After surprisingly strong quarterly figures: Tapestry raises annual forecasts

The US fashion group Tapestry Inc. was able to achieve strong sales and profit growth in the third quarter of the 2025/26 financial year thanks to strong results from its core brand Coach. Management then raised its annual forecasts on Thursday.

In the most recent quarter ended March 28, consolidated revenue was $1.92 billion (§1.63 billion). This corresponded to an increase of 21 percent compared to the same period last year. Adjusted for exchange rate changes, revenue grew by 19 percent. On a pro forma basis – i.e. without the contributions of the Stuart Weitzman brand, which was sold last August – sales even increased by 25 percent (+23 percent adjusted for currency effects).

The core Coach brand achieved a sales increase of 31 percent

The growth driver was the Coach brand, whose sales rose by 31 percent (currency-adjusted +29 percent) to $1.70 billion. Kate Spade, on the other hand, suffered a decline of ten percent (-11 percent adjusted for currency effects) to $219.6 million.

According to its own information, Tapestry was able to acquire over 2.4 million new customers worldwide in the third quarter. Notably, Generation Z made up over 35 percent of this new cohort. This demographic shift was accompanied by strong results in the leather goods category, particularly Coach. The brand’s handbag sales rose more than 20 percent.

Almost all market regions contributed to the strong growth. On a pro forma basis, revenues in North America increased by 20 percent to $1.10 billion, in Greater China by 61 percent (+55 percent at constant currencies) to $432.2 million and in Europe by 31 percent (+21 percent at constant currencies) to $118.6 million.

Only in Japan did the group suffer a decline of ten percent to $123.9 million. Sales in the smaller Asian markets amounted to 116.3 million US dollars, increasing by 24 percent on a pro forma basis (+16 percent adjusted for currency effects).

Quarterly profit increases by 69 percent

Thanks to the separation from Stuart Weitzman and improvements in operations, gross margin increased 80 basis points to 76.9 percent despite higher tariffs. The operating result rose by 68.5 percent to 427.5 million US dollars. Net profit amounted to 343.8 million US dollars (292.1 million euros), exceeding the level of the previous year’s quarter by 69 percent.

In view of the unexpectedly strong figures, which CEO Joanne Crevoiserat attributed to the effects of the “Amplify” reform program, management increased its forecasts for the full year. It now expects sales in the range of $7.95 billion, which would represent an increase of about 14 percent compared to last year. Previously, only $7.75 billion had been promised.

The guidance for diluted earnings per share, adjusted for special items, which had previously been between $6.40 and $6.45, was raised to $6.95. This would correspond to growth of more than 35 percent year-on-year.