Tapestry thinks it’s cracked the code of ‘expressive luxury’ for Gen Z: a ‘Goldilocks’ combo of aspirational and approachable

Tapestry has a theory about why Gen Z keeps buying Coach bags: The brand is just fancy enough to feel like an achievement, and just affordable enough to actually be one. “Our price and brand positioning of expressive luxury is truly the Goldilocks of brand positioning in our industry,” Todd Kahn, CEO and brand president of Coach, told analysts on Wednesday. “On the one hand, we’re aspirational in design, fashion, and quality, yet extremely approachable in price positioning.” The results suggest the formula is working. Tapestry, the luxury accessories conglomerate that also owns Kate Spade, reported a record third fiscal quarter on Wednesday, with pro forma revenue up 23% year-over-year, operating margin expanding 490 basis points, and earnings per share surging 62% to $1.66—all beating guidance. The company raised its full-year outlook, now targeting $7.95 billion in revenue and EPS of $6.95, representing 35% earnings growth. Coach, the engine of it all, posted constant currency revenue growth of 29%. North America rose 27%. Greater China surged 58%. Europe climbed 27%. The brand welcomed 2 million new customers in the quarter alone, with Gen Z acquisition accelerating “meaningfully,” according to CEO Joanne Crevoiserat. “We can literally add millions of new customers every quarter for the next 10 years, and we’ll just scratch the surface,” Kahn said. The first-bag moment At the heart of Tapestry’s growth thesis is a bet on what executives call the “first luxury bag” milestone—the idea that Coach can own the emotional and commercial moment when a young consumer makes their inaugural foray into luxury goods. “When we talk to consumers, we hear stories over and over and over again about remembering their purchase of the first bag and how important that milestone is in their life,” Crevoiserat said. “We want to earn the right to be our consumer’s first luxury bag purch