Tapestry, Inc. Reports Fiscal 2026 First Quarter Results and Raises Full Year Outlook

Core Insights - Tapestry, Inc. reported record first quarter revenue and earnings per share (EPS) for fiscal 2026, exceeding expectations and prompting an increase in the full-year outlook [1][3][5] Financial Performance - Net sales reached $1.704 billion, a 13% increase from the previous year, with a 12% increase on a constant currency basis [4][5] - Pro forma net sales, excluding Stuart Weitzman, totaled $1.690 billion, reflecting a 16% growth [4][7] - Gross profit was $1.301 billion, with a gross margin of 76.3%, up from 75.3% in the prior year [4][13] - Operating income increased by 30% to $328 million, with an operating margin of 19.3% [4][13] - GAAP diluted EPS rose 61% to $1.28, while non-GAAP diluted EPS increased by 35% to $1.38 [5][6] Brand Performance - The Coach brand led growth with a 22% increase in revenue, while Kate Spade experienced an 8% decline [7][32] - North America saw an 18% increase in sales, with Europe achieving a 39% growth [8][7] Strategic Initiatives - Tapestry's Amplify Growth Strategy focuses on building emotional connections with consumers, fueling fashion innovation, delivering compelling experiences, and empowering employees [8] - The company acquired over 2.2 million new customers, with approximately 35% being Gen Z consumers [8] Shareholder Returns - Tapestry plans to return $1.3 billion to shareholders in fiscal 2026 through dividends and share repurchases [5][9] - The quarterly cash dividend declared is $0.40 per share, with an annual dividend expectation of $1.60 per share [12] Financial Outlook - The company raised its fiscal 2026 revenue and earnings outlook, anticipating revenue of approximately $7.3 billion, representing 4% to 5% growth [16][18] - Expected adjusted free cash flow for fiscal 2026 is $1.3 billion, with a net interest expense of approximately $65 million [16][18]