Tapestry Q2 Earnings Rise as Coach Sales Surge
Tapestry Q2 earnings topped estimates on strong Coach sales; the raise to FY2026 guidance and planned cash returns could prompt active trader positioning.
KEY TAKEAWAYS
- Revenue of $2.5B and adjusted EPS $2.69 beat Street estimates for Q2 ended Dec. 27, 2025.
- Coach revenue roughly $2.14B, up 25%, added 2.9M customers and drove the quarter.
- Raised FY2026 revenue above $7.75B, forecast $6.40-$6.45 EPS and pledged about $1.2B repurchases plus a $1.60 dividend.
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Tapestry, Inc. (TPR) reported fiscal second-quarter earnings on Feb. 5, 2026, with revenue and adjusted earnings per share surpassing estimates. The company raised its full-year 2026 guidance and outlined plans to return free cash flow to shareholders.
Quarterly Results and Margins
Tapestry said in a press release that for the quarter ended Dec. 27, 2025, revenue reached $2.50 billion, up 18% year over year, exceeding Street estimates. Adjusted earnings per share rose 34% to $2.69, also beating consensus. Operating margin expanded 390 basis points, and adjusted free cash flow exceeded $1.0 billion, reflecting improved profitability and cash generation.
This combination of higher sales and wider margins allowed management to strengthen its near-term financial position and fund shareholder returns from operating cash flow.
Brand Performance and Outlook
Coach drove most of the growth, generating about $2.14 billion in revenue, a 25% increase year over year. Gains were strongest in leather goods, footwear, and Greater China, where sales rose roughly 34%. The brand added 2.9 million customers during the quarter. Overall, Tapestry acquired 3.7 million new global customers, while Kate Spade revenue declined 14% amid a strategic repositioning.
Following the quarter, Tapestry raised its fiscal 2026 outlook, projecting revenue above $7.75 billion, representing about 14% pro-forma growth excluding a 70-basis-point foreign exchange headwind. The company expects adjusted diluted EPS between $6.40 and $6.45 and adjusted free cash flow near $1.5 billion. It anticipates modest gross-margin improvement and an operating-margin increase of about 180 basis points. Coach is forecast to grow in the high teens percentage-wise, while Kate Spade is expected to decline in the high single digits.
Tapestry committed to returning essentially all free cash flow to shareholders through approximately $1.2 billion in share repurchases and a $1.60 per-share dividend. The company attributed the raised guidance to the quarter’s outperformance, execution of its Amplify strategy, and strong demand for the Tabby handbag.
CEO Joanne Crevoiserat said, "Our second quarter outperformance reflects the compounding impact of our Amplify strategy, driving deeper consumer engagement, accelerated growth, and record results."
