Tapestry's anticipated tariff pressure overshadows upbeat FQ4 results

Tapestry (NYSE:TPR [https://seekingalpha.com/symbol/TPR]) shares are under pressure in Thursday’s premarket trading as tariff pressures are expected to weigh on the company’s profitability in FY26, overshadowing better-than-expected fiscal fourth quarter results [https://seekingalpha.com/news/4485227-tapestry-non-gaap-eps-of-1_04-beats-by-0_02-revenue-of-1_72b-beats-by-40m] and driving the stock more than 6% lower into the open.

The parent company of Coach and Kate Spade also raised its quarterly dividend by 14% to reflect the strength of its financial performance during the first half of the year.

“Fiscal 2025 was a breakout year for Tapestry as our systemic approach to brand-building is capturing a new generation of consumers around the world. Our strong growth, capped by our fourth quarter outperformance, reinforces that our strategies are working,” said Tapestry CEO Joanne Crevoiserat.

Led by a 13% increase in Coach sales, total revenue for the company increased 8% to a quarterly record of $1.7B, $40M better than expectations. This contributed to a profit of $1.04 per share, up from $0.82 per share a year ago and 2 cents better than expected. Operating margin improved 290 basis points to 20.0%.

Sales were strongest in China with an 18% increase, following by +10% in Europe and +8% in North America. Sales in Japan and regions in Asia excluding Japan and China were down 11% and 1%, respectively.

For FY26 – including the impact of tariffs – Tapestry (NYSE:TPR [https://seekingalpha.com/symbol/TPR]) expects revenue to increase by low-single-digits to $7.2B, above the $7.10B estimate. Earnings, however, are expected to be between $5.30 and $5.45 per share, representing 4% to 7% growth but below the $5.48 consensus estimate. This is attributed to the $160M impact from tariffs which the company expects will shave 230 basis points off operating margin.

The impact on Tapestry (NYSE:TPR [https://seekingalpha.com/symbol/TPR]) shares is weighing on peers including Capri (CPRI [https://seekingalpha.com/symbol/CPRI]), Ralph Lauren (RL [https://seekingalpha.com/symbol/RL]), PVH (PVH [https://seekingalpha.com/symbol/PVH]), and Abercrombie & Fitch (ANF [https://seekingalpha.com/symbol/ANF]).

MORE ON TAPESTRY

* Tapestry: Coach Leads A Weak Luxury Market [https://seekingalpha.com/article/4808169-tapestry-coach-leads-a-weak-luxury-market]
* Tapestry: Gen Z And Millennials Sponsoring The Resurgence [https://seekingalpha.com/article/4794250-tapestry-gen-z-and-millennials-sponsoring-the-resurgence]
* Tapestry: Coach Leads The Way, But Valuation Has Risen [https://seekingalpha.com/article/4788709-tapestry-coach-leads-the-way-but-valuation-has-risen]
* Tapestry Non-GAAP EPS of $1.04 beats by $0.02, revenue of $1.72B beats by $40M [https://seekingalpha.com/news/4485227-tapestry-non-gaap-eps-of-1_04-beats-by-0_02-revenue-of-1_72b-beats-by-40m]
* Tapestry FQ4 2025 Earnings Preview [https://seekingalpha.com/news/4484800-tapestry-fq4-2025-earnings-preview]