Tapestry Inc. (NYSE:TPR) stock traded higher Thursday after the luxury accessories company reported better-than-expected fiscal first-quarter 2027 results and raised its full-year outlook.

Strong Coach sales, higher margins and resilient U.S. consumer demand helped drive the results. The company also benefited from strong growth in China and reduced promotional activity.

Tapestry Beats Earnings and Revenue Estimates

Tapestry reported adjusted earnings of $1.82 per share, beating Wall Street's estimate of $1.57.

Revenue reached $1.894 billion, topping the $1.860 billion estimate.

Adjusted gross margin expanded 220 basis points to 78.7%. Lower tariffs and duties contributed 70 basis points to the improvement.

Adjusted operating income rose 24% to $439 million. Adjusted operating margin expanded 230 basis points to 23.2%.

Coach revenue climbed 16% to $1.661 billion, while Kate Spade sales fell 10% to $233 million.

Coach Sees Strong Demand As Discounts Ease

Tapestry added 2.6 million new customers globally, with Gen Z accounting for about 35%.

CEO Joanne Crevoiserat said U.S. consumer demand remained resilient despite economic uncertainty, with Coach seeing strength across generations and income groups.

Crevoiserat cited industry forecasts for mid-single-digit U.S. retail sales growth during the holiday season and expressed confidence in Coach's momentum.

Coach CEO Todd Kahn said the brand plans to limit holiday promotions while emphasizing handbags priced between $200 and $500.

On a constant-currency basis, Greater China sales surged 39%, while Europe grew 22%. Other Asia sales increased 23%, while Japan returned to growth with a 4% increase.

Tapestry Raises Fiscal 2027 Forecast

Tapestry raised its fiscal 2027 adjusted earnings forecast to $8.25-$8.35 per share from $7.80-$7.90, above the $7.96 estimate.

The company also increased its revenue forecast to $8.5 billion-$8.6 billion from $8.4 billion-$8.5 billion. Analysts expect $8.538 billion.

Tapestry expects adjusted free cash flow to approach $1.7 billion.

The company plans to return about $2 billion to shareholders, including $1.7 billion through share repurchases.

For the fiscal second quarter, Tapestry expects constant-currency revenue growth of 5% to 6% and adjusted earnings of about $3.05 per share.

However, Tapestry expects uneven quarterly profitability due to economic uncertainty, changing tariff conditions and the timing of investments.

TPR Price Action: Tapestry shares were up 6.23% at $133.12 at the time of publication on Thursday, according to market data.