Tapestry achieved record quarterly revenue, operating profit, and earnings per share, exceeding expectations.

Tapestry, Inc. (NYSE: TPR), a house of iconic accessories and lifestyle brands, today reported results for the fiscal second quarter ended December 27, 2025.

Joanne Crevoiserat, Chief Executive Officer of Tapestry, Inc., commented:

"Our second quarter outperformance reflects the compounding impact of our Amplify strategy, driving deeper consumer engagement, accelerated growth, and record results. This holiday season, our talented teams brought creativity, craftsmanship, and value to consumers around the world, building new and lasting connections that fuel enduring brand desire and demand. As we move forward, we do so with momentum and confidence. By harnessing our proven strategies and structural advantages, we are raising our outlook for the fiscal year, reinforcing our commitment to driving durable growth and long-term value creation."

Tapestry, Inc. Fiscal 2026 Second Quarter Strategic Highlights

Tapestry advanced its Amplify growth strategy, which is focused on four key pillars:

Build Emotional Connection with Consumers

Fuel Fashion Innovation and Product Excellence

Deliver Compelling Experiences to Drive Global Growth

Ignite the Power of our People

Highlights from the fiscal second quarter included:

Acquired over 3.7 million new customers globally, led by a growing number of Gen Z consumers versus prior year, which represented approximately one-third of new customers; further, demand from existing customers also increased, reflecting broad-based traction across the business;

Accelerated growth in core leathergoods offering, led by strong handbag revenue gains at Coach, where handbag AUR and units each increased at a mid-teens percentage rate, contributing approximately equally to topline momentum, reflecting compelling innovation across the assortment and diversified drivers of growth;

Drove growth across key markets, outperforming expectations, highlighted by pro forma constant currency gains in North America (+17%), Europe (+22%), and total APAC (+18%), including Greater China (+34%); fueled Coach brand growth of 25% in the quarter;

Increased total direct-to-consumer revenue by 17% on a pro forma basis, led by strong digital growth of approximately 20% and mid-teens percentage growth in global brick and mortar sales; expanded profitability across channels by uniting the creativity and consumer-led mindset of our teams with disciplined execution and data-driven insights.

Shareholder Return Programs

Given Tapestry's strong operational results, robust balance sheet, significant free cash flow generation, and outlook for growth, the Company now expects to return $1.5 billion, which is approximately 100 percent of its anticipated adjusted free cash flow, to shareholders through dividends and share repurchases in Fiscal 2026. This represents an increase from its previous outlook of $1.3 billion. Programs include:

Dividend: The Company's Board of Directors declared a quarterly cash dividend of $0.40 per common share payable on March 23, 2026 to shareholders of record as of the close of business on March 6, 2026. In Fiscal 2026, the Company continues to anticipate an annual dividend of $1.60 per share.

Share Repurchases: Tapestry now expects to buy back approximately $1.2 billion in common stock in Fiscal 2026 under the Company's existing stock repurchase authorization, an increase from its prior outlook of $1.0 billion. During the fiscal second quarter, the Company spent $400 million to repurchase approximately 3.6 million shares of its common stock at an average cost of approximately $112 per share. On a year-to-date basis through the fiscal second quarter, the Company spent a total of $900 million to repurchase approximately 8.3 million shares at an average share price of approximately $109.

Non-GAAP Reconciliation

During the fiscal second quarter of 2026, Tapestry recorded certain items that decreased the Company's operating income by $3 million, net income by $3 million, and earnings per diluted share by $0.01.

Please note that the divestiture of Stuart Weitzman was completed on August 4, 2025. The brand's results for the period under ownership in Fiscal 2026 are included in fiscal 2026 first quarter GAAP and year-to-date results and excluded from year-to-date non-GAAP results.

Please refer to the Financial Schedules included herein for a full reconciliation of the Company's reported GAAP to non-GAAP results.

Overview of Fiscal 2026 Second Quarter Financial Results

Net sales totaled $2.50 billion, representing 14% growth versus prior year on a nominal basis and constant currency basis. Excluding the impact of Stuart Weitzman, pro forma net sales growth was 18% on a nominal basis and constant currency basis. FX represented a tailwind of approximately 10 basis points in the quarter due to the depreciation of the U.S. Dollar.

Gross profit totaled $1.89 billion, while gross margin was 75.5%. This compared to prior year gross profit of $1.63 billion, representing a gross margin of 74.4%. The 110 basis point increase in gross margin was driven by operational improvements of approximately 250 basis points as well as a favorable impact from the divestiture of Stuart Weitzman of 50 basis points, partially offset by a negative tariff and duty impact of 190 basis points.

SG&A expenses totaled $1.17 billion and represented 46.8% of sales on a GAAP basis. On a non-GAAP basis, SG&A expenses totaled $1.17 billion and represented 46.7% of sales. In the prior year period, SG&A expenses totaled $1.14 billion and represented 51.9% of sales on a GAAP basis and totaled $1.08 billion and represented 49.4% of sales on a non-GAAP basis.

Operating income was $716 million on a GAAP basis, while operating margin was 28.6%. On a non-GAAP basis, operating income was $720 million, while operating margin was 28.8%. This compared to the prior year GAAP operating income of $493 million and an operating margin of 22.4% and non-GAAP operating income of $548 million and an operating margin of 24.9%. The 390 basis point increase in non-GAAP operating margin included a 90 basis point favorable impact from the divestiture of Stuart Weitzman.

Net interest expense was $17 million versus prior year net interest expense of $25 million on a GAAP basis and $2 million on a non-GAAP basis.

Other expense was $2 million versus $3 million in the prior year.

Net income was $561 million, with earnings per diluted share of $2.68 on a GAAP basis. On a non-GAAP basis, net income was $565 million, with earnings per diluted share of $2.69. In the prior year period, net income was $310 million, with earnings per diluted share of $1.38 on a GAAP basis. On a non-GAAP basis, net income in the prior year was $450 million, with earnings per diluted share of $2.00. The tax rate for the quarter was 19.5% on a GAAP basis and 19.4% on a non-GAAP basis. In the prior year, the tax rate was 10.1% on a GAAP basis and 17.1% on a non-GAAP basis.

Balance Sheet and Cash Flow Highlights

Cash, cash equivalents and short-term investments totaled $1.08 billion and total borrowings outstanding were $2.40 billion. The Company's leverage ratio, based on gross debt to adjusted EBITDA, was 1.2x as of the end of the fiscal quarter.

Inventory was $896 million as of the end of the fiscal quarter versus ending inventory of $937 million in the prior year period.

Cash flow from operating activities for the second fiscal quarter was an inflow of $1.08 billion compared to an inflow of $506 million in the prior year. On a year-to-date basis, cash flow from operating activities was an inflow of $1.19 billion compared to an inflow of $626 million in the prior year. Adjusted free cash flow for the second fiscal quarter was an inflow of $1.04 billion compared to an inflow of $772 million in the prior year. On a year-to-date basis, adjusted free cash flow was an inflow of $1.14 billion compared to an inflow of approximately $813 million in the prior year.

CapEx and implementation costs related to Cloud Computing for the second fiscal quarter were $54 million versus $39 million a year ago. On a year-to-date basis, CapEx and implementation costs related to Cloud Computing were $92 million versus $69 million a year ago.

Financial Outlook

Tapestry is raising its Fiscal 2026 outlook, which is provided on a non-GAAP basis:

Revenue of over $7.75 billion, representing approximately 11% growth versus prior year on a reported basis; excluding Stuart Weitzman, pro forma revenue is expected to grow approximately 15% on a nominal basis and increase 14% in constant currency. Foreign currency is expected to be a 70-basis point tailwind to topline results in the fiscal year. This is ahead of prior guidance for revenue to be in the area of $7.3 billion and increase 7% to 8% on a pro forma, nominal basis;

Operating margin expansion of approximately 180 basis points versus prior year, compared to previous guidance for an increase in the area of 50 basis points versus prior year. Based on the strength of the underlying business, the Company expects to more than offset a negative tariff and duty headwind of nearly 200 basis points, resulting in both gross margin expansion and SG&A leverage anticipated for Fiscal 2026;

Net interest expense of approximately $65 million, unchanged from prior guidance;

Tax rate of approximately 17% compared to prior guidance of approximately 18%;

Weighted average diluted share count of approximately 211 million shares versus prior guidance of 212 million shares;

Earnings per diluted share of $6.40 to $6.45, representing growth over 25% compared to prior year, and exceeding previous guidance of $5.45 to $5.60;

Adjusted free cash flow in the area of $1.5 billion, exceeding prior guidance of $1.3 billion.

Please note this outlook:

Embeds U.S. trade and tax policies as of February 1, 2026, including the impact of OECD's Pillar Two guidance;

Includes foreign currency exchange rates using spot rates at the time of forecast;

Assumes no material worsening of inflationary pressures or consumer confidence;

Excludes one-time costs associated with the sale of Stuart Weitzman, which closed on August 4, 2025, as well as the brand's results for the period under ownership in Fiscal 2026. The exclusion of Stuart Weitzman is expected to be immaterial to operating profit and earnings per diluted share in the fiscal year; and

Excludes non-recurring costs associated with the Company's organizational efficiency efforts.

Given the dynamic nature of these and other external factors, financial results could differ materially from the outlook provided.

Financial Outlook - Non-GAAP Adjustments:

The Company is not able to provide a full reconciliation of the non-GAAP financial measures to GAAP presented in this release and on the Company's conference call because certain material items that impact these measures have not yet occurred and cannot be reasonably estimated at this time. Accordingly, a reconciliation of the Company's non-GAAP financial measure guidance to the corresponding GAAP measure is not available without unreasonable effort.

Conference Call Details

The Company will host a conference call to review these results at 8:00 a.m. (ET) today, February 5, 2026. 

http://www.datamonitor.com
Republication or redistribution, including by framing or similar means,
is expressly prohibited without prior written consent. Datamonitor shall 
not be liable for errors or delays in the content, or for any actions 
taken in reliance thereon
COMTEX_473548311/2227/2026-02-14T18:36:00