Tapestry's Coach Delivers Powerful Start to FY26, Eyes $10B Target

Tapestry, Inc.’s TPR Coach brand entered fiscal 2026 with exceptional momentum, underscoring its strength as a global leader in accessible luxury. In the fiscal first quarter, Coach delivered a 21% year-over-year revenue increase, driven by strong double-digit gains across all key regions.

North America advanced 26%, China rose 21% and Europe jumped 39% year over year, reflecting the brand’s broad-based appeal and growing international presence. The company also reported the addition of 1.7 million customers worldwide. This expanding base of younger shoppers highlights Coach’s success in building long-term brand equity through modern storytelling and inclusive design.

Handbag average unit retail rose in the mid-teens in the quarter, complemented by an increase in total handbag units sold despite reduced promotional activity. The strength of accessories, including charms and straps, reinforced Coach’s ability to personalize and elevate its offerings. In addition, footwear achieved double-digit gains, led by the sustained popularity of the High Line and Soho families, confirming the category’s strategic importance in driving diversification and customer acquisition.

Coach’s focus on creativity and innovation remained evident in its Spring 2026 runway presentation at New York Fashion Week, which received strong critical and consumer responses. Marketing investment represented roughly 11% of sales, up 43% from the prior year, demonstrating the brand’s continued commitment to meaningful storytelling and customer engagement.

The launch of Coach Coffee Shops at Jersey Gardens and Woodbury Commons offered immersive brand experiences for younger audiences, while the “One Coach” strategy, introducing full-price collection products into outlet locations, helped enhance accessibility and elevate price realization. With nearly 90% of sales generated through direct-to-consumer channels, Coach continues to capitalize on its agile model to connect with consumers where they shop most.

Tapestry expects Coach’s strong performance to continue. For the second quarter of fiscal 2026, the brand is projected to deliver low-double-digit revenue growth, equivalent to mid-20% growth on a two-year stacked basis, maintaining the momentum of the fiscal first quarter. For fiscal 2026 overall, Coach is expected to achieve low-double-digit revenue growth while sustaining its operating margin, even amid tariff headwinds and continued strategic investments.

With disciplined execution, an expanding global reach, and an emotional connection that continues to resonate with modern consumers, Coach remains central to Tapestry’s growth strategy and is firmly on track toward its long-term ambition of becoming a $10-billion global brand.

TPR’s Price Performance, Valuation & Estimates

Shares of Tapestry have surged 62.4% year to date against the industry’s decline of 18.3%.

From a valuation standpoint, TPR trades at a forward price-to-earnings ratio of 18.35X, slightly up from the industry’s average of 16.31X. It has a Value Score of B.

The Zacks Consensus Estimate for Tapestry’s fiscal 2026 earnings implies year-over-year growth of 9.2%, whereas the same for fiscal 2027 indicates an uptick of 10.6%. Earnings estimates for fiscal 2026 and 2027 have been revised upward by 9 cents and 8 cents per share, respectively, in the past seven days.

TPR currently carries a Zacks Rank #2 (Buy).

Other Key Picks

Some other top-ranked stocks are Boot Barn Holdings, Inc. BOOT, FIGS Inc. FIGS and American Eagle Outfitters Inc. AEO.

Boot Barn operates as a lifestyle retail chain devoted to western and work-related footwear, apparel and accessories. It currently flaunts a Zacks Rank of 1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Boot Barn’s fiscal 2026 earnings and sales implies growth of 20.5% and 16.2%, respectively, from the year-ago actuals. Boot Barn delivered a trailing four-quarter average earnings surprise of 5.4%.

FIGS is a direct-to-consumer healthcare apparel and lifestyle brand. It has a Zacks Rank #1 at present.

The Zacks Consensus Estimate for FIGS’ current financial-year earnings and sales suggests growth of 300% and 5.4%, respectively, from the year-ago actuals. FIGS delivered a trailing four-quarter average earnings surprise of 87.5%.

American Eagle is a specialty retailer of casual apparel, accessories and footwear. It carries a Zacks Rank of 2 at present.

The Zacks Consensus Estimate for American Eagle's current fiscal-year earnings and sales suggests declines of 36.2% and 1.5%, respectively, from the year-ago actuals. AEO delivered a trailing four-quarter average earnings surprise of 30.3%.

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This article originally published on Zacks Investment Research (zacks.com).

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