Can Coach's Luxury Strategy Sustain TPR's Competitive Edge in FY26?

Tapestry, Inc.’s TPR Coach brand entered fiscal 2026 with strong momentum, reinforcing its position as a global leader in accessible luxury. The brand’s strategy combines craftsmanship, innovation and emotional storytelling with accessible luxury price points, typically around $200-$500, allowing for both average unit retail growth and increased unit sales while preserving strong perceived value.

In the first quarter, Coach delivered a robust 21% year-over-year revenue increase, reflecting broad-based demand across regions and categories. This performance highlights the brand’s ability to balance aspirational design with value, even amid a complex consumer backdrop.

Geographically, growth was impressive and well diversified. North America revenues climbed 26%, China advanced 21% and Europe jumped 39% year over year, underscoring Coach’s expanding international footprint. The brand also added 1.7 million customers globally in the fiscal first quarter, driven largely by younger consumers, signaling sustained brand relevance and long-term customer lifetime value potential.

Product execution remained a key driver. Handbag average unit retail increased in the mid-teens, while total handbag units also grew despite reduced promotional activity. Icon families continued to resonate, supported by strong demand for accessories, such as charms and straps that enhance personalization. Footwear posted double-digit growth, led by the High Line and Soho franchises, diversifying Coach’s growth engines.

Coach is strengthening consumer connection through immersive retail experiences, including the launch of Coach coffee shops in select North American locations, which are driving longer dwell times, deeper emotional engagement and higher conversion. In parallel, the One Coach strategy, which introduces full-price collection products into outlet environments, is gaining traction by elevating brand perception, encouraging trade-up behavior and supporting sustained AUR uplift across channels.

TPR Stock Past 6-Month Performance

Marketing and brand storytelling played a central role in sustaining momentum. Marketing investment reached roughly 11% of sales, reflecting a sharp year-over-year increase and reinforcing Coach’s focus on emotional engagement. Immersive initiatives, including experiential retail concepts and runway visibility, helped deepen cultural relevance and strengthen consumer connection.

Tapestry expects Coach to maintain its growth trajectory through fiscal 2026. Low-double-digit revenue growth is projected for the year, with the operating margin expected to be stable despite tariff pressures. With disciplined execution, global scale and strong brand resonance, Coach remains a cornerstone of Tapestry’s long-term growth strategy and a clear path toward its ambition of becoming a $10-billion brand.

TPR’s Price Performance, Valuation & Estimates

Shares of Tapestry have soared 47.8% in the past six months compared with the industry’s growth of 18.6%.

From a valuation standpoint, TPR trades at a forward price-to-earnings ratio of 21.97X, up from the industry’s average of 18.27X. It has a Value Score of C.

The Zacks Consensus Estimate for Tapestry’s fiscal 2026 earnings implies year-over-year growth of 9.6%, whereas the same for fiscal 2027 indicates an uptick of 10.5%. Earnings estimates for fiscal 2026 and 2027 have been revised downward by 4 cents and 3 cents per share, respectively, in the past 30 days.

TPR currently carries a Zacks Rank #3 (Hold).

Key Picks

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

FIGS is a direct-to-consumer healthcare apparel and lifestyle brand. It flaunts a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for FIGS’ current financial-year earnings and sales suggests growth of 450% and 7%, 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 sports a Zacks Rank of 1 at present.

The Zacks Consensus Estimate for American Eagle's current fiscal-year earnings and sales suggests declines of 23.6% and growth of 2.4%, respectively, from the year-ago actuals. AEO delivered a trailing four-quarter average earnings surprise of 35.1%.

Boot Barn operates as a lifestyle retail chain devoted to western and work-related footwear, apparel and accessories. It currently has a Zacks Rank of 2 (Buy). 

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%.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

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

Zacks Investment Research