Tapestry, Inc., a prominent American fashion holding company, has released impressive results for the first quarter (Q1) of fiscal year 2026 (FY26), which ended on September 27, 2025. The company reported record revenues of $1.7 billion, reflecting a remarkable 13% year-over-year (YoY) increase, or 12% when adjusted for constant currency, marking the best Q1 performance in its history.
When examining the figures on a pro forma basis (excluding Stuart Weitzman), overall revenue climbed by 16% to $1.69 billion, largely driven by a significant 22% rise at the Coach brand. Regional growth was primarily led by North America with an 18% increase in constant currency, while Europe experienced a 32% surge and Greater China saw a 19% increase.
Gross profit for the quarter escalated by 15% to $1.3 billion, with the non-GAAP gross margin increasing by 120 basis points (bps) to an impressive 76.5%. This margin enhancement was fueled by operational efficiencies and effective management of selling, general, and administrative expenses (SG&A). Tapestry’s GAAP operating income totaled $328 million, while non-GAAP operating income was reported at $354 million, leading to margins of 19.3% and 20.9%, respectively.
In terms of earnings, GAAP diluted earnings per share (EPS) surged by 61% to $1.28, and non-GAAP EPS rose by 35% to $1.38. Non-GAAP net income reached $297 million, highlighting Tapestry’s successful execution of its ‘Amplify’ strategy.
Brand performance showed variations, with Coach being the standout, achieving a 22% growth (21% in constant currency) attributed to robust handbag sales and mid-teens growth in average unit retail (AUR). Conversely, Kate Spade faced an 8% decline (9% in constant currency). Direct-to-consumer (DTC) sales flourished, expanding by 16%, with balanced growth across both digital and physical sales channels. Tapestry also acquired over 2.2 million new customers across the globe, approximately 35% of whom were from Gen Z.
With strong cash generation and a well-maintained balance sheet, Tapestry aims to return $1.3 billion to its shareholders in FY26. This includes a quarterly dividend of $0.40 per share (annualized at $1.60) and an expanded share repurchase program now targeting $1 billion, an increase from the previous $800 million. The company repurchased $500 million of its shares in Q1 at an average cost of $106 per share.
Tapestry reported cash and short-term investments totaling $743 million, while borrowings amounted to $2.64 billion, resulting in a leverage ratio of 1.5 times. Inventory remained stable at $1.02 billion. Operating cash inflow was $113 million, and adjusted free cash flow improved to $103 million, aided by lower working capital and efficient cost management.
“Our first quarter outperformance signifies an exceptional start to our Amplify plan. With creativity, craftsmanship, and disciplined execution, we surpassed expectations for both revenue and earnings. We are confident in our structural advantages and are raising our full-year outlook to deliver sustained growth and long-term shareholder value,” stated Joanne Crevoiserat, CEO of Tapestry.
In light of these factors, Tapestry has adjusted its FY26 revenue guidance to approximately $7.3 billion, implying a 4% to 5% YoY growth, or 7% to 8% on a pro forma basis. The company anticipates non-GAAP EPS to fall between $5.45 and $5.60, which indicates projected growth of 7% to 10%. Additionally, operating margin expansion of around 50 bps is anticipated, and adjusted free cash flow is expected to reach $1.3 billion.
