By Nicholas G. Miller

Tapestry raised its fiscal-year outlook as Gen Z customers continue to flock to its Coach handbags.

In its fiscal second quarter, the company acquired 3.7 million new customers globally, one-third of which were Gen Z customers, a group Tapestry has been actively targeting. "This continues to be central to our healthy top line growth, as engaging consumers earlier in their purchase journey enhances repeat purchasing and lifetime value over time," said Chief Executive Joanne Crevoiserat in the company's earnings call.

The Coach brand gained a record 2.9 million new customers and executives said that the popularity of the brand among Gen Z is influencing other generations. "Not only are we winning with them, but they provide our brand with a heat halo that positively affects all other ages," said Coach Brand President Todd Kahn, adding that the company would also soon start targeting Gen Alpha.

The company said the brand is growing market share, driven primarily by its core leather goods products, with marketing investments and new products successfully attracting younger consumers.

The company said it expected Coach would sustain its growth through continued marketing investments targeting Gen Z, new product releases and customer retention of the Gen Z customers it has acquired. Returning customers often buy more expensive bags than their first purchase, Kahn said.

Shares rose 6.5% to $138.38 and are up 89% over the past 12 months.

The company said it was also making progress in the turnaround of its Kate Spade brand, which, despite sales declines due to a pullback in promotions, saw an improvement in Gen Z customer acquisition trends.

The company now expects fiscal 2026 revenue of more than $7.75 billion, up from its prior guidance of about $7.3 billion. It also forecast 2026 earnings of $6.40 to $6.45 a share, up from its previous guidance of $5.45 to $5.60 a share. Analysts see fiscal 2026 revenue of $7.4 billion and earnings of $5.55 a share.

For its fiscal second quarter, the company posted net income of $561.3 million, or $2.68 a share, up from $310.4 million, or $1.38 a share, the year prior.

Adjusted earnings were $2.69 a share. Analysts polled by FactSet had expected $2.22 a share.

Net sales rose 14% to $2.5 billion, beating Wall Street's forecast of $2.32 billion. Coach sales rose 25% to $2.14 billion, while Kate Spade sales fell 14% to $360 million.

Write to Nicholas G. Miller at nicholas.miller@wsj.com.

(END) Dow Jones Newswires

February 05, 2026 10:05 ET (15:05 GMT)

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