Tapestry Inc. (NYSE:TPR) reported first-quarter fiscal 2027 earnings and revenue above analysts’ expectations on Thursday, prompting the owner of Coach and Kate Spade to raise its full-year profit guidance.
The company’s shares gained more than 8% in premarket trading following the announcement.
Adjusted earnings reached $1.82 per share, compared with the consensus estimate of $1.56. Revenue totalled $1.9 billion, exceeding expectations of $1.85 billion and representing growth of 11% at constant currency.
Profit Margins Expand in First Quarter
Tapestry reported an adjusted gross margin of 78.7%, an increase of 220 basis points from 76.5% in the corresponding period last year.
Adjusted operating income rose 24% to $439 million.
Inventory increased 4.1% to $1.06 billion, slightly above analysts’ expectations of $1.03 billion.
“Our first quarter marked a powerful start to the year, with revenue, margin, and earnings growth ahead of expectations and strength around the world,” said Chief Executive Joanne Crevoiserat.
Fiscal 2027 Earnings Guidance Raised
Tapestry increased its full-year adjusted earnings per share forecast to $8.25–$8.35, compared with its previous guidance of $7.80–$7.90.
The revised range exceeds analysts’ consensus estimate of $7.96 per share.
The company expects fiscal 2027 revenue between $8.5 billion and $8.6 billion, compared with the consensus forecast of $8.538 billion.
For the second quarter, Tapestry projected earnings of $3.05 per share, slightly above analysts’ expectations of $3.02.
Shareholder Returns Increased to $2 Billion
Tapestry also raised its capital return plans, forecasting approximately $2 billion in distributions to shareholders during fiscal 2027.
The updated target includes approximately $700 million already returned during the first quarter.
The revised guidance follows higher quarterly revenue, expanded profit margins and increased operating income, with the company maintaining its expectations for further earnings growth during the remainder of the fiscal year.