Tapestry, Inc. enters fiscal 2027 with a tougher earnings test after fourth-quarter adjusted earnings beat the Zacks Consensus Estimate and margins expanded sharply, with management still expecting profit growth even as revenue growth moderates. The company projects fiscal 2027 revenues of $8.4-$8.5 billion, representing mid-single-digit growth, compared with fiscal 2026 pro forma constant-currency growth of 17%, with Coach revenues expected to rise at a high-single-digit rate while Kate Spade revenues decline at a high-single-digit rate. Management targets about 50 basis points of operating margin expansion, including roughly 30 basis points from gross margin and 20 basis points from SG&A leverage, following a 250-basis-point expansion in the fourth quarter. The outlook embeds a mid-20% tariff rate on U.S. inventory receipts, with mitigation expected to make the year-over-year profit impact roughly neutral, though tariffs are seen as a modest first-half benefit and a second-half headwind. Coach, which represented 86.4% of fiscal 2026 revenues, is expected to maintain an operating margin of nearly 36%, while Kate Spade, which posted a $27.2 million adjusted operating loss in fiscal 2026, is expected to incur another modest loss. Adjusted earnings are projected at $7.80-$7.90 per share, representing low-double-digit growth, with adjusted free cash flow approaching $1.7 billion and capital expenditures and cloud-computing costs rising to about $300 million.
Tapestry IncQ4 adjusted earnings beat estimates with 250bp margin expansion and FY2027 EPS growth guidance of $7.80-$7.90
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