Tapestry maintains FY26 outlook as tariffs pressure margins

Transcript intelligence

What changed

Compared with the prior analysis, FY26 guidance remained maintained rather than raised, tariff exposure became a larger margin issue, Kate Spade recorded a significant impairment charge, and the Stuart Weitzman divestiture was completed.

Guidance delta

FY26 guidance was maintained: mid-single-digit revenue growth and mid-single-digit earnings growth, despite tariff and duty headwinds.

Key takeaways

• FY25 results were described as records, with $7 billion of revenue, a 20% operating margin, and EPS above $5.
• Coach remained the main growth engine, with double-digit revenue growth, higher average unit retail, and more than 6 million new customers.
• Management said tariff and duty headwinds could reduce gross margin by about 230 basis points, with mitigation plans in place.
• Kate Spade remains a weak spot, including a non-cash impairment charge of more than $850 million tied to tariffs and strategic investments.
• The Stuart Weitzman divestiture to Caleres was completed in August, while technology, stores, product launches, and shareholder returns remain priorities.

Management priorities

• Acquire Gen Z and millennial customers through product, stores, and omnichannel experiences.
• Support direct-to-consumer growth with continued investment in data, AI, and technology platforms.
• Open and renovate North American stores and launch new product collections.
• Execute the share repurchase program while maintaining dividend growth.