01—Abstract
Summary
Summary of the 10-Q filed May 7, 2026. Cited figures are marked; the original filing is the authoritative source.
Tapestry, Inc. (TPR) reported third-quarter fiscal 2026 results for the 13 weeks ended March 28, 2026, with net sales of $1.92 billiona, up 21.2% or $336.0 million from $1.58 billion a year earlier.
Coach drove the growth, with net sales up 31.5% to $1.70 billionb, while Kate Spade net sales fell 10.3% to $219.6 million. Operating income rose to $427.5 million from $253.7 million, and net income increased 69.1% to $343.8 million, or $1.65 per diluted share. The company attributed the quarter's results in part to the Stuart Weitzman Business divestiture completed on August 4, 2025, for a final purchase price of $109.1 million.
Excluding items affecting comparability, diluted EPS was $1.66c versus $1.03 a year earlier. For the first nine months of fiscal 2026, net sales rose 15.9% to $6.13 billion and net income rose 68.5% to $1.18 billion, or $5.58 per diluted share. Net cash provided by operating activities was $1.46 billion, compared with $769.8 million a year earlier.
Share repurchases totaled $1.25 billiond in the nine-month cash flow statement, and the company had $2.19 billion of remaining authorization under its 2026 Share Repurchase Program as of March 28, 2026. Balance sheet items to note include cash and cash equivalents of $1.05 billion, long-term debt of $2.38 billion, no borrowings under the $2.00 billion revolving credit facility, and total stockholders' equity of $682.4 million, down from $857.8 million at June 28, 2025. The filing also cites tariff-related gross margin pressure of approximately 180 basis points in the quarter and approximately 150 basis points for the nine months, and a securities class action that was dismissed without prejudice on March 31, 2026 and subsequently amended on April 30, 2026.
02—Key points
Key Highlights
- Third-quarter net sales of $1.92 billion rose 21.2% year over year, with Coach net sales up 31.5% to $1.70 billion and Kate Spade net sales down 10.3% to $219.6 million.
- Third-quarter operating income was $427.5 million, up from $253.7 million, and operating margin was 22.3% versus 16.0% a year earlier.
- Third-quarter diluted EPS was $1.65 versus $0.95 a year earlier; excluding items affecting comparability, diluted EPS was $1.66 versus $1.03.
- Kate Spade reported an operating loss of $20.7 million in the quarter, with operating margin of (9.4)%, reflecting higher tariffs, unfavorable channel mix and higher marketing spend.
- The company repurchased $1.05 billion of common stock in the first nine months and had $2.19 billion of remaining authorization under the 2026 Share Repurchase Program at March 28, 2026.
- Tariffs reduced gross margin by approximately 180 basis points in the third quarter and 150 basis points for the nine months, and the company remitted approximately $115 million related to IEEPA tariffs, with no receivable recorded for potential refunds.
- Total stockholders' equity fell to $682.4 million from $857.8 million at June 28, 2025, while the company retained no borrowings under its $2.00 billion revolving credit facility.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q3 FY2026, Tapestry kept $0.18.
- Revenue$1.92B100.0%
- Cost of revenue−$444.1M23.1%
- Gross profit$1.48B76.9%
- Operating costs−$1.05B54.6%
- Operating income$427.5M22.3%
- Interest, other & tax−$83.7M4.4%
- Net income$343.8M17.9%
04—Financials
Financial Highlights
Figures from 10-QQ3 FY2026filed May 7, 2026Financial Statements
Q3 FY2026 against Q3 FY2025
| Line item | Q3 FY2026Q3 FY2025 | Change |
|---|---|---|
| Revenue | $1.92B$1.58B | +21.2% |
| Cost of Revenue | $444.10M$378.80M | +17.2% |
| Gross Profit | $1.48B$1.21B | +22.4% |
| SG&A Expenses | $1.05B$952.10M | +10.2% |
| Operating Income | $427.50M$253.70M | +68.5% |
| Interest Expense | $29.30M$32.80M | −10.7% |
| Net Income | $343.80M$203.30M | +69.1% |
| EPS (Basic) | $1.70$0.98 | +73.5% |
| EPS (Diluted) | $1.65$0.95 | +73.7% |
| Shares Outstanding (Basic) | 202.50M207.30M | −2.3% |
| Shares Outstanding (Diluted) | 208.30M213.90M | −2.6% |
05—Questions
Frequently Asked Questions
How did Coach perform in the third quarter of fiscal 2026?
Coach net sales increased 31.5% to $1.70 billion, or 29.0% excluding foreign currency, driven by a $322.9 million increase in DTC sales mainly in North America, Greater China and Europe. Coach operating income rose $175.1 million to $595.2 million, and operating margin was 35.0%.
Why did Kate Spade post an operating loss?
The filing attributes the Kate Spade operating loss of $20.7 million to a gross margin decline of 410 basis points, mainly from higher tariffs and unfavorable channel mix, and an SG&A ratio increase of 650 basis points driven by higher marketing spend and deleverage on lower net sales.
What is the status of the Stuart Weitzman divestiture?
The sale of the Stuart Weitzman Business to Caleres, Inc. was completed on August 4, 2025, for a final aggregate purchase price of $109.1 million. The divestiture resulted in a final total pre-tax loss of $22.0 million, of which $3.4 million was recorded in the first nine months of fiscal 2026.
How much cash did the company return to shareholders?
In the first nine months of fiscal 2026, the company paid $245.6 million in dividends and repurchased $1.25 billion of common stock on the cash flow statement. As of March 28, 2026, $2.19 billion remained under the 2026 Share Repurchase Program.
What is the company's debt position?
Long-term debt, net was $2.38 billion at March 28, 2026, with no current debt. The company had no borrowings outstanding under the $2.00 billion Amended Revolving Credit Facility or the Commercial Paper Program, and it was in compliance with its covenants, including a maximum net leverage ratio of 4.00:1.00.
06—Continue