Coach drives Tapestry past $8 billion for the year, but Japan is the one region that shrank

Tapestry, the parent of Coach and Kate Spade New York, reported fiscal 2026 net sales of $8.00bn, up 14% from $7.01bn the year before, the company said in results released on 13 August covering the fourth quarter and the full year. Coach did almost all of the lifting, with the brand's own full-year revenue up 24% to $6.91bn. But the same release carried a contrast: Japan was the one region where sales fell for the year, even as almost everywhere else the group posted double-digit gains.

By Tapestry's own regional breakdown, on a constant-currency, pro forma basis, full-year growth ran from Greater China's 35% down through Europe's 23%, North America's 15% and other Asia's 13% — and then to Japan, down 7%, or 10% on a reported basis. The fourth quarter told the same story in miniature: Greater China up 28%, other Asia up 22%, Europe up 19%, North America up 7%, and Japan again the sole decliner, down 4% in constant currency and 11% as reported.

Coach's own figures for the quarter: revenue of $1.64bn, up 15% reported (14% constant currency). Kate Spade New York, the group's smaller and still-troubled label, moved the other way, with full-year revenue down 10% to $1.08bn and the fourth quarter down 7% to $235m. (Stuart Weitzman, Tapestry's third brand until last year, was divested on 4 August 2025 and no longer features in the results.)

Group-wide, gross margin for the year expanded 120 basis points on a non-GAAP basis to 76.6% (77.8% on a GAAP basis), Tapestry said, with digital revenue growing at a high-teens rate for the full year against a mid-teens rate in stores — the online channel still outrunning the physical one. Store counts moved in opposite directions by brand: Coach added a net 42 stores over the year, to 973, while Kate Spade closed a net 34, ending the year at 326.

Tapestry returned $1.7bn to shareholders in fiscal 2026 — $326m in dividends and $1.35bn in buybacks — and its board approved a 16% dividend increase, putting the anticipated fiscal 2027 annual rate at $1.85 a share. For the year ahead, the company guided to revenue of $8.4bn-$8.5bn, roughly 50 basis points of operating-margin expansion, and adjusted earnings per share of $7.80-$7.90.

"Our fourth quarter outperformance capped a year of strong growth, as we meaningfully exceeded expectations and achieved key financial commitments we established at our Investor Day two years ahead of plan," Tapestry chief executive Joanne Crevoiserat said in the release.

Tapestry's release offers no explanation for Japan's decline, which is worth sitting with given the timing: this is the same year Japan's own department-store operators have been reporting strong tax-free sales growth, as a weak yen pulls in more spending from inbound tourists — the kind of tailwind that has flattered other premium and luxury retailers' Japan numbers this year. Coach's business there falling anyway, even as Greater China and the rest of Asia surged, points more toward softness among Japan's domestic shoppers than any broader retreat from the brand in the region — though without a country-level breakdown from Tapestry, that is a reasonable inference rather than a stated fact.