Tapestry Passed the Quarter and Flunked the Outlook: FY27 Guide Bakes In Another Kate Spade Decline

by Marcus Donnelly · August 14, 2026

Market Reaction Reporter, Earnings Dispatch

Tapestry (NYSE: TPR) reported fiscal 2026 fourth-quarter and full-year results at 6:45 a.m. ET on Thursday, August 13 — before the opening bell, not after it — and by the close the stock had given back roughly a sixth of its value. Shares finished down 16.5% at $128.39 against a prior close of $153.74. MarketBeat's data on the day shows the stock gapped open at $132.70, so the bulk of the decline was set at the opening print — though the shares kept grinding lower through the session, closing below where they opened.

The quarter itself was not the problem. Fourth-quarter net sales were $1.88 billion, up 9% as reported. Non-GAAP earnings came in at $1.32 per share against $1.04 a year earlier, ahead of the $1.26 consensus tracked by Zacks. On a GAAP basis Tapestry reported $1.68 per share — higher than the adjusted figure, an inversion that also shows up at the gross margin line, where the company posted an 83.3% GAAP gross margin versus a 78.1% non-GAAP gross margin. Readers comparing quarters should keep those two bases separate; the adjusted 78.1% is the number management guided to and the one that expanded 180 basis points year over year.

Brand-level results were a study in divergence. Coach delivered $1,641.5 million in fourth-quarter revenue, up 15% as reported and 14% in constant currency. Kate Spade delivered $235.1 million, down 7% on both a reported and constant-currency basis. Stuart Weitzman, divested in August 2025, contributed nothing to the quarter. Greater China grew 33% as reported and 28% in constant currency in the quarter, per the company's release and the Zacks breakdown of it — the strongest regional line in the quarter. (For the full year the region grew 38% reported and 35% in constant currency.)

For the full fiscal year, Tapestry reported $8.00 billion in revenue, up 14% as reported, with GAAP earnings of $7.27 per share and non-GAAP earnings of $7.05, the latter up 38% from fiscal 2025. Adjusted gross margin for the year reached 76.6% and adjusted operating margin 23.4%, an expansion of roughly 340 basis points. Coach finished the year at $6,914.7 million in revenue, up 24% reported. Kate Spade finished at $1,074.9 million, down 10% reported.

Chief Executive Joanne Crevoiserat framed the year around the company's Amplify plan 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. 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," she said.

This site previewed the print with the argument that fiscal 2027 guidance, not the June quarter, was the real test. That framing held. Tapestry guided fiscal 2027 revenue to $8.4 billion to $8.5 billion, described as mid-single-digit growth, with the $8.45 billion midpoint sitting slightly below the roughly $8.47 billion analysts were carrying, per StockStory's read of the consensus. Non-GAAP EPS guidance of $7.80 to $7.90 straddles rather than clears where the Street sat.

The composition of that guidance is what did the damage. Management's plan assumes Coach grows at a high-single-digit rate in fiscal 2027 while Kate Spade declines at a high-single-digit rate and carries a modest operating loss, according to a recap of the earnings call carried by Yahoo Finance. That is a second consecutive year of contraction penciled in for the brand, after a 10% reported decline in fiscal 2026 — and on the call the company indicated that top-line progress at Kate Spade has been more gradual than planned, with unaided brand awareness not yet improving despite marketing spend.

Everything else in the outlook is comparatively benign. Tapestry guided to roughly 50 basis points of operating margin expansion, an anticipated 40-basis-point currency benefit, a tax rate around 18.5%, and adjusted free cash flow of about $1.7 billion. On tariffs, the company assumed a mid-20% rate applied to U.S. inventory receipts and told investors it expects the net year-over-year impact to be neutral, per Benzinga's summary of the guidance assumptions. The guidance also assumes no significant deterioration in inflation or consumer confidence — a conditional worth noting when reading the ranges.

The capital returns were unambiguous. The board raised the quarterly dividend 16% to $0.4625 per share, an annualized $1.85, and Tapestry repurchased about $1.35 billion of stock during fiscal 2026 at an average price near $118, bringing total capital returned for the year to roughly $1.7 billion, according to the Zacks breakdown. The company signaled a similar $1.7 billion return in fiscal 2027. A 16% dividend increase alongside a 16% single-day share decline is an unusual pairing, and it captures the split between what the business earned and what the outlook implied.

It is also worth being precise about how much of Thursday's move was mechanical repricing versus new information. Tapestry bought back stock at roughly $118 on average through fiscal 2026 and entered Thursday at $153.74. The shares had run hard into the print, and StockStory attributed part of the reaction to profit-taking on top of the guidance shortfall rather than to the quarter itself.

Context matters for how isolated the move was. Thursday was a broadly positive session: the S&P 500 closed at 7,798.99, up 50.49 points or 0.65%, while the Russell 2000 closed at 3,052.85, up 7.36 points, according to the Associated Press tally of the day. Both were record closes, per Schaeffer's Investment Research. The S&P only traded above 7,800 intraday; it did not close there. Tapestry's decline was a single-name event inside a market making highs.

The reporting calendar from here is thin. Kiplinger's calendar for the week showed Thursday and Friday as the lightest two days of the August 10–14 stretch, with only a handful of names scheduled. That leaves Tapestry's print, and the fiscal 2027 assumptions underneath it, as the dominant consumer-discretionary data point of the week — and leaves the Kate Spade trajectory as the line item to track against management's own high-single-digit-decline plan when the first quarter is reported.