Tapestry raises full-year outlook, with Coach revenue performing strongly, up 16%

Tapestry announced that it had raised its full-year 2027 revenue forecast to $8.6 billion, above the previous forecast of $8.5 billion. Diluted EPS was raised from the previous forecast of $7.80–$7.90 to $8.25–$8.35, and the company also indicated an expansion in operating margin and an increase in shareholder returns.

Coach revenue increased to $1.66 billion from $1.43 billion in the same period of the previous year. Growth in North America was 7%, including a 30% increase in international markets, while handbag AUR rose in the low teens and unit volumes increased in the low single digits. The company acquired 2.6 million new customers during the quarter, approximately 35% of whom were Gen Z.

Kate Spade revenue fell 10% to $233 million from $260 million in the same period of the previous year. The brand posted a GAAP operating loss of $20 million and a non-GAAP operating loss of $6 million. Kate Spade bore $14 million of the distribution network optimization costs related to the transition from the fulfillment center in Ohio to a third-party facility in Pennsylvania.

Revenue in Japan declined 5% on a reported basis and increased 4% on a constant-currency basis. North America generated $1.11 billion in revenue, while China, Europe and Asia maintained strong growth in other regions. China increased 43% on a reported basis and 39% on a constant-currency basis, Europe increased 20% on a reported basis, and the various Asian markets increased by 26%, among other gains.

For the second quarter, the company expects revenue growth of approximately 5–6% on a constant-currency basis and adjusted diluted EPS of approximately $3.05, representing growth in the low teens year on year.

Tapestry raised full-year shareholder returns, including share repurchases, to $2.0 billion and indicated that operating margin is expected to expand by approximately 100 basis points from the previous forecast.