Tapestry Beats on Coach and Lifts Its Dividend 16%, but a Merely In-Line Fiscal 2027 Outlook Guts the Stock

by Marcus Donnelly · August 13, 2026

Market Reaction Reporter, Earnings Dispatch

Tapestry did almost everything the market asked of it in its fiscal fourth quarter and was punished anyway. The Coach and Kate Spade parent, which trades on the New York Stock Exchange under TPR, reported results for the quarter and year ended June 27, 2026 before the opening bell on Thursday that beat consensus on both the top and bottom lines, raised its dividend by 16% and said it had hit financial targets set at its investor day two years ahead of schedule. The stock then fell by double digits, ending the day among the worst performers in an S&P 500 that closed at a record high of 7,798.99.

The quarter itself was strong. According to the company's results release, fiscal fourth-quarter net sales were $1.88 billion, up 9% as reported and 11% in constant currency on a pro forma basis. Non-GAAP diluted earnings per share came in at $1.32, up 28% year over year. GAAP diluted earnings per share were higher, at $1.68, a reminder that the two measures diverged in Tapestry's favor this quarter and that the comparison against Wall Street's models runs on the non-GAAP line. Gross margin was 83.3% on a GAAP basis and 78.1% on a non-GAAP basis, the latter an expansion of 180 basis points. Non-GAAP operating margin was 19.3%, up 250 basis points.

Yahoo Finance reported that analysts had modeled $1.25 in adjusted earnings on $1.86 billion of revenue, while 24/7 Wall St. put the consensus at $1.28 on $1.87 billion. On either reading, Tapestry cleared it. The engine was Coach, which posted $1,641.5 million of quarterly sales, up 15% as reported and 14% in constant currency. Kate Spade remains the problem child: its quarterly sales fell 7% on both a reported and a constant-currency basis, to $235.1 million.

For the full fiscal year, Tapestry reported revenue of $8.0 billion, up 14% as reported and 17% in pro forma constant currency, with GAAP diluted earnings per share of $7.27 and non-GAAP diluted earnings per share of $7.05, a 38% increase. Non-GAAP operating margin expanded 340 basis points to 23.4%. Coach generated $6,914.7 million of annual revenue, up 24% as reported and 23% in constant currency, while Kate Spade fell 10% as reported and 11% in constant currency, to $1,074.9 million.

The break came in the outlook. For fiscal 2027, Tapestry guided to revenue of $8.4 billion to $8.5 billion, described as mid-single-digit growth, with diluted earnings per share of $7.80 to $7.90, described as low-double-digit growth. The company also guided to roughly 50 basis points of operating margin expansion, a tax rate near 18.5%, adjusted free cash flow of about $1.7 billion, and capital expenditures and cloud computing costs of about $300 million. For the fiscal first quarter it pointed to high-single-digit revenue growth and earnings of about $1.55 a share.

That revenue range was the sticking point. Yahoo Finance reported that the $8.45 billion midpoint landed slightly below a Wall Street estimate of $8.47 billion, and that the modest shortfall outweighed both the earnings guidance and the strong quarter in the initial reaction. StockStory framed the sell-off as profit-taking after a pre-earnings run, noting the shares had set a 52-week high of $164.78 earlier in August.

The scale of the move was unusual for a company that beat. TPR closed Thursday's regular session at $128.39, down 16.49%, a decline of $25.35 from Wednesday's $153.74 close, according to market data site StockAnalysis; a Reuters closing wrap carried by MarketScreener independently listed the stock down 16.49% on the day, describing shares as having plunged more than 16% after the Coach owner forecast muted annual revenue growth. The selling built through the session rather than exhausting itself at the open. Financial data provider TradingKey said the stock opened down 14.60%; StockStory logged a 14.8% morning decline to $131.03; and The Motley Fool reported shares off 15.1% at $129.10 as of 12:57 p.m. Eastern. By the closing bell, roughly a sixth of Tapestry's market value had come off in a single session.

Part of the explanation is arithmetic rather than deterioration. Fiscal 2026 delivered high-teens constant-currency revenue growth and a 38% increase in adjusted earnings per share. Fiscal 2027, as guided, delivers mid-single-digit revenue growth and low-double-digit earnings growth. That is still growth, but it is a materially slower rate, and a stock that had rerated on the fast numbers had to absorb the slower ones.

Management paired the guidance with capital returns. The quarterly dividend goes up 16%, to $0.4625 a share payable September 21, 2026, an annual rate of $1.85 per share from $1.60, and the company said it returned $326 million in dividends and repurchased $1.35 billion of stock during fiscal 2026 — roughly 11.5 million shares at an average price near $118. The release said Tapestry expects to return approximately $1.7 billion to shareholders in fiscal 2027. On the earnings call, according to a summary published by Yahoo Finance, executives said the company welcomed 11 million new customers across its brands, led primarily by Gen Z shoppers, and achieved mid-teens handbag average-unit-retail growth at Coach in part by cutting promotional days. They also said they expect a net neutral profit-and-loss impact from tariffs for the full year, with a modest benefit in the first half of fiscal 2027 and a headwind in the second, and forecast a high-single-digit decline at Kate Spade in fiscal 2027 as a newly appointed executive creative director works on the brand.

Chief executive Joanne Crevoiserat struck a confident tone in the release. "Our fourth quarter outperformance capped a year of strong growth, as we meaningfully exceeded expectations and achieved key financial commitments we established at our Investor Day two years ahead of plan," she said. She continued: "Our success is by design, demonstrating the power of our Amplify strategy. Through intentional choices, disciplined execution, and an unwavering focus on the consumer, we have built a stronger, more focused organization. These strengths enable us to deliver creativity, value, and relevance at scale, deepening our connections with consumers globally. We are confident our advantages will continue to compound, driving durable growth and long-term shareholder value."

The reaction sets up an awkward frame for the retail reporting block that follows next week, when the market gets its next reads on the American consumer. Thursday's session was otherwise benign — the Nasdaq Composite rose 0.81% to 26,803.03 and the Russell 2000 closed at a record 3,052.85, helped by a producer price index that the Bureau of Labor Statistics said was unchanged in July. Against that backdrop, Tapestry's fall was a story about expectations, not about the tape. This article reports results and market reaction and is not investment advice.