Tapestry, Inc. (NYSE:TPR) reported record fiscal second-quarter results on Thursday that significantly exceeded analyst expectations, propelled by strong performance from its flagship Coach brand. The luxury accessories company’s shares rose more than 4% following the announcement.
Tapestry reported adjusted earnings of $2.69 per share for the quarter, well above analyst forecasts of $2.19 per share. Revenue climbed 14% year-on-year to $2.5 billion, surpassing consensus estimates of $2.29 billion. On a pro forma basis, excluding the divested Stuart Weitzman business, revenue increased 18% compared with the same period last year.
The Coach brand led overall growth, with sales rising 25% to $2.14 billion. The increase was driven by strong demand for handbags, supported by mid-teens percentage growth in both average selling prices and unit volumes. The strength in Coach helped offset weaker performance at Kate Spade, where revenue declined 14% to $360 million.
“Our second quarter outperformance reflects the compounding impact of our Amplify strategy, driving deeper consumer engagement, accelerated growth, and record results,” said Joanne Crevoiserat, Chief Executive Officer of Tapestry. “This holiday season, our talented teams brought creativity, craftsmanship, and value to consumers around the world.”
Profitability also improved during the quarter, with non-GAAP operating margin expanding by 390 basis points to 28.8%, supported by higher gross margins and improved operating expense efficiency. Gross margin increased by 110 basis points to 75.5%.
Regionally, Tapestry recorded broad-based growth. North America revenue rose 17%, Greater China sales increased 35%, and European revenue climbed 27% on a pro forma basis.
Following the strong results, Tapestry raised its full-year outlook. The company now expects revenue to exceed $7.75 billion, compared with its previous forecast of $7.3 billion. It also increased its earnings guidance to a range of $6.40 to $6.45 per share, up from its earlier outlook of $5.45 to $5.60 per share.
In addition, Tapestry announced plans to return approximately $1.5 billion to shareholders during fiscal 2026 through dividends and share buybacks, up from its previous target of $1.3 billion.