By Anuja Bharat Mistry
May 7 (Reuters) – Coach parent Tapestry on Thursday raised its annual forecasts for a third time, banking on resilient demand from younger shoppers for its sought-after Tabby handbags and other leather goods.
Shares of the affordable luxury retailer, which also beat third-quarter estimates, rose about 4% premarket.
Tapestry’s investments in fashion-led innovations, such as bag and book charms that are popular among Gen Z customers, have helped boost its sales, despite a broader luxury slowdown driven by geopolitical tensions.
Luxury brands worldwide have taken a hit in Dubai and Abu Dhabi due to the Iran conflict. Recently, Hermes, Kering and LVMH reported weak demand in the Middle East and Europe.
Tapestry said it has not been affected by the ongoing conflict, but is monitoring potential impact on consumer sentiment, according to its annual filing.
“Coach’s accessible, value-oriented luxury positioning has won over highly selective consumers who seek quality and cultural relevance without the much higher prices demanded by traditional luxury players,” said Sky Canaves, analyst at eMarketer.
Tapestry recorded a 31% jump in third-quarter revenue on a reported basis in Europe from the year-ago period, and 20% growth in North America – its biggest market.
It now expects fiscal 2026 revenue of about $7.95 billion, compared with its prior forecast of more than $7.75 billion.
It sees earnings per share of $6.95, above its previous range of $6.40 to $6.45.
The consumer continues to be resilient and respond to our brands and the products we are bringing, CFO Scott Roe told Reuters.
Tapestry’s quarterly revenue of $1.92 billion surpassed analysts’ average estimate of $1.79 billion, while adjusted profit of $1.66 per share topped estimates of $1.30, according to data compiled by LSEG.
Since fiscal 2025, Tapestry has paid about $115 million related to tariffs and not recorded any receivable for potential refunds as of March 28, per the filing.
(Reporting by Anuja Bharat Mistry in Bengaluru; Editing by Shinjini Ganguli)
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