Tapestry (TPR) Q1 2026 earnings

Chipotle and Cava pinned weaker gross sales on youthful prospects who’re pulling again and packing lunches.

However Gen Z consumers are nonetheless spending on Coach purses to convey to work — even when they’re skipping bowls and burritos.

Coach’s dad or mum firm, Tapestry, raised its full-year outlook Thursday, after beating Wall Avenue’s expectations for quarterly earnings and income and posting double-digit gross sales beneficial properties in North America.

In an interview with CNBC, Tapestry CEO Joanne Crevoiserat mentioned the corporate’s gross sales within the quarter had been fueled by attracting new prospects, significantly inside Gen Z.

Tapestry, which additionally consists of Kate Spade, acquired greater than 2.2 million new prospects globally in its fiscal 2026 first quarter, pushed by development in Gen Z shoppers in contrast with the prior 12 months. The corporate mentioned that era, which is usually outlined as spanning in age from roughly 13 to 29, accounted for about 35% of latest prospects.

“The Gen Z shopper, particularly, is extremely vogue engaged, spending barely extra of their finances on vogue,” she mentioned.

Crevoiserat added these youthful prospects have a excessive retention fee, “possibly busting a fable that these prospects, Gen Z prospects, aren’t sticky or loyal.”

This is what the corporate reported for the fiscal first quarter in contrast with what Wall Avenue anticipated, in line with a survey of analysts by LSEG:

• Earnings per share: $1.38 adjusted vs. $1.26 anticipated
• Income: $1.70 billion vs. $1.64 billion anticipated

Tapestry’s internet earnings within the three-month interval that ended Sept. 27 rose to $274.8 million, or $1.28 per share, in contrast with $186.6 million, or 79 cents per share, within the year-ago interval. Income rose from $1.51 billion a 12 months earlier. Adjusting for one-time gadgets, together with curiosity bills, Tapestry reported adjusted earnings per share of $1.38.

It hiked its full-year outlook for each gross sales and income, saying it now expects income round $7.3 billion for the 12 months, which might be 4% or 5% development from the prior 12 months, in contrast with its earlier expectations of almost $7.2 billion. For earnings per diluted share, it now expects a spread of $5.45 to $5.60, larger than its prior steering of $5.30 to $5.45.

Regardless of the raised forecast and better-than-expected quarterly outcomes, Tapestry’s shares fell greater than 9% on Thursday.

With its Gen Z power, Tapestry defied another corporations’ assessments on the well being of youthful consumers.

Cava noticed demand among the many 25- to 34-year-old shoppers fall because the fast-casual chain entered its present quarter, CFO Tricia Tolivar mentioned in an interview with CNBC. She attributed a pullback to youthful diners’ larger unemployment fee, their higher probability of dealing with the scholar mortgage repayments that resumed within the spring and tariffs creating “an total fog for the buyer.”

Chipotle’s CEO, Scott Boatwright, equally mentioned the chain is seeing youthful diners go to much less continuously, particularly these between the ages of 25 and 35 years previous.

And a few vacation forecasts have additionally mirrored a predicted drop in spending by Gen Z. In accordance with consulting agency PwC’s vacation survey, Gen Z plans to chop common vacation spending essentially the most amongst generations surveyed in contrast with the year-ago interval — with respondents in that age group saying they plan to spend 23% much less.

Deloitte discovered an analogous development, with Gen Z shoppers saying in its separate survey that they plan to spend a mean of 34% much less this vacation season than a 12 months in the past. Weak point carried into the subsequent oldest era, as millennials — respondents between ages 29 and 44 within the ballot — mentioned they anticipate to spend a mean of 13% much less this vacation season.

— CNBC’s Amelia Lucas contributed to this report.

Correction: Tapestry reported income of $1.70 billion. An earlier model misstated the determine.