Tapestry, Inc. (NYSE:TPR) shares are trading higher on Friday.

On Thursday, the parent of Coach and Kate Spade posted fourth-quarter adjusted earnings of $1.04 per share, ahead of the $1.02 consensus, on revenue of $1.72 billion, up 8% year-over-year and above expectations.

Coach saw strong handbag revenue growth, driven by a mid-teens AUR gain for the quarter and a low-double-digit gain for the year.

Also Read: Why Tapestry Stock Is Cooling Off Despite Coach’s Hot Streak

This reflects compelling innovation and broad-based traction across its leather goods offerings.

Telsey Advisory Group analyst Dana Telsey reiterated the Outperform rating on the stock, with a price forecast of $125.

For fiscal 2026, Tapestry expects revenue to approach $7.2 billion compared to the $6.96 billion estimate, reflecting low-single-digit growth from last year.

Telsey noted that the earnings outlook factors in some current mitigation efforts, but believes the company has more options to drive upside, making the guidance appear prudently conservative.

The firm expressed optimism over what seems to be a “strong start to fiscal year 2026” and said the higher dividend boosts confidence ahead of the September 10 Investor Day, where an updated strategy and long-term outlook are expected.

Tapestry is seeing more tariff pressure than anticipated, with the early end of the de minimis exemption adding to the impact, creating a combined $160 million profit hit, or 230 bps on margins, after mitigating 30% of a $235 million run rate.

This equates to a 60-cent EPS drag, most of which was not in place last quarter. The exemption, once expected to end in 2027, was cut short by executive order. By fiscal year 2027 to fiscal year 2028, mitigation efforts are expected to aid gross margins.

For fiscal year 2026, the analyst now projects revenue of $7.24 billion, up 3.2% from its prior $6.99 billion estimate, above the $7.16 billion consensus and in line with guidance of “approaching $7.2 billion,” expecting Coach to outperform and Kate Spade to underperform earlier forecasts.

Price Action: TPR shares are trading higher by 3.72% to $99.25 at last check Friday.

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