NEW YORK, August 14, 2026, 06:13 EDT — U.S. premarket activity was high as the regular session remained shut.
- Tapestry shares dropped by up to 16.9% even after posting better-than-expected earnings.
- Coach accounted for about 87% of sales in the quarter, while Kate Spade sales dropped 7%.
- Revenue guidance for fiscal 2027 was close to market expectations.
Shares of Tapestry, Inc. NYSE:TPR dropped up to 16.9% on Thursday. The parent company of Coach and Kate Spade surpassed quarterly profit expectations, but investors reacted negatively to its reliance on a single brand.
Coach accounted for approximately $1.64 billion of Tapestry’s $1.88 billion in sales for the quarter, making up nearly 87% of overall revenues. Kate Spade added around $240 million, continuing its downward trend.
| Fiscal Q4 measure | Result | Year earlier | Street benchmark |
|---|---|---|---|
| Revenue | $1.88 billion | $1.72 billion | $1.87–$1.88 billion |
| Adjusted EPS | $1.32 | $1.04 | $1.28 |
| Coach sales | Near $1.64 billion | Near $1.43 billion | 15.5% growth expected |
| Kate Spade sales | Roughly $240 million | Roughly $258 million | — |
The sales breakdown highlights the response. Coach delivered 14% growth at constant currency, which remains the main driver for the company. Kate Spade declined by 7%, providing no support in the event Coach’s momentum eases.
| Brand concentration | Q4 FY2026 sales | Share of Tapestry sales | Year-over-year growth |
|---|---|---|---|
| Coach | Approximately $1.64 billion | 87.2% | Up 14% in constant currency |
| Kate Spade | Approximately $0.24 billion | 12.8% | Down 7% in constant currency |
| Tapestry | $1.88 billion | 100% | Increase of 8.9% reported |
Coach came in just short of a closely watched target. Sales increased by 15% as reported, slightly under the anticipated 15.5%. The shortfall was marginal. The stock’s decline indicated very limited tolerance for slowing momentum.
Growth across regions slowed as well. North American revenue increased by 7% at constant currency, down from nearly 20% in the previous quarter. Revenue in China climbed 28%, while Europe saw 19% growth.
| Fiscal 2027 projection | Company estimates | Midpoint value | Analyst consensus | Midpoint difference |
|---|---|---|---|---|
| Revenue | $8.40–$8.50 billion | $8.45 billion | $8.46 billion | -0.1% |
| Adjusted EPS | $7.80–$7.90 | $7.85 | $7.84 | +0.1% |
| Quarterly dividend | $0.4625 | — | Previous: $0.40 | +15.6% |
| Planned buybacks | $1.35 billion | — | — | — |
The guidance did not represent a significant miss on numbers. Midpoint revenue came in just $10 million under consensus forecasts. Adjusted EPS came in marginally ahead of estimates. Management anticipates mid-single-digit growth in the latter half.
Neil Saunders, Managing Director at GlobalData, stated that investors are seeking “multiple levers for growth.” He highlighted the importance of accelerating Kate Spade’s recovery. Last month, the brand appointed Jonathan Saunders as creative director. Reuters
| Analyst recommendation | Rating | Price target | Last verified |
|---|---|---|---|
| Barclays | Overweight | $182 | July 16, 2026 |
| Morgan Stanley | Overweight | $164 | July 6, 2026 |
| Argus | Buy | $165 | March 12, 2026 |
| UBS | Neutral | $123 | January 8, 2026 |
| 22-analyst consensus | Buy | $167.15 average | Late July 2026 |
Paul Lejuez, an analyst at Citi, pointed to one optimistic indication. Tapestry projects Coach will grow at a low-teens rate this quarter. He described this as “a positive sign about the momentum of the brand.” The Wall Street Journal
The balance sheet continues to benefit shareholders. Tapestry increased its quarterly dividend by 16% and intends to repurchase $1.35 billion in shares. However, those shareholder returns failed to ease worries over the growth mix.
Third-quarter figures raised expectations, with revenue increasing by 21% and Coach sales surging 31%. In contrast, Kate Spade sales declined 10%. The most recent quarter thus reflected a marked slowdown from that previous momentum.
Risks: Fashion trends can shift rapidly. Outlook could face pressure if U.S. consumer spending slows, tariffs are adjusted, or Coach sees reduced momentum. Turning around Kate Spade might also necessitate increased marketing spend.
Investors are advised to monitor Coach’s expansion and the trajectory of Kate Spade’s sales going forward. The earnings outlook appears sufficient. Brand concentration remains the more challenging factor.
