Stock Reaction and 52-Week Context
Tapestry, Inc. (NYSE: TPR) shares jumped about 9% intraday following the release of fiscal second-quarter 2026 results, trading near the top of their 52-week range. The stock has trended upward over the past year, supported by accelerating Coach brand momentum, margin expansion and raised full-year guidance.
Record Q2 Revenue and Profit
Tapestry reported fiscal Q2 revenue of $2.50 billion, up 14% year over year on a reported basis. On a pro forma basis excluding Stuart Weitzman, revenue increased 18%. Gross profit rose to $1.89 billion, with gross margin expanding 110 basis points to 75.5%. Operating income climbed 45% to $716.4 million, while operating margin expanded 620 basis points to 28.6% on a GAAP basis. Non-GAAP operating margin was 28.8%, up 390 basis points. Net income totaled $561 million, with diluted EPS of $2.68. On a non-GAAP basis, EPS was $2.69, up 34% year over year.
Brand and Regional Performance
Coach revenue increased 25% to $2.14 billion, driven by strong leather goods demand and handbag growth. Kate Spade revenue declined 14% to $360 million. Regionally, growth was led by Greater China (+35%), North America (+17%), and Europe (+27%) on a reported basis. Direct-to-consumer revenue rose 17% pro forma, supported by digital growth of about 20%.
Cash Flow, Balance Sheet
Cash, cash equivalents and short-term investments totaled $1.08 billion, while total borrowings stood at $2.40 billion. Quarterly operating cash flow was an inflow of $1.08 billion, and adjusted free cash flow reached $1.04 billion.
Full-Year FY26 Outlook Raised
Tapestry raised fiscal 2026 guidance, now expecting:
- Revenue above $7.75 billion (11% growth reported)
- Operating margin expansion of 180 basis points
- EPS of $6.40–$6.45 (>25% growth YoY)
- Adjusted free cash flow around $1.5 billion
- The company also plans to return $1.5 billion to shareholders in FY26 via dividends and buybacks.
Year-to-Date Context
For the first six months, revenue rose to $4.21 billion, up 14% year over year, reflecting sustained brand momentum.
Analyst Actions
No analyst upgrades, downgrades, or price-target revisions were disclosed alongside the earnings release.
Summary
Tapestry delivered record Q2 revenue, profit and margins, driven by Coach strength, China acceleration and DTC growth. Raised full-year guidance and robust cash generation reinforced investor confidence, sending shares higher intraday.
