Tapestry reported Q4 FY'26 net revenue of $1.88 billion, up 9% year-over-year on a reported basis (8% in constant currency; 12% reported / 11% constant currency on a pro forma basis excluding the divested Stuart Weitzman business), driven by continued strength in the Coach brand, which grew 15% (14% constant currency). GAAP net income reached $347.8 million ($1.68 per diluted share), compared to a net loss in the prior-year period. Non-GAAP diluted EPS was $1.32, up 28% year-over-year, topping consensus estimates and supported by operating margin expansion and disciplined SG&A leverage. Non-GAAP gross margin expanded 180 basis points to 78.1% in the quarter, driven by operational improvements and a favorable mix impact from the Stuart Weitzman divestiture.
Note: Tapestry's FY'26 ended on June 27, 2026.
Following the formal mutual termination of the $8.5 billion Capri Holdings acquisition, Tapestry focused its strategy on accelerating organic growth and returning capital to shareholders. The divestiture of Stuart Weitzman streamlined operations, allowing management to prioritize Coach's international expansion and capital allocation. In FY'26, Tapestry returned $1.7 billion to shareholders through share buybacks and dividends, and the company initiated its Fiscal 2027 outlook, guiding to mid-single-digit revenue growth and low-double-digit EPS growth.
Below are key drivers of Tapestry's value that present opportunities for upside or downside to the current Trefis price estimate:
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Tapestry, Inc. is a New York-based modern luxury house holding iconic lifestyle brands including Coach and Kate Spade. The company generates revenue primarily through direct-to-consumer channels, operating retail and outlet stores as well as e-commerce platforms alongside selective wholesale distribution worldwide.
The Coach segment serves as Tapestry's dominant revenue engine and primary profit driver.
Coach accounts for over 85% of total company revenue. Strong brand equity enables Coach to execute an elevated pricing strategy, reducing promotional reliance and generating gross margins near 80%.
Tapestry maintains tight control over its distribution through a vast network of directly operated stores and digital storefronts, securing real-time consumer data, supply chain agility, and high return on capital.
Growth in global premium leather goods is increasingly driven by direct-to-consumer digital channels and high-intent international markets in Asia and Europe, where Tapestry is expanding flagship retail footprints.
With major M&A off the table, Tapestry relies on strong free cash flow generation to fund share repurchases and dividend increases, enhancing earnings per share growth and supporting valuation multiples.
