Tapestry's second quarter was marked by steady top-line growth and improved profitability, but the market responded negatively as investors weighed future risks and moderating growth expectations. Management attributed the revenue gains to strong customer acquisition, particularly among Gen Z consumers, and continued traction in the core leather goods segment. CEO Joanne Crevoiserat emphasized the company's "intentional choices, disciplined execution and a deep understanding of the consumer" as key drivers behind the quarter's performance. Expanded direct-to-consumer efforts and a focus on product innovation also contributed to the healthy operating margin improvement.

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Tapestry (TPR) Q2 CY2026 Highlights:

• Revenue:$1.88 billion vs analyst estimates of $1.88 billion (8.9% year-on-year growth, in line)

• Adjusted EPS:$1.32 vs analyst estimates of $1.28 (3.4% beat)

• Adjusted EBITDA:$407.2 million vs analyst estimates of $382.8 million (21.7% margin, 6.4% beat)

• Adjusted EPS guidance for the upcoming financial year 2027is $7.85 at the midpoint, in line with analyst estimates

• Operating Margin:23.6%, up from -33.9% in the same quarter last year

• Locations:1,299 at quarter end, down from 1,371 in the same quarter last year

• Constant Currency Revenuerose 11% year on year (8% in the same quarter last year)

While we enjoy listening to the management's commentary, our favorite part of earnings calls is the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.

Our Top 5 Analyst Questions From Tapestry's Q2 Earnings Call

• Matthew Boss (JPMorgan)asked about the moderation in full-year growth guidance compared to Q1 strength. CEO Joanne Crevoiserat stressed that growth is compounding from a higher base, and the outlook balances momentum with prudent planning.

• Alex Straton (Morgan Stanley)questioned the mix of unit versus average unit retail (AUR) growth. Coach CEO Todd Kahn said the strategy is to prioritize quality sales, with AUR and unit increases expected, and no need for heavy discounting to drive volumes.

• Irwin Boruchow (Wells Fargo)inquired about North America normalization and category growth. Kahn responded that growth will be intentional and margin-accretive, with a focus on expanding customer base without eroding brand equity.

• Michael Binetti (Evercore)asked for clarification on gross margin expectations and the impact of tariffs. CFO Scott Roe explained that structural drivers—brand strength, AUR, and international mix—remain supportive, with some quarterly lumpiness due to tariff effects.

• Robert Drbul (BTIG)requested more detail on international strategy in Europe and China. Crevoiserat and Kahn highlighted ongoing under-penetration, strong local demand, and increased marketing as levers for future growth.