Tapestry (NYSE: TPR) has lifted its full year revenue guidance to approximately $7.95 billion after delivering a standout third quarter that beat analyst expectations across almost every metric, with its Coach brand doing the vast majority of the heavy lifting.

The company reported third quarter net sales of $1.92 billion, representing a 21% increase year over year. Coach grew 31% to $1.70 billion and now accounts for roughly 89% of group revenue. The numbers are remarkable in the context of a broader luxury sector that has spent much of 2026 issuing cautious guidance and blaming geopolitical headwinds.

This marks the third consecutive quarter in which Tapestry has raised its annual outlook, beating analyst revenue estimates of $1.79 billion and posting adjusted earnings of $1.66 per share, well above forecasts. Full year guidance now stands at approximately $7.95 billion in revenue and $6.95 in adjusted earnings per share, up from a prior range of $7.75 billion and $6.40 to $6.45.

The geographic picture tells an equally striking story. Greater China revenue surged 61% to $432.2 million in the quarter, making it the strongest region in the portfolio by a wide margin. Europe posted 31% growth, Other Asia led by South Korea and Australia rose 24%, and North America climbed 20% to roughly $1.1 billion. At a time when European luxury houses have repeatedly flagged China as a drag on performance, Tapestry appears to be operating in an entirely different market reality.

The engine behind Coach’s momentum is a well documented shift in how the brand reaches younger consumers. The Tabby bag series, combined with an aggressive social media strategy across TikTok and Pinterest, has positioned Coach firmly within the Gen Z conversation without abandoning the core leather goods customer. Over 80% of Coach sales come from the high margin bags and leather goods category, and the brand’s margins have now reached levels comparable to the best European luxury players despite a more accessible price positioning.

Kate Spade remains the group’s problem child. The brand posted a 10% revenue decline in the quarter, and with Stuart Weitzman divested in August 2025, Tapestry is now effectively a two brand company moving at very different speeds. Management has outlined a repositioning plan for Kate Spade focused on reinforcing its luxury credentials and concentrating on handbag blockbusters, though results have yet to follow.

The broader contrast with European luxury is hard to ignore. Five years ago Kering was worth more than ten times Tapestry by market capitalisation. Today the gap has narrowed to roughly ten billion dollars, with Tapestry sitting at around $27 billion against Kering’s $36 billion. The company has also set a long term ambition to grow Coach into a $10 billion brand on its own, a target that looked ambitious eighteen months ago and looks considerably more credible today.