Tapestry Forecast Positive Annual Profit as Coach Sales Rise

Tapestry closed fiscal 2026 by beating on both revenue and earnings, driven almost entirely by Coach. Coach revenue rose 14% in the fourth quarter and 23% for the full year, helped by mid-teens handbag price increases that lifted average unit retail without meaningfully denting demand. Fourth-quarter revenue came in at $1.88 billion, ahead of FactSet expectations.

The other half of the portfolio is not working. Kate Spade revenue fell 7% in the fourth quarter, and management has not put a timeline on the turnaround. That gap is why the beat did not translate cleanly into a share gain: consolidated results are carrying more weight than the top-line number alone suggests.

Tapestry raised its quarterly dividend 16% after returning $1.7 billion to shareholders in fiscal 2026. For fiscal 2027 the company guided non-GAAP earnings per share of $7.80 to $7.90 on revenue of $8.4 billion to $8.5 billion, with roughly 50 basis points of operating margin expansion.

The thesis for TPR now rests on whether Coach's pricing power holds. Mid-teens price increases absorbed without volume loss is the single most important datapoint in this print, because it is what funds the margin expansion in the fiscal 2027 guide. If younger-shopper demand for Coach cools while Kate Spade is still declining, there is no second engine to offset it.

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