American fashion holding company Tapestry, Inc has posted record first quarter (Q1) results for fiscal 2026 (FY26) ended September 27, 2025, surpassing market expectations and raising its full-year guidance. The company achieved revenue of $1.7 billion, up 13 per cent year-on-year (YoY) or 12 per cent in constant currency, marking its strongest first-quarter performance to date.

On a pro forma basis (excluding Stuart Weitzman), revenue rose 16 per cent to $1.69 billion, driven by a 22 per cent gain at the Coach brand. North America led regional growth with an 18 per cent constant-currency increase, while Europe surged 32 per cent and Greater China grew 19 per cent.

Tapestry, Inc has reported record Q1 FY26 results, with revenue up 13 per cent to $1.7 billion and pro forma sales (excluding Stuart Weitzman) rising 16 per cent to $1.69 billion, led by Coach’s 22 per cent surge.
Non-GAAP EPS grew 35 per cent to $1.38.
Backed by strong cash flow, the company raised FY26 guidance to $7.3 billion in revenue and $5.45-5.6 EPS.

The gross profit climbed 15 per cent to $1.3 billion, with the non-GAAP gross margin improving 120 basis points (bps) to 76.5 per cent, supported by operational efficiencies and selling, general and administrative expenses (SG&A) leverage. GAAP operating income reached $328 million, while non-GAAP operating income stood at $354 million, translating to margins of 19.3 per cent and 20.9 per cent respectively, Tapestry Inc said in a press release.

GAAP diluted earnings per share (EPS) rose 61 per cent to $1.28, and non-GAAP EPS increased 35 per cent to $1.38. Net income reached $297 million on a non-GAAP basis, reflecting disciplined execution under Tapestry’s ‘Amplify’ strategy.

Brand-wise, Coach remained the standout performer, growing 22 per cent (21 per cent in constant currency), supported by strong handbag sales and mid-teens growth in average unit retail (AUR). However, Kate Spade saw a decline of 8 per cent (9 per cent on constant currency). Direct-to-consumer (DTC) sales expanded 16 per cent, with balanced growth in digital and physical channels. Tapestry also gained over 2.2 million new customers globally, about 35 per cent of whom were Gen Z consumers.

With a robust balance sheet and strong cash generation, Tapestry plans to return $1.3 billion to shareholders in FY26. This includes a quarterly dividend of $0.4 per share (annualised at $1.60) and an expanded share repurchase target of $1 billion, up from $800 million. The company repurchased $500 million worth of shares in Q1 at an average cost of $106 per share.

The cash and short-term investments totalled $743 million, with borrowings of $2.64 billion, resulting in a leverage ratio of 1.5x. Inventory remained stable at $1.02 billion. Operating cash inflow stood at $113 million, while adjusted free cash flow improved to $103 million, supported by lower working capital and efficient cost management.

“Our first quarter outperformance marks a powerful start to our Amplify plan. With creativity, craftsmanship, and disciplined execution, we exceeded expectations across revenue and earnings. We are raising our full-year outlook with confidence in our structural advantages and our ability to deliver sustained growth and long-term shareholder value,” said Joanne Crevoiserat, CEO of Tapestry.

Tapestry raised its FY26 revenue guidance to approximately $7.3 billion, implying 4–5 per cent YoY growth, or 7–8 per cent on a pro forma basis. It now expects non-GAAP EPS between $5.45 and $5.6, representing 7–10 per cent growth. Operating margin expansion is projected at around 50 bps, while adjusted free cash flow is forecast to reach $1.3 billion.

Fibre2Fashion News Desk (SG)