Tapestry raised its fiscal 2027 revenue forecast to $8.5 billion to $8.6 billion from $8.4 billion to $8.5 billion, and raised its annual earnings per share guidance to $8.25 to $8.35 from $7.80 to $7.90. Shares jumped nearly 12% in premarket trading.
The handbag maker beat first-quarter estimates with quarterly revenue of $1.89 billion, exceeding analyst expectations of $1.86 billion. Adjusted profit reached $1.82 per share versus estimates of $1.57.
Coach, the company's flagship brand, posted 16% quarterly revenue growth on a reported basis, driven by strong sales in North America and China, where revenue jumped 43%. Coach has gained traction with Gen Z shoppers through products like bag charms and celebrity campaigns featuring Elle Fanning and K-pop star So-yeon.
Coach CEO Todd Kahn told Reuters the brand sees "compelling growth" across income and age groups. He said Coach will not increase promotional activity during the holiday season, citing strength in its $200 to $500 price range. Kate Spade, the company's other major brand, declined 10% in quarterly sales from a year ago.
Tapestry increased its share buyback authorization to $1.7 billion for the fiscal year, up $350 million from prior guidance.
Wealthier US consumers have continued spending on accessible luxury goods, while lower-income shoppers reduced purchases of non-essentials. The company faces headwinds from Middle East conflict and China's tax crackdown on affluent shoppers, pressures also affecting Kering, LVMH, and Hermes.
Investors watching Tapestry (TPR) shares should monitor Coach's sustained momentum with younger consumers and the company's holiday quarter performance.