Tapestry, Inc. TPR has two of the most recognizable retail brands in the world in Coach and Kate Spade New York. This Zacks Rank #1 (Strong Buy) is expected to grow its earnings 13.8% this fiscal year.
Tapestry has two global brands, Coach and Kate Spade New York. Coach was founded in 1941 in New York as the Original American House of Leather. Kate Spade was founded in 1993 on a collection of six iconic handbags.
Tapestry operates retail stores and e-commerce channels.
Another Earnings Beat for Tapestry in the Fiscal Third Quarter 2026
On May 7, 2026, Tapestry reported its fiscal third quarter 2026 results and beat the Zacks Consensus Estimate by $0.35. Earnings were $1.66 versus the consensus of $1.31.
It was the eleventh earnings beat in a row. Tapestry has only missed on earnings once in the last five years.
Net sales jumped 21% to $1.92 billion and were also up 19% on a constant currency basis.
Gross margin was 76.9% up from 76.1% in the year ago quarter. The 80 basis points improvement in the margin was due to operational improvements of about 190 basis points as well as a favorable impact from the sale of Stuart Weitzman of 70 basis points.
Tariff and duty impacts were negative in the quarter by 180 basis points.
Tapestry acquired over 2.4 million new customers globally in the quarter, led by an increase in the number of GenZ customers. GenZ represented over 35% of new customers in the quarter.
It saw accelerated growth in core leathergoods, led by strong handbag revenue gains at Coach. Handbag units rose more than 20%.
Sales in most geographies were higher with North America, the company’s largest market, up 20%. Greater China jumped 55% and Europe gained 21%.
Only Japan was weak in the quarter, falling 10%.
Tapestry Raised Full Year 2026 Guidance
After such a strong quarter, it’s not surprising that Tapestry raised its fiscal full year 2026 guidance.
It now expects revenue of around $7.95 billion, which is growth of about 14%.
Earnings are now expected around $6.95, up from its previous guidance of $6.40 to $6.45.
Given the higher guidance, it’s not surprising that the analysts have raised earnings estimates. Two estimates are higher in the last 30 days and seven are higher in the prior 60 days.
The Zacks Consensus is calling for $6.95, up from $6.87 just 30 days ago. That’s earnings growth of 36.3% versus FY 2025 when the company made $5.10.
Two estimates are also higher in the last month for FY2027. It has pushed the Zacks Consensus for FY2027 to $7.61 from $7.46. This is another 9.4% earnings growth.
This is what it looks like on the price and consensus chart.
Image Source: Zacks Investment Research
Shares of Tapestry are up Double Digits in 2026
Shares of Tapestry have rallied in the last year and while things got rockier in 2026 when the Middle East conflict began, the shares are still up double digits this year.
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Tapestry is attractively priced with a forward price-to-earnings (P/E) of 20.6. This is under the average P/E of the S&P 500 which is at 21.
The company is also shareholder friendly. It has been generating significant free cash flow.
It expects to return $1.6 billion to shareholders this year, up from its previous guidance of $1.5 billion. This is approximately 100% of its anticipated adjusted free cash flow.
The company pays a dividend, which is yielding 1.1%. It also has a shareholder buyback program of $1.3 billion. During the fiscal third quarter it repurchased about $150 million in shares. Year-to-date it has spent a total of $1.05 billion out of the $1.3 billion.
For investors looking for strong global retail brands with double digit revenue growth, Tapestry should be on your short list.
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This article originally published on Zacks Investment Research (zacks.com).
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
