NEW YORK, August 13, 2026, 11:13 EDT — U.S. stock markets were trading.
- Tapestry’s stock dropped 15.2% to $130.40 following its fiscal fourth-quarter earnings report.
- The drop wiped out about $4.86 billion in market value, roughly 2.6 times the adjusted free cash flow projected for fiscal 2026.
- Coach reported a 15% increase in sales, missing consensus by half a percentage point, as Kate Spade sales declined 7%.
Tapestry Inc. NYSE:TPR fell 15.2% on Thursday, even after topping earnings estimates. Shares of the Coach and Kate Spade parent were at $130.40 at around 10:58 EDT, with trading volume above 3.6 million shares.
The selloff wiped roughly $4.86 billion from Tapestry’s market capitalization. That initial figure is 2.6 times higher than the $1.86 billion in adjusted free cash flow projected for fiscal 2026. As a result, the market’s response appears to outweigh the shortfall in headline guidance.
Concentration intensified the pressure. Coach accounted for 87.5% of revenue in the fourth quarter. The brand posted 15% sales growth, falling short of the 15.5% consensus by just half a point. Kate Spade saw another decline, leaving investors dependent on a single major growth driver.
| Fourth-quarter measure | Result | Year earlier | Change or benchmark |
|---|---|---|---|
| Net sales | $1.877 billion | $1.723 billion | Up 9% |
| Adjusted EPS | $1.32 | $1.04 | Consensus at $1.28 |
| Adjusted gross margin | 78.1% | 76.3% | Increase of 180 basis points |
| Adjusted operating margin | 19.3% | 16.8% | Up 250 basis points |
Adjusted EPS for the quarter topped consensus by 3.1%. Revenue increased 8.9%, largely in line with forecasts. Gross margin expanded despite a 60-basis-point impact from tariffs.
Chief Executive Joanne Crevoiserat stated the company’s advantages “enable us to deliver creativity, value, and relevance at scale.” Tapestry gained 2.5 million new customers in the quarter, with approximately 35% of them being Gen Z.
| Brand | Q4 sales | Reported growth | Constant-currency growth | Share of group sales |
|---|---|---|---|---|
| Coach | $1.642 billion | up 15% | up 14% | 87.5% |
| Kate Spade | $235.1 million | down 7% | down 7% | 12.5% |
| Tapestry pro forma | $1.877 billion | up 12% | up 11% | 100% |
Brand risk was mitigated by geographic diversity. Revenue in Greater China increased by 28% at constant currencies. Europe saw a 19% rise, and North America grew by 7%. Meanwhile, Japan fell by 4%.
Kate Spade is still the main brand requiring a fix. The company named Jonathan Saunders as creative director in July. GlobalData Managing Director Neil Saunders noted that investors are seeking a quicker recovery and evidence that Tapestry has “multiple levers for growth.” Reuters
| Fiscal-2027 outlook | Company range | Midpoint | Street benchmark |
|---|---|---|---|
| Revenue | $8.4–$8.5 billion | $8.45 billion | $8.46 billion |
| Adjusted EPS | $7.80–$7.90 | $7.85 | $7.84 |
| Adjusted operating margin | Roughly 50 basis points increase | Near 23.9% | Not reported |
| Adjusted free cash flow | Nearing $1.7 billion | — | — |
| Q1 revenue growth | Upper single digits | — | — |
Revenue guidance closely matched consensus expectations, with the midpoint falling short of the $8.46 billion forecast by $10 million, representing a 0.1% difference. EPS guidance slightly surpassed the $7.84 consensus. As a result, the timing of the slowdown now carries more weight than its magnitude.
Management anticipates revenue growth in the high-single-digit range for the first half, with growth likely slowing to mid-single digits as the year progresses. Chief Financial Officer Scott Roe pointed to macroeconomic uncertainty and changing tariffs. Citigroup Inc. NYSE:C analyst Paul Lejuez described the projected low-teens growth for Coach this quarter as “a positive sign about the momentum of the brand.” The Wall Street Journal
| Analyst or firm | Rating | Target | Implied upside at $130.40 | Rating date |
|---|---|---|---|---|
| Telsey Advisory Group | Buy | $175 | 34.2% | Aug. 6, 2026 |
| Barclays PLC NYSE:BCS | Buy | $182 | 39.6% | July 16, 2026 |
| Morgan Stanley NYSE:MS | Buy | $164 | 25.8% | July 6, 2026 |
| UBS Group AG NYSE:UBS | Buy | $230 | 76.4% | June 23, 2026 |
| JPMorgan Chase & Co. NYSE:JPM | Buy | $205 | 57.2% | June 12, 2026 |
The overall analyst survey is positive, with 16 Buy ratings, five Hold, and one Sell. The consensus target averages $168.20, suggesting a potential gain of 29.0%. Most of these projections were set before Thursday’s update.
Tapestry shares are priced at $130.40, representing 16.6 times the midpoint estimate for fiscal-2027 EPS. Buyback plans cover around 5.0% of its present market capitalization. The latest annual dividend of $1.85 offers a yield close to 1.4%.
Dangers
Coach’s expansion might decelerate sooner than anticipated, and Kate Spade’s recovery could require more time. Margins may also feel the impact from tariffs, currency fluctuations, and declining consumer confidence. However, continued strong demand for Coach or a quicker rebound at Kate Spade could render Thursday’s valuation shift as overly sharp.
