AI interpretation based on checked source excerpts. Issuer assertions and evidence limitations remain explicit.
Policy quality-scores-3: six equally weighted categories. The overall score requires full coverage. Missing inputs are not zero. Qualitative grades are sourced interpretations, not probabilities. 6/6 · 31/10/2026
Moat50
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
structural advantage · 3/4 · Protected brand assets, multiyear Coach sales growth and simultaneous AUR and unit growth demonstrate differentiated demand. Coach's 86.4% sales contribution makes this material to Tapestry. Margins alone do not establish the advantage.
durability · 2/4 · Legal protection and multiyear Coach growth support persistence. Kate Spade's repeated sales contraction and fiscal 2025 impairment show that brand value can erode despite protection. Exceptional durability is unproven.
customer dependency · 1/4 · Existing-customer engagement indicates attachment, but disclosed retail purchases are transactional and customer incentive programs are immaterial. The evidence supports fragile dependence without material contractual lock-in or demonstrated switching friction.
erosion resilience · 2/4 · Coach pricing offset tariff pressure in the third quarter and supported annual gross-margin improvement. Consolidated adjusted gross margin expanded, but Kate Spade sales and adjusted profitability deteriorated. Resilience is mixed across the portfolio.
Pricing power56
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
realized pricing · 3/4 · Coach reported low-double-digit handbag AUR growth with units rising more than 20% in the third quarter, followed by mid-teens AUR growth and unit growth for the full year. Reported net pricing improvements corroborate realization. Mix effects remain unquantified.
retention · 2/4 · Increased third-quarter demand from existing customers and higher full-year existing-customer engagement support repeat demand indirectly. These qualitative issuer indicators lack cohort measures, and Kate Spade's contraction limits the portfolio assessment.
margin resilience · 2/4 · Coach pricing helped absorb tariffs, while consolidated adjusted gross margin expanded 120 basis points, including a 60-basis-point divestiture benefit. Brand mix also contributed, and Kate Spade experienced tariff-related deterioration. Pricing does not explain all margin improvement.
contractual freedom · 2/4 · Controlled DTC channels generated approximately 87% of sales, supporting substantial discretion over offers and terms. Wholesale discounts may be contractual or negotiated, while markdowns generally require company approval. Detailed retail pricing restrictions are absent, so unrestricted authority is not assumed.
Predictability92
5 consecutive published annual periods. Equal weights: nondeclining revenue frequency; revenue-growth volatility (5–40pp); positive FCF frequency; FCF-margin volatility (3–20pp). Stability indicator, not a growth forecast.
- Nondeclining revenue years (%)
- 75.00
- Revenue growth volatility (pp)
- 5.83
- Positive FCF years (%)
- 100.00
- FCF margin volatility (pp)
- 4.10
- observedAnnualPeriods
- 5.00
Financial strength90
Equal-weight grades: debt/FCF (1–8x), net debt/earnings before interest and tax (0–5x), interest service (1–12x), current ratio (0.75–2x). Earnings use reported operating income, an original issuer-reported unadjusted EBIT reconciled to net income, income tax and signed net interest, or reported pretax profit plus reported gross interest expense. Reported EBIT is distinct from GAAP operating income and gross interest. Interest service uses earnings/interest expense; if unavailable, it uses reported operating cash flow/cash interest paid, without relabeling cash paid as accrued expense. Nonpositive cash flow/earnings score 0 for their service component; reported zero interest with a positive numerator scores 100. Net cash scores 100 for net leverage. Missing disclosures remain unavailable. General nonfinancial-company rubric, not a credit rating; exceptional and nonoperating gains are not normalized out. IFRS finance-cost and cash-flow classifications retain their reported scope.
- debtFcfGrade
- 95.40
- netDebtEbitGrade
- 85.15
- interestCoverageGrade
- 100.00
- currentRatioGrade
- 80.17
- Debt / FCF (x)
- 1.32
- Net debt / operating income (x)
- 0.74
- Interest coverage (x)
- 16.05
- Current ratio (x)
- 1.75
Capital allocation100
Three-year equal-weight indicators: pretax return on average invested capital (0–25%; equity + debt − cash, each year and its prior year), share-count growth (0–5%, lower better), share-based cost/revenue (2–20%, lower better), consolidated FCF/net income (0–1x). Return uses reported operating income, an original issuer-reported unadjusted EBIT reconciled to net income, income tax and signed net interest, or EBIT calculated from reported pretax profit plus reported gross interest expense; the issuer-reported EBIT is distinct from GAAP operating income and gross interest; exceptional/nonoperating gains are not normalized out. Share-based cost uses the reported cash-flow add-back or, if absent, separately reported recognized compensation expense; the latter never becomes an FCF adjustment. Nonpositive net income scores 0 for cash conversion; absent income/FCF stays unavailable. ROIC remains undefined for nonpositive invested capital; the explicit asset-return alternative does not change the ROIC chart. Missing financial inputs alone never trigger an alternative. Does not establish acquisition quality or buyback timing.
- 3-year pre-tax operating return (%)
- 44.66
- 3-year average dilution (%)
- -4.79
- 3-year average SBC / revenue (%)
- 1.28
- cashConversionGrade
- 100.00
Management63
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
capital discipline · 2/4 · Fiscal 2026 operating cash flow of $1,978.5 million exceeded $166.0 million of property and equipment purchases. Cash repurchases and dividends exceeded that difference; earlier repurchases were partly debt-funded. Fiscal 2025 failed-acquisition expenses of $268.4 million and the impairment temper the cash-generation achievement. Repurchase value creation is not established.
incentive alignment · 3/4 · Actual executive ownership compliance at December 31, 2025, capped incentives, multiyear vesting, anti-hedging and clawback provisions demonstrate a strong alignment framework. Later stricter qualifying-equity rules and the higher CEO ownership requirement are disclosed changes; earlier compliance does not prove compliance under those changes or exceptional incentive outcomes.
execution · 3/4 · Coach's 24% annual sales growth, simultaneous AUR and unit growth, higher adjusted operating income and consolidated cash generation demonstrate strong execution. Management contribution is inferred indirectly from operating outcomes. Kate Spade deterioration and failed-acquisition costs prevent an exceptional assessment.
governance · 2/4 · An independent chair and committees, annual director elections and proxy access support accountability. Board-exclusive vacancy appointments and a two-thirds director-removal threshold constrain shareholder control. Failed uncontested elections require resignation tenders, but acceptance remains discretionary. Future nominee elections are not assumed completed.
Evidence
INTELLECTUAL PROPERTY Tapestry owns COACH and KATE SPADE brand intellectual property, as well as all of the material trademark, design and patent-rights related to the production, marketing, distribution and sale of these brands' products in the United States and other countries in which our products are principally sold.
Intellectual Property · Filed 13/08/2026
This segment represented 86.4% of total net sales in fiscal 2026.
Business / Coach segment sales contribution · Filed 13/08/2026
Fiscal Year Ended
June 27, 2026
June 28, 2025
June 29, 2024
Amount
% of Total
segment net sales
Amount
% of Total
segment net sales
Amount
% of Total
segment net sales
(millions)
Coach
Handbags
$
4,016.3
58.1
%
$
3,223.3
57.6
%
$
2,889.9
56.7
%
Accessories
1,991.8
28.8
1,539.5
27.5
1,407.9
27.6
Footwear
408.5
5.9
342.5
6.1
326.0
6.4
Other
498.1
7.2
493.2
8.8
471.5
9.3
Total Coach
$
6,914.7
100.0
%
$
5,598.5
100.0
%
$
5,095.3
100.0
%
Kate Spade
Handbags
$
594.9
55.3
%
$
623.0
52.1
Business / Products / fiscal 2024–2026 Coach sales · Filed 13/08/2026
Highlights from the fiscal fourth quarter and full year 2026 included:
•
Drove strong new customer acquisition globally, welcoming over 2.5 million new consumers in Q4 and approximately 11.0 million in FY26, with approximately 35% of new customers Gen Z; at the same time, increased engagement among existing customers, reflecting broad consumer appeal and enduring customer relationships;
•
Achieved growth in the core leathergoods offering, led by strong handbag revenue gains at Coach, where handbag AUR increased at a mid-teens percentage rate in both Q4 and FY26; for the full year, leathergoods outperformance was driven by a combination of AUR and unit growth, underscoring the brand’s desirability, innovation, and value proposition while demonstrating diversified drivers of growth;
3
•
Delivered broad-based growth across key regions, gaining market share, and expanding the overall category.
Fiscal 2026 results / customer engagement and handbag AUR and units · Filed 13/08/2026
3
Highlights from the fiscal third quarter included:
•
Acquired over 2.4 million new customers globally, led by a growing number of Gen Z consumers versus prior year, which represented over 35% of new customers; further, demand from existing customers also increased, demonstrating broad-based traction and an ability to consistently attract and retain new generations of consumers in a large TAM;
•
Accelerated growth in core leathergoods offering, led by strong handbag revenue gains at Coach, where handbag units rose more than 20% and AUR increased at a low-double-digit rate; this reflects healthy and diversified drivers of growth as well as the craftsmanship and value offered to consumers at scale – a fundamental strength of the business;
•
Drove double-digit growth across key markets, outperforming expectations, highlighted by pro forma constant currency gains in North America (+20%), Europe (+21%), and total APAC (+30%), including Greater China (+55%); delivered Coach brand growth of 29% in constant currency;
•
Increased total direct-to-consumer revenue by 23% on a pro forma constant currency basis, led by strong digital growth of approximately 25% and over 20% growth in global brick and mortar sales with increasing profitability across channels, showcasing the power of Tapestry’s data-driven and agile business model.
Fiscal 2026 third-quarter results / existing-customer demand and handbag AUR and units · Filed 07/05/2026
◦Gross Margin, increased 70 basis points mainly due to net pricing improvements, partially offset by the impact of higher tariffs;
Fiscal 2026 Coach operating results / pricing and tariffs · Filed 13/08/2026
FY25 NET SALES (IN MILLIONS) FY26 NET SALES (IN MILLIONS) % CHANGE CONSTANT CURRENCY % CHANGE Coach $ 5,598.5 $ 6,914.7 24% 23% Kate Spade 1,197.1 1,074.9 (10)% (11)% Stuart Weitzman 215.1 14.6 (93)% (93)% Total Tapestry $ 7,010.7 $ 8,004.2 14% 13% Total Tapestry Pro Forma(3) $ 6,795.6 $ 7,989.6 18% 17% (1)See pages 44, 42 and 41 of the Company's Form 10-K for fiscal years 2026, 2025 and 2024, respectively, for a detailed description of certain items excluded from the non-GAAP financial measures presented in the 10-K for fiscal years 2026, 2025 and 2024.
Proxy / fiscal 2025–2026 brand sales comparison · Filed 25/09/2026
68 TAPESTRY, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS Fiscal Year Ended June 27, 2026 June 28, 2025 June 29, 2024 (millions) CASH FLOWS PROVIDED BY (USED IN) OPERATING ACTIVITIES Net income (loss) $ 1,527.7 $ 183.2 $ 816.0 Adjustments to reconcile net income to net cash provided by (used in) operating activities: Depreciation and amortization 160.8 162.9 174.0 Amortization of cloud computing arrangements 56.4 62.0 55.0 Impairment charges — 854.8 — Provision for bad debt 6.1 3.6 4.3 Loss on extinguishment of debt — 120.1 — Share-based compensation 104.5 87.3 85.9 Deferred income taxes 50.8 (139.8) 2.5 Changes to lease related balances, net (19.3) (35.0) (42.6) Other non-cash charges, net (27.7) (43.2) (7.4) Changes in operating assets and liabilities: Trade accounts receivable (12.0) 8.8 (37.3) Inventories 35.4 (108.2) 85.8 Accounts payable 131.6 (15.0) 49.1 Accrued liabilities 29.9 56.0 91.6 Other liabilities 75.8 3.9 (21.2) Other assets (141.5) 15.2 (0.1) Net cash provided by (used in) operating activities 1,978.5 1,216.6 1,255.6 CASH FLOWS PROVIDED BY (USED IN) INVESTING ACTIVITIES Purchases of investments (163.0) (1,886.4) (2,713.0) Proceeds from maturities and sales of investments 1.6 2,923.1 1,676.3 Purchases of property and equipment (166.0) (122.7) (108.9) Proceeds from sale of business, net of cash divested 109.1 — — Settlement of net investment hedge — — 103.7 Net cash provided by (used in) investing activities (218.3) 914.0 (1,041.9) CASH FLOWS PROVIDED BY (USED IN) FINANCING ACTIVITIES Payment of dividends (326.1) (299.3) (321.4) Repurchase of common stock (1,554.6) (1,718.7) — Share repurchase not yet settled — (300.0) — Proceeds from issuance of debt, net of discount — 2,248.1 6,089.5 Payment of debt issuance costs (0.5) (13.4) (78.3) Payment of debt extinguishment costs — (63.5) — Repayment of debt — (7,163.3) (468.8) Proceeds from share-based awards 118.9 156.1 27.3 Taxes paid to net settle share-based awards (81.6) (36.5) (32.7) Proceeds from revolving credit facility — 1,016.5 — Repayment of revolving credit facility (17.0) (1,000.0) — Other financing activities — (1.2) (1.2) Net cash provided by (used in) financing activities (1,860.9) (7,175.2) 5,214.4 Effect of exchange rate changes on cash and cash equivalents (24.6) 26.3 (12.2) Net increase (decrease) in cash and cash equivalents, including cash classified within assets held for sale (125.3) (5,018.3) 5,415.9 Less: net increase (decrease) in cash classified within current assets held for sale — (23.7) — Net increase (decrease) in cash and cash equivalents (125.3) (5,042.0) 5,415.9 Cash and cash equivalents at beginning of year 1,100.0 6,142.0 726.1 Cash and cash equivalents at end of year $ 974.7 $ 1,100.0 $ 6,142.0 Supplemental information: Cash paid for income taxes, net $ 200.7 $ 189.5 $ 200.1 Cash paid for interest $ 241.6 $ 394.9 $ 262.8 Non-cash investing activity – property and equipment obligations $ 35.2 $ 25.7 $ 15.1 See accompanying Notes.
Consolidated Statements of Cash Flows / fiscal 2024–2026 · Filed 13/08/2026
Excluding items affecting comparability, operating income decreased $118.5 million to a loss of $27.2 million in fiscal 2026 from income of $91.3 million in fiscal 2025; and operating margin decreased to (2.5)% in fiscal 2026 as compared to 7.6% in fiscal 2025.
Fiscal 2026 Kate Spade adjusted operating results · Filed 13/08/2026
COMPETITION
The Company faces intense competition from many other brands in the product lines and markets that we participate.
Competition · Filed 13/08/2026
In fiscal 2026, fiscal 2025 and fiscal 2024, advertising expenses for the Company totaled $962.5 million, $744.5 million and $616.8 million, respectively, and are included in SG&A expenses.
Advertising expenses / fiscal 2024–2026 · Filed 13/08/2026
Competition is based on a number of factors, including, without limitation, the following: •our competitors may develop new products or product categories that are more popular with our customers; •anticipating and responding in a timely fashion to changing consumer demands and shopping preferences, including the ever-increasing shift to digital brand engagement, social media communications, and online and cross-channel shopping; •maintaining strong brand recognition, loyalty, and a reputation for quality, including through digital brand engagement and online and social media presence; •recruiting and retaining key talent; •developing and producing innovative, high-quality products in sizes, colors, and styles that appeal to a diverse group of consumers; •competitively pricing our products and creating an acceptable value proposition for consumers, including price increases to mitigate inflationary pressures while simultaneously balancing the risk of lower consumer demand in response to any such price increases; •providing strong and effective marketing support in several diverse demographic markets, including through digital and social media platforms in order to stay better connected to consumers; •providing attractive, reliable, secure, and user-friendly digital commerce sites; •sourcing sustainable raw materials at cost-effective prices; •ensuring product availability and optimizing supply chain efficiencies with third-party suppliers and retailers; •protecting our trademarks and design patents; •identifying and adapting to changes in technology, including the successful utilization of data analytics, artificial intelligence (“AI”), and machine learning, and competing with AI-enabled shopping tools to help find products, compare prices, and make purchase decisions; •the ability to withstand prolonged periods of adverse economic conditions or business disruptions.
Competition / competitive factors and consumer preferences · Filed 13/08/2026
Fiscal Year Ended
June 28, 2025
June 29, 2024
July 1, 2023
Amount
% of Total
segment net sales
Amount
% of Total
segment net sales
Amount
% of Total
segment net sales
(millions)
Coach
Handbags
$
3,223.3
57.6
%
$
2,889.9
56.7
%
$
2,847.1
57.4
%
Accessories
1,539.5
27.5
1,407.9
27.6
1,325.7
26.7
Footwear
342.5
6.1
326.0
6.4
311.5
6.3
Other
493.2
8.8
471.5
9.3
476.1
9.6
Total Coach
$
5,598.5
100.0
%
$
5,095.3
100.0
%
$
4,960.4
100.0
%
Kate Spade
Handbags
$
623.0
52.1
%
$
721.0
54.0
%
$
779.7
54.9
%
Accessories
269.8
22.5
307.0
23.0
324.8
22.9
Footwear
55.2
4.6
57.4
4.3
57.8
4.1
Other
249.1
20.8
249.0
18.7
256.6
18.1
Total Kate Spade
$
1,197.1
100.0
%
$
1,334.4
100.0
%
$
1,418.9
100.0
%
Stuart Weitzman(1)
$
215.1
100.0
%
$
241.5
100.0
%
$
281.6
100.0
%
Tapestry
Handbags
$
3,846.3
54.9
%
$
3,610.9
54.1
%
$
3,626.8
54.4
%
Accessories
1,809.3
25.8
1,714.9
25.7
1,650.5
24.8
Footwear
612.8
8.7
624.9
9.4
650.9
9.8
Other
742.3
10.6
720.5
10.8
732.7
11.0
Total Tapestry
$
7,010.7
100.0
%
$
6,671.2
100.0
%
$
Business / Products / fiscal 2023–2025 brand sales · Filed 14/08/2025
Direct-to-Consumer
The Company recognizes revenue in its retail stores, including concession shop-in-shops, at the point-of-sale when the customer obtains physical possession of the products.
Revenue recognition / Direct-to-Consumer · Filed 07/05/2026
Certain of the Company's retail operations use sales incentive programs, such as customer loyalty programs and the issuance of coupons.
Revenue recognition / customer incentive programs · Filed 07/05/2026
These programs are immaterial individually and in the aggregate.
Revenue recognition / immateriality of incentive programs · Filed 07/05/2026
Excluding items affecting comparability, gross margin increased 120 basis points to 76.6% in fiscal 2026 from 75.4% in fiscal 2025, which includes a 60 basis point benefit from the divestiture of Stuart Weitzman.
Fiscal 2026 adjusted gross margin / divestiture contribution · Filed 13/08/2026
The remaining 60 basis point increase in Gross margin was primarily attributed to net pricing improvements and favorable brand mix, partially offset by the impact of higher tariffs.
Fiscal 2026 gross margin / pricing, brand mix and tariffs · Filed 13/08/2026
◦Gross Margin, decreased 370 basis points mainly due to the impact of higher tariffs and unfavorable channel mix, partially offset by net pricing improvements;
Fiscal 2026 Kate Spade gross margin / tariffs and channel mix · Filed 13/08/2026
This increase in operating margin was primarily attributed to: ◦Gross margin, remained even mainly due to net pricing improvements, offset by the impact of higher tariffs; ◦SG&A expenses as a percentage of net sales, decreased approximately 260 basis points mainly due to leverage of fixed costs on higher net sales, partially offset by higher marketing spend.
Fiscal 2026 third-quarter operating results / pricing offsetting tariffs · Filed 07/05/2026
DIRECT TO CONSUMER BUSINESS
Our DTC business consists of channels that provide us with immediate, controlled access to consumers.
Business / controlled Direct-to-Consumer access · Filed 13/08/2026
DTC revenues were approximately 87% of total net sales in fiscal 2026.
Business / Direct-to-Consumer revenue contribution · Filed 13/08/2026
Discounts are based on contract terms with the customer, while cooperative advertising allowances and other consideration may be based on contract terms or negotiated on a case-by-case basis.
Revenue recognition / wholesale contractual discounts · Filed 07/05/2026
Returns and markdowns generally require approval from the Company and are estimated based on historical trends, current season results and inventory positions at the wholesale locations, current market and economic conditions as well as, in select cases, contractual terms.
Revenue recognition / wholesale markdown approval · Filed 07/05/2026
During the fiscal year ended June 28, 2025, the Company incurred $268.4 million in pre-tax expenses primarily related to Loss on extinguishment of debt as a result of the redemption of the Capri Acquisition Senior Notes recorded within Loss on extinguishment of debt on the Consolidated Statement of Operations, financing-related expenses recorded within Interest expense, net on the Consolidated Statement of Operations, expense reimbursement payment made to Capri recorded within SG&A expenses on the Consolidated Statement of Operations and professional fees recorded within SG&A expenses on the Consolidated Statement of Operations.
Acquisition expenses / fiscal 2025 terminated Capri acquisition · Filed 13/08/2026
During the second quarter of fiscal 2025, the Company executed $1.00 billion of borrowings under the Existing Revolving Credit Facility used to partially fund the share repurchases under the ASR Agreements and for general corporate purposes.
Financing / borrowings partly funding accelerated repurchases · Filed 07/05/2026
As of the last measurement date (December 31, 2025), all NEOs owned the required number of shares.
Proxy / executive ownership compliance at December 31, 2025 · Filed 25/09/2026
Some of the key factors supporting the HR Committee’s conclusion that our programs do not drive inappropriate or excessive risk include capped payouts on all of our incentive plans, use of multiple, counter-balancing financial performance criteria in our AIP and Long-Term Incentive Plan, executive and independent director stock ownership and anti-hedging policies, a market-competitive weight on each component of pay, multiple-year vesting for LTI, a variety of performance metrics for PRSUs and incentive compensation clawback policies.
Proxy / incentive caps, vesting, ownership and clawbacks · Filed 25/09/2026
Among other changes, stock options no longer count toward satisfaction of the ownership requirements, and credit for unvested equity is limited to RSUs and PRSUs for which the applicable performance period has been completed.
Proxy / changes to qualifying ownership equity · Filed 25/09/2026
We also increased the CEO’s stock ownership requirement from 5x to 6x base salary.
Proxy / increased CEO ownership requirement · Filed 25/09/2026
Excluding items affecting comparability, operating income increased $600.4 million to $2.48 billion in fiscal 2026 from $1.88 billion in fiscal 2025; and operating margin increased approximately 230 basis points to 35.8% in fiscal 2026 as compared to 33.5% in fiscal 2025.
Fiscal 2026 Coach adjusted operating income · Filed 13/08/2026
•Independent Chair of the Board and Board Committees comprised solely of independent directors
Proxy / independent chair and independent committees · Filed 25/09/2026
•Demonstrated commitment to Board refreshment and rigorous director selection criteria
•Annual election of all directors
•Annual Board, Committee and director assessments, as well as annual CEO evaluation
Proxy / annual elections and board assessments · Filed 25/09/2026
•Regular executive sessions of independent directors
COMMITMENT TO STOCKHOLDER RIGHTS
•Bylaws contain proxy access provision
Proxy / proxy access · Filed 25/09/2026
The Company’s charter provides that, except as may be provided by our Board in setting the terms of any class or series of preferred stock, any vacancy on our Board may be filled only by a majority of the remaining directors, even if the remaining directors do not constitute a quorum.
Charter / board vacancy appointments · Filed 13/08/2026
The Company’s charter further provides that a director may be removed only by the affirmative vote of at least two-thirds of the votes entitled to be cast generally in the election of directors.
Charter / director removal threshold · Filed 13/08/2026
Under our Corporate Governance Principles, a director nominee, running uncontested, who does not receive a majority of the votes cast, is required to tender his or her resignation for consideration by the GN Committee.
Proxy / resignation requirement after failed uncontested election · Filed 25/09/2026
The GN Committee will recommend to the Board whether to accept or reject the resignation.
Proxy / discretion to accept or reject director resignation · Filed 25/09/2026
