Tapestry beats forecasts as Coach sales rise 16% and outlook climbs

Tapestry opened its financial year with first-quarter sales of $1.9 billion, a gain of 12 percent that cleared the $1.85 billion analysts were looking for. Net income grew 30.9 percent to $360 million, or $1.76 a diluted share, for the quarter ended 26 September.

Adjusted earnings ran to $1.82 a share, comfortably ahead of the $1.56 analysts forecast. The figures exclude Stuart Weitzman, spun off to Caleres last year, so the growth is entirely the work of the brands the company chose to keep.

Coach supplied almost all of it. Sales at the house leapt 16 percent to $1.7 billion, while Kate Spade, still retrenching in order to regrow from a stronger base, fell 10 percent to $233 million, the counterweight to Coach's momentum. The gap between the two says a lot about where Tapestry's momentum is.

In North America, its largest market, Coach sales rose 7 percent, backed by growth of 30 percent internationally. Average unit retail prices on Coach handbags climbed at low-double-digit rates through the quarter, and the company drew in 2.6 million new customers.

Thirty-five percent of those new buyers came from Gen Z, which chief executive Joanne Crevoiserat said is precisely where the house is aiming. "We see an opportunity to welcome more customers into the category," she told WWD, holding up Coach's founding as the model.

The formula, as she put it, is to "earn the right" to be Gen Z's "first luxury bag purchase." Spending by existing customers also rose during the quarter, so the brand is adding new buyers without leaning on discounts to keep the ones it has.

The results build on an already strong prior year. Coach took in $6.9 billion in sales last year, and Crevoiserat said the $10 billion mark is now in sight, with room beyond it. Her phrase for the trajectory is "compounding growth": expansion stacked on expansion.

The outlook moves higher

Tapestry nudged its full-year guidance upward. Revenue is now expected to rise 6 to 7 percent, landing between $8.5 billion and $8.6 billion, a range the company lifted by $100 million from its initial forecast. That follows sales of nearly $8 billion last year.

Last year's result represented a 17 percent expansion, adjusted for currency and for Stuart Weitzman, so the new target slows the rate while still moving the number up. Crevoiserat framed it as growth delivered on top of growth, not a break from it.

The strategy behind the figures is called Amplify, a three-year plan Tapestry laid out last year and whose revenue targets it hit in year one. Crevoiserat argues the capabilities and culture it is building are durable advantages, not a one-quarter spike.

Amplify runs on four tasks, and the chief executive's framing is blunt about what matters. Growth is coming through the direct business, through new customer acquisition and through core leather goods, delivered in North America and around the world.

She sees the total addressable market as enormous, with room to grow share in North America and in international markets where the company remains comparatively underpenetrated. The 30 percent international jump at Coach suggests that runway is already opening.

The conglomerate behind the beat

Tapestry's results matter beyond the quarter because of how the group is built. In our map of the second-tier conglomerates beyond LVMH, Kering and Richemont, we placed Tapestry among the houses that dominate a category rather than a breadth of them.

That category is accessible leather goods, and the risk we flagged is exactly what these results display: Tapestry leans on Coach to the point that its whole outlook moves on one brand's performance.

The balance sheet is the other part of the story. Tapestry's planned $8.5 billion merger with Capri Holdings collapsed in November 2024 after the US FTC blocked it in court, leaving a company that had to grow on its own terms under the Amplify plan.

That context makes the beat more telling. With the Capri deal dead and Stuart Weitzman sold, the group's future rests on Coach scaling toward $10 billion while Kate Spade rebuilds. The first quarter shows the first half of that equation working.

What comes next is written into the guidance itself.

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This briefing is published daily using an AI-powered system crafted by Worthbury's team and finely tuned to meet our editorial standards. While we continuously test and review the output, mistakes can sometimes happen. Tell us if you spot one.

Image: Courtesy of Coach