Tapestry Surpasses Three-Year Targets Two Years Early, Delivering Record Revenue and Margins
The Coach and Kate Spade parent company achieved $8 billion in revenue and expanded operating margins to over 23%, driven by Gen Z customer acquisition and strength in luxury leather goods.
Record Performance Ahead of Schedule
Tapestry, Inc. delivered fiscal 2026 results that exceeded the three-year targets set at its Investor Day "2 years ahead of plan," CEO Joanne Crevoiserat announced on the company's earnings call (earnings call, 2026-08-13). The luxury accessories conglomerate achieved revenue of $8 billion, growing 17% on a pro forma constant currency basis, while expanding operating margin by 340 basis points to over 23% and increasing earnings per share by 38% to $7.05.
The performance was fueled by customer acquisition, with the company welcoming 11 million new customers to its brands during the year, led by Gen Z consumers. Tapestry accelerated growth in its core leather goods category with both average unit retail (AUR) and unit growth, reinforcing its position in what Crevoiserat called "one of the most attractive categories within the consumer space because of its enduring demand, compelling economics and significant runway for growth" (earnings call, 2026-08-13).
Coach Continues Strong Momentum
Coach delivered constant currency revenue growth of 14% in the fourth quarter, capping what Crevoiserat described as "an exceptional year" for the 85-year-old brand. The brand welcomed over 2 million new consumers in the quarter and nearly 9 million for the full year, with growth led by Gen Z customers whose influence "extended across generations" (earnings call, 2026-08-13).
Handbag AUR increased at a mid-teens rate in Q4 with unit volumes roughly flat year-over-year, consistent with the company's "deliberate strategy to prioritize brand health and reduce promotions." For the full year, handbag AUR rose mid-teens while units increased low double digits (earnings call, 2026-08-13).
Geographic performance remained robust, with North America up 10%, Greater China rising 30%, and Europe increasing 25% in the fourth quarter. Crevoiserat said the company continues to see "a clear path to Coach becoming a $10 billion brand" (earnings call, 2026-08-13).
The brand's One Coach strategy, which blurs traditional retail and outlet channel distinctions by bringing collection product at full price into outlet stores and unifying the digital experience through a single coach.com, has driven customer acquisition and higher AURs globally. Marketing investments increased approximately 20% versus the prior year, with a continued shift toward top-of-funnel brand building.
Kate Spade Foundation Building
While Kate Spade's "top line progress was more gradual than we planned," the brand 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 (earnings call, 2026-08-13).
The company announced the appointment of Jonathan Saunders as Executive Creative Director and Alison Badea as Chief Marketing Officer as it works to strengthen creative execution and brand awareness. Handbag blockbusters led by the Margot, 454, and Duo families drove customer acquisition, particularly among Gen Z consumers.
Technology and Innovation
Tapestry secured its first AI patent during the year, building on previously patented data fabric technology, reflecting what Crevoiserat called "our culture of innovation and more than a decade of investment in data, decision intelligence and enterprise technology" (earnings call, 2026-08-13).
MarginX data shows recent insider activity including options exercises by Todd Kahn, CEO and Brand President of Coach.
This article was generated by MarginX from the earnings call on 2026-08-13. It is not investment advice.