on building brand desire and relevance. New customers acquired (Q4): 450,000New customers acquired (FY26): 2 millionNew customer AUR: higher than balance of customer base	—	—	—	—

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	Mar 2026 Q3 FY26	This call 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
New York family (Brooklyn, Empire, Chelsea)	update	Q4 FY26
Tabby family	update	Q4 FY26
Teri family	update	Q4 FY26
Soho family sneakers	update	Q4 FY26
Margot sneakers	update	Q4 FY26
Margot, 454 and Duo families	update	Q4 FY26
Coach Play locations	expansion	Q4 FY26
Coach 85th anniversary fashion show	milestone	September [2026]

Deals & partnerships

Stuart Weitzman Divestiture of the Stuart Weitzman brand.

The divestiture had a favorable impact on gross margin in the fourth quarter.

Risks & headwinds

Kate Spade top line progress FY26

more gradual than planned

Mitigation:Focused on strengthening creative execution, product, and storytelling; new CMO and Executive Creative Director appointments.

Japan sales decline Q4 FY26

4% decline

Mitigation:Intentional pullback in promotions.

Higher tax rate Q4 FY26

more than $0.05 EPS headwind

Mitigation:Due to a number of discrete items, versus plan.

Inventory levels below expectations FY26 year-end

4% below prior year

Mitigation:Due to a shift in receipt timing into Q1; expect inventory to increase YoY in FY27.

Macro uncertainty and evolving tariff dynamics FY27

unquantified

Mitigation:Company operates with flexibility and discipline in guidance; tariffs expected to be a modest benefit in H1 and a headwind in H2, with a net neutral P&L impact for the full year.

Shifts in cadence of marketing investments FY27

unquantified

Mitigation:Flexibility to be opportunistic and lean in when data indicates opportunities.

Uneven quarterly profitability FY27

unquantified

Mitigation:Due to macro uncertainty, tariff dynamics, and marketing investment shifts.

What to watch in Q1 FY27

Coach North America 2-year stack growth

Q1 FY27 and full FY27

Current ~30% (Q4 FY26)

Target Maintain ~30%

Why it matters

This indicates sustained momentum and compounding growth on a large base for the core brand in its largest market, crucial for overall company performance.

If you look at the 2-year stack for North America Coach in both Q4, Q1 and the full year guide, it's about 30%, right? So we're comping the comp.

Find out whether TPR delivers this. Inve re-checks your case every morning.

Q&A highlights

How is Tapestry thinking about the setup for FY27, current demand at Coach relative to the Q1 guide, and confidence in back-half growth durability?

Tapestry is highly confident in growth durability, building on a strong FY26 where Investor Day commitments were met two years early. The company is now growing from a higher base while maintaining its long-term algorithm. Coach's momentum continues, and the Q1 guide reflects current strong estimates, with the full-year outlook built prudently.

“Q1 does capture our current estimates for the business. We expect low teens revenue growth at Coach. That's consistent with what we delivered in Q4. So the momentum continues. And importantly, our full year guide doesn't require us to keep that same level of growth at Coach for the balance of the year.”

asked by Matthew Boss · answered by Scott Roe

3 min read 7 chapters

Detailed narrative

FY26 Achievements and Strategic Foundation

Tapestry significantly exceeded its 3-year Investor Day commitments two years ahead of schedule in FY26, achieving $8 billion in revenue (up 17% pro forma constant currency), expanding operating margin to over 23% (up 340 bps), and increasing EPS by 38% to $7.05.

This success was driven by intentional choices, disciplined execution, and a deep understanding of the consumer, strengthening the organization for durable growth and long-term shareholder value. The company's direct consumer relationships, data-driven decision-making, global scale, and agile operating model are cited as increasing competitive advantages.

Coach Brand Momentum and Growth Drivers

Coach delivered another strong quarter with 14% constant currency revenue growth, capping an exceptional year. The brand welcomed 9 million new customers in FY26 (2 million in Q4 alone), primarily Gen Z, and saw existing customers drive strong sales. Handbag average unit retail (AUR) increased mid-teens, and unit volumes were roughly in line with the prior year, reflecting a deliberate strategy to prioritize brand health and reduce promotions.

Strong performance was observed across North America (up 10%), Greater China (up 30%), and Europe (up 25%), reinforcing Coach's global resonance and path to becoming a $10 billion brand.

Kate Spade's Strategic Evolution and Future Focus

Kate Spade's strategy involves streamlining, solidifying its foundation, and positioning for scale. While top-line progress was more gradual than planned in FY26, the brand saw continued improvement in handbags, driven by blockbuster families like Margot, 454, and Duo. Kate Spade acquired 2 million new customers in FY26 (450,000 in Q4) at higher AURs.

The appointment of Allison Badea as CMO and Jonathan Saunders as Executive Creative Director is expected to fuel brand desirability and creative execution as the brand moves towards sustainable, profitable growth.

Global Market Penetration and International Opportunities

Tapestry views international markets, particularly Europe and Greater China, as significant long-term growth opportunities due to relatively low brand penetration. Europe revenue grew 19% in Q4, and Greater China revenue rose 28%, both driven by robust new customer acquisition, especially among Gen Z, and meaningful market share gains.

Japan is forecasted to return to growth in FY27, and Other Asia anticipates high single-digit gains, highlighting broad-based international momentum.

Profitability and Operational Efficiency

The company's D2C-led model continued to drive strong results, with D2C revenue increasing 11%, digital sales up mid-single digits, and global brick-and-mortar sales up mid-teens in Q4. Gross margin expanded 180 bps to 78.1% in Q4, primarily due to operational improvements and a favorable impact from the Stuart Weitzman divestiture, despite tariff headwinds.

SG&A leveraged 80 bps, leading to a 250 bps expansion in operating margin and a 25% increase in operating income.

Capital Allocation and Shareholder Returns

In FY26, Tapestry returned $1.7 billion to shareholders, comprising $326 million in dividends and $1.35 billion in share repurchases. For FY27, the company plans to return another $1.7 billion, including a 16% dividend increase to an annualized rate of $1.85 per share and $1.35 billion in share repurchases.

The company maintains a strong balance sheet with $1.2 billion in cash and short-term investments, net debt of $1.2 billion, and a gross debt to adjusted EBITDA leverage ratio of 1.1x, well below its long-term target of 2.5x.

Investment in AI, Technology, and Store Fleet

Tapestry is committed to leveraging AI, having secured its first AI patent and building on over a decade of investment in data and decision intelligence to differentiate operations. The company plans a step-up in CapEx and cloud computing costs to $300 million in FY27, with 70% allocated to growing and enhancing its store fleet.

Coach specifically aims to add 40-50 net new doors globally (75% international) and expand its expressive luxury store concept to impact 80% of traffic by FY30, driving higher engagement with Gen Z.

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