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November 8, 2025 • 3 min read
Tapestry, Inc., the global house of brands behind Coach and Kate Spade, recently released its financial results for the first quarter of fiscal year 2026. For investors and fashion industry watchers, digging into these reports offers a clear view of a company in motion, with standout successes and notable challenges. Let's unpack the key takeaways from their latest 10-Q filing.
Overall, the quarter was strong. Tapestry's total net sales grew a healthy 13.1% year-over-year, reaching $1.7 billion. This top-line growth translated into even better bottom-line results, with net income surging by 47.2% to $274.8 million, or $1.28 per diluted share. But the headline numbers don't tell the whole story; the real narrative lies within the performance of its individual brands.
The Coach brand was unquestionably the star of the quarter. It posted a remarkable 22.1% increase in net sales, bringing its total to $1.43 billion. This wasn't just empty revenue growth; Coach's operating income also jumped 26.1% to $487.4 million, demonstrating strong profitability and brand momentum. With a healthy operating margin of 34.1%, Coach remains Tapestry's powerful growth engine, successfully connecting with consumers and driving the company's overall success.
In stark contrast, the Kate Spade brand faced significant headwinds. Net sales fell 8.1% to $260.2 million. More alarmingly, its operating profit plummeted nearly 80%, from $27.0 million in the prior year to just $5.6 million this quarter. The company's management discussion attributed this margin compression to the impact of higher tariffs, an unfavorable channel mix, and increased marketing expenses. This performance highlights an urgent need for a strategic reset to reinvigorate the brand and restore its profitability.
To see how these moving parts fit together, the following flow diagram provides a visual breakdown of Tapestry's income statement for the quarter, tracing the path from over $1.7 billion in revenue down to its $275 million in net profit.
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Beyond brand performance, Tapestry's management has been making decisive strategic moves. The company recently completed the divestiture of its Stuart Weitzman footwear brand, a move reflected in the brand's minimal contribution to the quarter's results. This divestiture simplifies the company's portfolio, allowing for a greater focus on its core handbag and accessory brands.
Tapestry also demonstrated strong confidence in its financial position by returning a significant amount of capital to shareholders. During the quarter, the company repurchased $698.2 million of its common stock, a substantial buyback that reduces the number of shares outstanding and can boost earnings per share. This was partly funded by issuing $240 million in short-term debt via its commercial paper program.
Tapestry's first-quarter results present a clear picture: the powerhouse Coach brand is firing on all cylinders, driving impressive growth and profitability for the entire company. However, the steep decline at Kate Spade is a significant concern that cannot be overlooked. The pressure is now squarely on management to architect a turnaround for the brand. With the Stuart Weitzman divestiture complete and an aggressive share repurchase program underway, Tapestry is actively reshaping its future in the competitive global luxury market.
Last updated: November 8, 2025