01—Abstract
Summary
Summary of the 10-Q filed February 5, 2026. Cited figures are marked; the original filing is the authoritative source.
Tapestry, Inc. (TPR) reported net sales of $2.50 billiona for the second quarter of fiscal 2026 ended December 27, 2025, up 14.0% or $307.0 million from $2.20 billion a year earlier.
Coach net sales rose 25.3% to $2.14 billionb, while Kate Spade net sales fell 13.6% to $360.0 million. Stuart Weitzman, sold to Caleres, Inc. on August 4, 2025, contributed no sales in the quarter. Operating income rose $223.6 million to $716.4 million, with operating margin of 28.6% versus 22.4%.
Net income was $561.3 millionc, or $2.68 per diluted share, compared with $310.4 million, or $1.38 per diluted share, in the prior-year quarter, which included $197.6 million of pre-tax Capri Acquisition-related expenses. On a non-GAAP basis, excluding items affecting comparability, diluted EPS was $2.69 versus $2.00. The filing notes that tariffs and the removal of the de minimis exemption reduced gross margin by approximately 190 basis points in the quarter and 140 basis points for the six months.
Kate Spade's operating margin fell to 4.5% from 16.4%, driven by higher tariffs, unfavorable channel mix and higher marketing spend. For the six months, operating cash flow was $1.19 billiond, and the company repurchased $900.0 million of common stock, leaving $2.34 billion of authorization under the 2026 Share Repurchase Program. Cash and cash equivalents were $1.05 billion against $2.38 billion of long-term debt, and total stockholders' equity was $551.2 million.
The company introduced its 2028 growth strategy, Amplify, in the first quarter of fiscal 2026. Management states that cash flows, credit lines and on-hand cash will provide adequate funds for fiscal 2026 and beyond. The company also disclosed a securities class action, filed in the District of Delaware, related to the terminated Capri Acquisition, and says it intends to defend itself vigorously.
02—Key points
Key Highlights
- Net sales of $2,502.4 million for the quarter, up 14.0%; Coach up 25.3% to $2,142.4 million, Kate Spade down 13.6% to $360.0 million.
- Operating income of $716.4 million, up $223.6 million; operating margin 28.6% versus 22.4% a year earlier.
- Diluted EPS of $2.68 versus $1.38; excluding items affecting comparability, diluted EPS of $2.69 versus $2.00.
- Gross margin of 75.5% versus 74.4%; tariffs and de minimis removal reduced gross margin by approximately 190 basis points in the quarter.
- Kate Spade operating margin fell to 4.5% from 16.4% on higher tariffs, unfavorable channel mix and higher marketing spend.
- Six-month operating cash flow of $1,193.7 million; $900.0 million of share repurchases in the six months, with $2.34 billion of authorization remaining.
- Stuart Weitzman sale to Caleres, Inc. completed August 4, 2025 for $105.0 million in total cash consideration; stockholders' equity of $551.2 million at quarter end.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q2 FY2026, Tapestry kept $0.22.
- Revenue$2.50B100.0%
- Cost of revenue−$614.0M24.5%
- Gross profit$1.89B75.5%
- Operating costs−$1.17B46.8%
- Operating income$716.4M28.6%
- Interest, other & tax−$155.1M6.2%
- Net income$561.3M22.4%
04—Financials
Financial Highlights
Figures from 10-QQ2 FY2026filed February 5, 2026Financial Statements
Q2 FY2026 against Q2 FY2025
| Line item | Q2 FY2026Q2 FY2025 | Change |
|---|---|---|
| Revenue | $2.50B$2.20B | +14.0% |
| Cost of Revenue | $614.00M$562.30M | +9.2% |
| Gross Profit | $1.89B$1.63B | +15.6% |
| SG&A Expenses | $1.17B$1.14B | +2.8% |
| Operating Income | $716.40M$492.80M | +45.4% |
| Interest Expense | $30.90M$85.80M | −64.0% |
| Net Income | $561.30M$310.40M | +80.8% |
| EPS (Basic) | $2.75$1.41 | +95.0% |
| EPS (Diluted) | $2.68$1.38 | +94.2% |
| Shares Outstanding (Basic) | 204.10M219.90M | −7.2% |
| Shares Outstanding (Diluted) | 209.80M224.90M | −6.7% |
05—Questions
Frequently Asked Questions
How did Tapestry's sales and profitability trend in the second quarter of fiscal 2026?
Net sales rose 14.0% to $2.50 billion, driven by Coach's 25.3% increase. Operating income increased $223.6 million to $716.4 million, and net income rose to $561.3 million from $310.4 million. The prior-year quarter included $197.6 million of pre-tax Capri Acquisition-related expenses, so the comparison is affected by those items.
What is driving the divergence between Coach and Kate Spade?
Coach net sales increased $433.1 million, primarily from a $373.6 million increase in DTC sales, mainly in North America, Greater China and Europe. Kate Spade net sales fell $56.4 million, mainly from a $54.0 million decline in DTC sales. Kate Spade's operating margin fell to 4.5% due to higher tariffs, unfavorable channel mix and higher marketing spend.
How are tariffs affecting margins?
The filing states that tariffs and the removal of the de minimis exemption reduced gross margin by approximately 190 basis points for the three months and 140 basis points for the six months ended December 27, 2025. The company says it continues to take actions to mitigate these incremental costs.
How is Tapestry returning capital and what is its balance sheet position?
During the six months, the company repurchased $900.0 million of common stock and paid $164.6 million in dividends. At quarter end, cash and cash equivalents were $1,053.3 million, long-term debt was $2,379.3 million, and $2.00 billion of revolving credit capacity was undrawn. Total stockholders' equity was $551.2 million, down from $857.8 million at fiscal year-end.
What legal matters does the filing disclose?
Two putative securities class actions were filed in the U.S. District Court for the District of Delaware in December 2024 and January 2025 against Capri, Tapestry and certain officers, alleging misstatements related to the terminated Capri Acquisition. The complaints seek unspecified damages. The company moved to dismiss on July 14, 2025 and says it intends to vigorously defend itself.
06—Continue