Tapestry (NYSE: TPR) raised its full-year revenue guidance to about $7.95 billion after delivering a stellar third quarter that beat analyst expectations on nearly every metric, with its Coach brand doing most of the heavy lifting.
The company reported third-quarter net sales of $1.92 billion, up 21% from the year-ago period. Coach has grown 31% to $1.7 billion and now accounts for around 89% of the group’s revenue. These numbers are notable in the context of the broader luxury sector, which has spent much of 2026 issuing cautious guidance and blaming geopolitical headwinds.
This marks the third consecutive quarter that Tapestry has raised its full-year outlook, beating analysts’ sales estimates of $1.79 billion and reporting adjusted earnings of $1.66 per share, well above forecasts. Full-year guidance is now for revenue of approximately $7.95 billion and adjusted earnings per share of $6.95, up from the previous range of $7.75 billion and $6.40 to $6.45.
Geographical pictures tell an equally incredible story. For the quarter, Greater China sales increased 61% to $432.2 million, making it the strongest region in the portfolio by a wide margin. Europe grew by 31%, Rest of Asia led by Korea and Australia grew by 24%, and North America grew by 20% to approximately $1.1 billion. While European luxury homes have repeatedly pointed to China as a performance drag, Tapestry appears to be operating in a completely different market reality.
The driving force behind Coach’s push is a well-publicized shift in how the brand reaches younger consumers. The Tabby bag series, combined with an aggressive social media strategy across TikTok and Pinterest, has firmly established Coach in the Gen Z conversation without abandoning its core leather goods customer. More than 80% of Coach’s sales come from the high-margin bags and leather goods categories, and the brand’s margins have now reached levels similar to those of Europe’s leading luxury brands, despite a more accessible price positioning.
Kate Spade remains the group’s troublemaker. The brand recorded a 10% decline in sales in the quarter, and with the sale of Stuart Weitzman in August 2025, Tapestry is now effectively a two-brand company moving at very different paces. Executives have outlined a repositioning plan for Kate Spade focused on strengthening its luxury credentials and focusing on handbag blockbusters, but the results are not yet in sight.
The broad contrast with European luxury is difficult to ignore. Five years ago, Kering’s market capitalization was more than 10 times that of Tapestry. Today, that gap has narrowed to about $10 billion, with Tapestry valued at about $27 billion compared to Kering’s $36 billion. The company also has set a long-term ambition to grow Coach into a $10 billion brand in its own right. This goal may have seemed ambitious 18 months ago, but it seems much more credible today.
