Tapestry (COY) AI Stock Analysis

Company Guidance

For fiscal 2027, guidance is provided on a non-GAAP and comparable 52-week versus 52-week basis, with revenue of $8.5 billion to $8.6 billion, representing 6% to 7% growth on a constant currency basis, an FX 30 basis point tailwind, North America revenue increasing low single digits with Coach up mid-single digits, Europe and Greater China growing mid-teens, Japan returning to growth of low single digits, Other Asia growing low double-digit, high single-digit growth at Coach and a high single-digit decline at Kate Spade, operating margin expansion of approximately 100 basis points to more than 24%, gross margin increasing by approximately 80 basis points, a low to mid-20s percent tariff rate on U.S. imports, approximately 20 basis points of SG&A leverage, Coach operating margin of approximately 36%, a modest operating loss at Kate Spade, net interest expense of approximately $60 million, a tax rate of approximately 18%, weighted average diluted share count of approximately 200 million, EPS of $8.25 to $8.35 representing 17% to 18% growth, adjusted free cash flow to approach $1.7 billion, CapEx and cloud computing costs in the area of $300 million or 3% to 4% of revenue, approximately 70% of spend related to growing and enhancing the fleet, approximately $2 billion returned to shareholders including $1.7 billion in share repurchases and an expected annual dividend of $1.85 per share, and the 53rd week contributing approximately 1 percentage point of annual revenue growth with a neutral impact on operating margin; Q2 guidance is revenue growth of 5% to 6% on a constant currency basis, nominal revenue growth of approximately 6% including an expected FX tailwind of 70 basis points, high single-digit growth at Coach, mid-single-digit growth in North America, mid-teens growth internationally, total Coach sales growth in the mid-30% range on a 2-year basis, a low double-digit decline at Kate Spade, gross margin increasing by 170 basis points, SG&A increasing by roughly 120 basis points, operating margin expansion of 50 basis points, and EPS of approximately $3.05 representing low teens growth; for the second half of the year, revenue growth is expected to be mid-single-digit and EPS growth low-teens, with Q4 outpacing Q3.