New York, Feb 5, 2026, 14:40 ET — Regular session
- Tapestry shares jumped roughly 11% following the company’s upbeat holiday-quarter results and a boost to its full-year guidance
- Coach revenue surges 25%, boosted by Tabby handbags; Kate Spade sales slip once more
- Traders eye tariff tensions, brand momentum, and the upcoming earnings report
Tapestry Inc’s shares jumped roughly 11% Thursday afternoon, buoyed by the Coach owner raising its full-year outlook after a robust holiday quarter. The stock climbed $14.57 to $144.49, having reached $145.40 earlier in the day.
This shift is significant now as handbags serve as a key indicator of pricing power in discretionary retail, particularly among affluent consumers. When an “affordable luxury” brand posts a clear beat, it can quickly draw capital back into the sector.
Investors are zeroing in on companies that can expand without relying heavily on deep discounts, especially as tariffs and promotions muddle retail earnings. Tapestry delivered a straightforward message: demand stayed strong, margins got better, and guidance was raised.
Tapestry reported a 14% jump in net sales for its fiscal second quarter, reaching $2.50 billion. Adjusted earnings came in at $2.69 per share. The company’s gross margin widened to 75.5%, with adjusted operating margin—meaning the portion of sales remaining after operating expenses—hitting 28.8%. Adjusted figures exclude one-time items. For reference, a basis point equals one-hundredth of a percentage point.
Affluent Gen Z shoppers have driven strong demand for Coach’s Tabby handbags, priced from $295 to $725, pushing the brand’s revenue up 25% to $2.14 billion and outpacing competitors like Capri-owned Michael Kors, according to LSEG data. Simeon Siegel, an analyst at Guggenheim Securities, praised Coach for “doing a remarkable job” convincing consumers to accept higher prices. CEO Joanne Crevoiserat said the company aims to grow Coach into a “$10 billion brand,” citing a roughly 40% boost in marketing spend. Meanwhile, Kate Spade’s sales dropped 14% this quarter, deepening a 13-quarter slump. Tapestry also flagged challenges from tariffs and the end of the U.S. “de minimis” duty exemption on low-value shipments. (Reuters)
Yet, the rally hinges largely on one brand staying strong. Should Coach demand slip or Kate Spade require steeper discounts to move inventory, the margin story could unravel fast—especially if trade policies tighten once more.
Tapestry reported that tariffs and duties cut gross margin by about 190 basis points this quarter. For the full year, it anticipates a roughly 200-basis-point drag but aims to more than offset that through price hikes and cost-cutting measures. Investors will be keeping an eye on how well that strategy works as the company increasingly sources from countries like India, Vietnam, and Cambodia, which face high U.S. tariffs.
Tapestry’s shares surged even as Wall Street dipped on a tech-driven selloff, sparked by jitters over Alphabet’s spending outlook and Qualcomm’s guidance. Investors also braced for Amazon’s earnings, due after the close. (Reuters)
Tapestry is projecting fiscal 2026 revenue to top $7.75 billion, with adjusted EPS between $6.40 and $6.45. The company also boosted its expected shareholder returns to $1.5 billion via dividends and buybacks, around $1.2 billion of which will come from repurchases. Investors are eyeing March 6, the record date for its $0.40 quarterly dividend, and the third-quarter results set for May 7.
