Coach's Momentum Powers Tapestry Despite the Stock's Sharp Pullback

Coach’s Momentum Powers Tapestry Despite the Stock’s Sharp Pullback Written by Peter Frank | Reviewed by Shannon Harms September 21, 2026 Tapestry Today TPR Tapestry $113.62 -1.38 (-1.20%) As of 01:50 PM Eastern This is a fair market value price provided by Massive. Learn more. 52-Week Range $93.00 ▼ $164.80 Dividend Yield 1.63% P/E Ratio 15.59 Price Target $175.13 Add to Watchlist Tapestry NYSE: TPR has spent the past two years rebuilding, and by many measures, the rebuild is working. The parent of Coach and Kate Spade closed out its fiscal year 2026 (FY2026) by hitting multi-year targets, raising its dividend, and committing to fresh buybacks. More than a month after its August earnings report, however, the stock remains sharply below its summer high. The initial sell-off reflected disappointment with an outlook that failed to exceed elevated expectations, but shares have remained under pressure even as analysts continue to view the business favorably. For investors scanning the consumer discretionary space, Tapestry is worth a closer look. The question now is whether the pullback reflects lasting concerns about the company’s growth trajectory or an opportunity created by expectations that had simply gotten too high. Coach Leads Tapestry’s Earnings Momentum For its fiscal 2026, which ended June 27, Tapestry announced revenue of $8 billion, up roughly 14% from the prior year, and GAAP diluted earnings per share of $7.27 , a sharp improvement from the year before. Gross margin expanded to 83.3%, levels that few apparel and accessories peers can match. The company’s Aug. 13 fourth-quarter FY2026 report reinforced that progress. Revenue came in at $1.88 billion and beat consensus, while adjusted earnings per share of $1.32 were 4 cents above expectations . On the earnings call, CFO Scott Roe described a 25% increase in operating income for the quarter alone. Coach, in particular, is driving the increase. For the year, Coach revenue grew 24% and now generates the majority of total revenue. Its international momentum surprised even the bulls, with revenue in Europe up 22% in the quarter and 33% in Greater China. 3 Pillars Support the Comeback The company’s turnaround rests primarily on three pillars. First, Coach has genuinely reconnected with younger shoppers, with two years of product and marketing work built around Gen Z consumers now visibly showing up in the numbers. Second, the company has become a cash-return machine. The company confirmed that it returned $1.7 billion to shareholders in fiscal 2026 through dividends and buybacks, with another $1.7 billion planned for fiscal 2027. That focus on capital return applies also to the dividend. Combining a 16% increase to the dividend with a planned $1.35 billion buyback, the overall shareholder return is more attractive than the dividend yield of about 1.6% would suggest. The third pillar positioning its strength is its balance sheet. Once weighed down by financing tied to a terminated acquisition, it is finally clean, giving management room to keep buying back stock it considers cheap. Management Expects Growth to Continue in Fiscal 2027 Management's outlook adds to the case. Although apparently underwhelming for some, Tapestry guided revenue for fiscal 2027 of $8.4 billion to $8.5 billion, representing mid-single-digit growth, with operating margin expanding further. Earnings guidance of $...