Tapestry, Inc.

Tapestry owns Coach and Kate Spade New York, selling handbags, leather goods and other accessories through its own stores and websites, wholesale partners and licensing arrangements. It trades on the New York Stock Exchange under TPR.

Latest financial results

Current-quarter adjusted earnings exclude $15 million of distribution-network optimization costs before tax. The year-earlier adjustments concerned acquisition, divestiture and organizational-efficiency costs. The current $13 million tariff-related operating profit benefit remains in adjusted earnings.

Adjusted free cash flow deducts capital spending from operating cash flow and adjusts for specified costs and related working-capital movements. The current reconciliation includes a $109 million deduction mainly related to collecting tariff refunds.

Brands and completed divestiture

Coach revenue increased to $1.661 billion from $1.430 billion. Its adjusted operating profit rose to $590 million from $488 million. Both handbag volumes and average selling prices increased, with growth in North America and international markets.

Kate Spade revenue fell to $233 million from $260 million. Its adjusted operating result moved from a $6 million profit to a $6 million loss. The reported loss was $20 million, including distribution-network optimization costs.

Tapestry completed the Stuart Weitzman sale to Caleres on August 4, 2025, for a final $109 million. The year-earlier quarter included $15 million of Stuart Weitzman sales before closing. Excluding that business, current company revenue growth was 12%, compared with 11% on the reported basis.

Annual outlook and earlier expectations

Fiscal 2027 ends July 3, 2027, and contains 53 weeks. The following forecasts use a comparable 52-week basis, excluding the extra week.

The annual cash-flow forecast includes $300 million of capital spending and cloud-computing implementation costs. The extra week is expected to add about one percentage point to annual revenue growth, with a neutral effect on the annual operating margin.

For the second quarter, Tapestry expects 5% to 6% revenue growth at constant exchange rates and adjusted earnings of approximately $3.05 a share. First-quarter adjusted earnings of $1.82 exceeded the approximately $1.55 expected in August.

Capital returns, cash and debt

Planned fiscal 2027 buybacks increased by $350 million to $1.7 billion under the existing authorization. Including dividends, planned capital returns are approximately $2.0 billion. Tapestry spent $600 million under its repurchase program in the first quarter; total cash-flow statement repurchases were $603 million. Dividends used $92 million.

At September 26, cash and cash equivalents were $599 million and short-term investments $183 million. Total debt at balance-sheet carrying value was $2.557 billion, including $200 million of commercial paper and $397 million of notes due July 15, 2027.

The combined $2 billion revolving-credit and commercial-paper arrangements had $1.8 billion of remaining availability. The revolver matures May 22, 2030. Inventory used $222 million of quarterly cash and receivables $106 million as Coach expanded.

The company collected substantially all of its remaining tariff refunds during the quarter. Most of the profit recognition occurred in the preceding fiscal year; the current quarter included $9 million of lower inventory-related costs and $4 million of related interest reducing operating expenses.