Tapestry raises full-year guidance following robust Q3 results

US luxury group Tapestry, the parent company of Coach and Kate Spade New York, reported a significant increase in revenue and earnings for the fiscal third quarter ended March 28, 2026. The group achieved double-digit growth across its core brands, bolstered by a 21 percent increase in net sales to 1.92 billion dollars.

The performance has led the group to revise its annual guidance upwards, now expecting revenue in the area of 7.95 billion dollars. This trajectory reflects the impact of the Amplify strategy, which focuses on digital acceleration and consumer engagement.

Global demand fuels leathergoods performance

The fiscal third quarter saw Tapestry acquire over 2.4 million new customers globally. Notably, Gen Z consumers represented over 35 percent of this new cohort. This demographic shift was accompanied by a robust performance in the leathergoods category, particularly at Coach. Handbag units for the brand rose more than 20 percent, while average unit retail (AUR) increased at a low-double-digit rate.

Geographic expansion remained a key driver of the quarter’s results. On a pro forma constant currency basis, North America saw gains of 20 percent, while Europe increased by 21 percent. The Asia-Pacific (APAC) region recorded a 30 percent rise, with Greater China specifically growing by 55 percent.

Direct-to-consumer and digital acceleration

Total direct-to-consumer (D2C) revenue increased by 23 percent on a pro forma constant currency basis. This growth was spearheaded by a 25 percent rise in digital sales and a 20 percent increase in global brick and mortar sales.

Tapestry chief executive officer, Joanne Crevoiserat, attributed the results to disciplined execution. “Our third quarter outperformance reflects the compounding benefits of our Amplify strategy, as we bring creativity, craftsmanship, and value to more consumers around the world,” Crevoiserat stated.

Financial results and margin expansion

Gross profit reached 1.48 billion dollars with a gross margin of 76.9 percent, an 80 basis point increase compared to the previous year. Operating income on a non-GAAP basis was 430 million dollars, resulting in an operating margin of 22.4 percent. This represents a significant expansion from the 17.5 percent margin reported in the prior year.

Net income for the period was 344 million dollars, with earnings per diluted share (EPS) of 1.65 dollars on a GAAP basis. On a year-over-year (YoY) basis, this is a substantial increase from the 203 million dollars in net income recorded in the same period last year.

Shareholder returns and updated guidance

Based on current momentum, Tapestry expects to return 1.6 billion dollars to shareholders in fiscal 2026 through dividends and share repurchases. The board of directors declared a quarterly cash dividend of 0.40 dollars per common share, payable on June 22, 2026. The group also expects to buy back approximately 1.3 billion dollars in common stock over the fiscal year.

For the full fiscal year 2026, Tapestry anticipates an operating margin of approximately 23 percent, which is an expansion of roughly 300 basis points YoY. The group projects EPS to be in the area of 6.95 dollars, representing growth of over 35 percent compared to the previous fiscal year.