Coach's parent company, Tapestry, reported first-quarter financial results and raised its full-year forecast, as the handbag brand attracts younger buyers and increasingly benefits from rising consumer incomes. During the quarter, the company gained 2.6 million new customers, and 35 percent of them belong to Generation Z.
Tapestry's adjusted revenue grew 12 percent and exceeded analysts' expectations. Coach posted 16 percent growth in constant currency, while Kate Spade's sales fell 10 percent compared with the previous year. CEO Joanna Coles raised the full-year forecast, and the company attributes the growth to a strategy called Amplify. According to the company's logic, this strategy is meant to deliver growth not only from a single segment but also through an expanding customer base.
The structure of the growth looks as follows: average prices for Coach handbags rose by low double-digit percentages, while the number of bags sold increased only slightly. In other words, the main contribution to revenue came from higher prices rather than a mass increase in sales volume. Tapestry's management argues that this growth reflects steady consumer demand rather than short-term hype, and links it to an increasingly affluent customer base.
One factor has been the brand's spread on social media. Gen Z videos on TikTok and other platforms showcase Coach bags and leather goods, and one video from a content creator garnered 472,000 views. Buyers describe the bags as affordable luxury, meaning high-end products that cost relatively little compared with competitors. Separately, store salespeople built their own audiences when they shared products while working, and this effect became another channel through which the brand reaches young people.
The company has also worked with well-known figures, including Elle Fanning, Tyla and Chung So-young. They appear in brand campaigns designed to attract younger consumers. Tapestry links its success precisely to the change in its audience: new customers are coming to the brand while older loyal buyers remain. For a brand that many people regarded as old-fashioned just a few years ago, this dynamic represents a notable turnaround.
The results also show that one line of the brand does not necessarily drive the entire portfolio. While Coach grew, Kate Spade lost sales, and this contrast became one of the most striking elements of the report. The raised annual forecast means management sees continued demand, but the report contains no details indicating how long this trend will last beyond the current quarter.