Tapestry Q4 2026 earnings: Coach strength beats estimates, but outlook disappoints
Tapestry beat Q4 2026 profit and sales estimates on strong Coach growth, but shares dropped after fiscal 2027 revenue guidance fell short and Kate Spade's turnaround lagged.
| Q4 2026 | Reported | Expected | Surprise |
|---|---|---|---|
| EPS | $1.32 | $1.30 | +1.8% |
| Revenue | $1.88B | $1.89B | -0.9% |
Key takeaways
- Both profit and revenue for the quarter came in slightly ahead of what Wall Street analysts had penciled in, continuing a run of beats for the company.
- Coach, the company’s largest and most profitable brand, grew sales 14% for the quarter, with especially strong gains in China (up 28%) and Europe (up 19%), showing the brand’s turnaround is resonating well beyond North America.
- Kate Spade, Tapestry’s smaller brand, continued to struggle: sales fell about 7% and the CEO acknowledged its recovery is taking longer than planned, widening the performance gap between the two brands.
- The TTM gross margin sits above 76%, and management said the quarter’s margin expansion came mostly from operational improvements (cost control and pricing) rather than one-off items, meaning more of each sales dollar is being kept as profit before overhead costs.
- A TTM return on equity above 100% mainly reflects a balance sheet with relatively little equity outstanding (after past share buybacks) rather than an unusually large profit pool, so it should be read alongside the more standard operating and net margins rather than in isolation.
- Management said Tapestry hit the sales, margin and profit targets it had laid out at its investor day two years ahead of the original schedule.
- For the new fiscal year (2027), the company guided to revenue of $8.4-8.5 billion and adjusted earnings per share of $7.80-$7.90, and said it plans to return about $1.7 billion to shareholders through buybacks and dividends.
- Despite the quarterly beat, shares fell sharply after the report because the new full-year revenue guidance came in slightly below what analysts had expected, and investors focused on the ongoing Kate Spade weakness.
Q4 2026 in context
| Metric | Jun 2026 | Jun 2025 | Change |
|---|---|---|---|
| Revenue | $1.9B | $1.7B | +8.9% |
| Net income | $348M | -$517M | +167.3% |
| Free cash flow | $469M | $412M | +14.0% |
| Gross margin | 83.3% | 76.3% | +7.0 pts |
| Operating margin | 23.6% | -33.9% | +57.4 pts |
| Net margin | 18.5% | -30.0% | +48.5 pts |
Figures for the quarter ended Jun 2026 and the quarter ended Jun 2025, as reported to the SEC. Fourth-quarter flows are derived as the fiscal year minus its first three quarters.
How the stock took it
Tapestry Inc closed at $153.74 on Aug 12, 2026, the last session before the report, and at $128.98 on Aug 14, 2026, the first session after it — -16.1% across the report.
Closes from the market's daily record. Each figure spans the report date — from the last session that closed before it to the first that closed after — because a company may report before the open or after the close.
Fundamentals
| Metric | Value | Period |
|---|---|---|
| Gross margin | 76.2% | Trailing 12 months |
| Operating margin | 11.3% | Trailing 12 months |
| Net profit margin | 8.4% | Trailing 12 months |
| Pretax margin | 10.7% | Trailing 12 months |
| EPS | $3.12 | Trailing 12 months |
| Revenue growth (YoY) | 14.1% | Trailing 12 months |
| EPS growth (YoY) | -17.8% | Trailing 12 months |
| Return on equity | 106.4% | Trailing 12 months |
Sources: company report · earnings call · publication