Tapestry raises its outlook as Gen Z shoppers snap up Coach bags; China sales jump 43%
Coach owner Tapestry beat first-quarter estimates and lifted its annual revenue and profit forecasts, betting on young affluent shoppers this holiday season. Coach sales rose 16% while Kate Spade fell 10%; shares rose nearly 12% before the opening bell.
Tapestry, owner of Coach and Kate Spade, raised its full-year forecasts on Thursday, 5 November, after a stronger-than-expected first quarter, Reuters reported. Its shares were up nearly 12% in premarket trading.
The numbers
- Quarterly sales rose 11.1% to $1.89 billion, above analysts’ estimates of $1.86 billion (LSEG data); adjusted earnings were $1.82 per share versus $1.57 expected.
- Coach revenue grew 16%, while Kate Spade fell 10%.
- Sales in China jumped 43%.
New outlook for fiscal 2027
- Revenue: $8.5–8.6 billion (previously $8.4–8.5 billion).
- Earnings per share: $8.25–8.35 (previously $7.80–7.90).
- Share buybacks: $1.7 billion, $350 million more than planned.
Young shoppers
Coach has gained popularity with Gen Z customers in North America, China and Europe, helped by bag charms and campaigns with Elle Fanning and K-pop star So-yeon. Coach CEO Todd Kahn told Reuters the brand is seeing growth “across every cohort” and will not become more promotional over the holidays, pointing to its “sweet spot” of $200–500 items.
The result contrasts with European luxury groups such as Kering, LVMH and Hermès, which are dealing with weak demand in China and the US and new pressure from the Middle East conflict, Reuters noted.
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