01—Abstract
Summary
Summary of the 10-Q filed November 6, 2025. Cited figures are marked; the original filing is the authoritative source.
Tapestry, Inc. (TPR) reported first-quarter fiscal 2026 results for the 13 weeks ended September 27, 2025, with net sales of $1,704.6 milliona, up 13.1% or $197.1 million from $1,507.5 million a year earlier.
Coach drove the growth, with net sales up 22.1% to $1.43 billionb, while Kate Spade net sales declined 8.1% to $260.2 million. Gross margin rose to 76.3% from 75.3%, and operating income increased to $328.2 million from $252.0 million. Net income was $274.8 million, or $1.28 per diluted share, versus $0.79 a year earlier.
Excluding items affecting comparability, which the company identified as Stuart Weitzman divestiture costs and organizational efficiency costs, net income was $297.1 millionc, or $1.38 per diluted share. The balance sheet shifted toward shareholder returns and a smaller portfolio. The company completed the sale of the Stuart Weitzman Business to Caleres, Inc. on August 4, 2025, for total cash consideration of $105.0 million, and repurchased $500.0 million of common stock during the quarter under its share repurchase programs, with a further $195.7 million cash settlement completing the prior accelerated share repurchase agreement.
Cash and cash equivalents fell to $719.5 milliond from $1,100.0 million, and total stockholders' equity declined to $399.5 million from $857.8 million. Commercial paper borrowings of $240.0 million were outstanding at quarter-end under a new $2.00 billion Commercial Paper Program supported by the Amended Revolving Credit Facility, which had no borrowings outstanding. Management reported that tariffs and the removal of the de minimis exemption reduced gross margin by approximately 70 basis points in the quarter.
The company introduced its 2028 growth strategy, called Amplify, and expects fiscal 2026 capital expenditures and cloud computing costs of approximately $200.0 million. The filing also discloses two putative securities class actions related to the terminated Capri Acquisition, which the company intends to vigorously defend.
02—Key points
Key Highlights
- Net sales of $1,704.6 million, up 13.1% or $197.1 million; Coach net sales up 22.1% to $1.43 billion, while Kate Spade declined 8.1% to $260.2 million.
- Operating income rose to $328.2 million from $252.0 million; operating margin 19.3% vs. 16.7%. Excluding items affecting comparability, operating income was $353.9 million.
- Diluted EPS of $1.28 vs. $0.79 a year earlier; excluding items affecting comparability, diluted EPS was $1.38 vs. $1.02.
- Kate Spade operating income fell to $5.6 million from $27.0 million, with operating margin of 2.1% vs. 9.6%, driven by higher tariffs, unfavorable channel mix and higher marketing spend.
- Repurchased $500.0 million of common stock in the quarter; $2.74 billion remained under the 2026 Share Repurchase Program ($3.00 billion authorized September 10, 2025).
- Cash and cash equivalents decreased to $719.5 million from $1,100.0 million; total stockholders' equity fell to $399.5 million from $857.8 million; $240.0 million of commercial paper outstanding.
- Stuart Weitzman Business sold to Caleres, Inc. for $105.0 million in cash on August 4, 2025; the company also introduced its 2028 growth strategy, Amplify.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q1 FY2026, Tapestry kept $0.16.
- Revenue$1.70B100.0%
- Cost of revenue−$404.1M23.7%
- Gross profit$1.30B76.3%
- Operating costs−$972.3M57.0%
- Operating income$328.2M19.3%
- Interest, other & tax−$53.4M3.1%
- Net income$274.8M16.1%
04—Financials
Financial Highlights
Figures from 10-QQ1 FY2026filed November 6, 2025Financial Statements
Q1 FY2026 against Q1 FY2025
| Line item | Q1 FY2026Q1 FY2025 | Change |
|---|---|---|
| Revenue | $1.70B$1.51B | +13.1% |
| Cost of Revenue | $404.10M$372.60M | +8.5% |
| Gross Profit | $1.30B$1.13B | +14.6% |
| SG&A Expenses | $972.30M$882.90M | +10.1% |
| Operating Income | $328.20M$252.00M | +30.2% |
| Interest Expense | $30.10M$123.20M | −75.6% |
| Net Income | $274.80M$186.60M | +47.3% |
| EPS (Basic) | $1.32$0.81 | +63.0% |
| EPS (Diluted) | $1.28$0.79 | +62.0% |
| Shares Outstanding (Basic) | 207.60M231.50M | −10.3% |
| Shares Outstanding (Diluted) | 215.50M235.90M | −8.6% |
05—Questions
Frequently Asked Questions
How did Tapestry's sales and profitability perform in the first quarter of fiscal 2026?
Net sales rose 13.1% to $1,704.6 million, led by Coach, whose net sales increased 22.1% to $1.43 billion. Gross margin improved to 76.3% from 75.3%, and operating income increased to $328.2 million from $252.0 million. Net income was $274.8 million, or $1.28 per diluted share, compared with $0.79 a year earlier.
Why did Kate Spade results decline?
Kate Spade net sales decreased 8.1% to $260.2 million, with DTC sales down $28.1 million on lower store and e-commerce sales. Operating income fell to $5.6 million from $27.0 million. The filing attributes the margin decline mainly to higher tariffs and unfavorable channel mix in gross margin, and higher marketing spend in SG&A.
What did the company do with its capital during the quarter?
Tapestry repurchased $500.0 million of common stock, paid $83.3 million in dividends, and recorded a $195.7 million cash settlement completing the prior accelerated share repurchase agreement. It also issued $240.0 million of commercial paper, and cash and cash equivalents fell by $380.5 million over the quarter.
What is the status of the Stuart Weitzman divestiture and the Capri litigation?
The Stuart Weitzman Business was sold to Caleres, Inc. on August 4, 2025, for $105.0 million in cash, with a final pre-tax loss of $22.6 million. Separately, two putative securities class actions related to the terminated Capri Acquisition remain pending, and the company moved to dismiss the complaint on July 14, 2025 and intends to vigorously defend itself.
What did the company say about tariffs and its outlook?
Management said tariffs and the removal of the de minimis exemption negatively affected gross margin by approximately 70 basis points in the quarter, and that it expects to take actions to mitigate these costs. The company expects fiscal 2026 capital expenditures and cloud computing costs of approximately $200.0 million, and it introduced its 2028 growth strategy, Amplify.
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