Question · Q1 2026
Adrian Yee of Barclays asked about Coach's significant inflection in the European market, seeking insights into brand positioning, engagement with younger audiences, marketing spend, and penetration potential. He also inquired about Kate Spade's merchandise margin progress, excluding tariff impacts, and any stabilization in promotional activity.
Answer
Coach CEO Todd Kahn attributed Coach's 39% growth in Europe to its global value proposition and purpose campaigns, focusing on customer acquisition, youth appeal, and strategic store openings beyond traditional high streets. CFO Scott Roe explained that Kate Spade's margin pressure stems from tariffs (disproportionately impacting the brand) and strategic investments in customer engagement, with efforts to reduce discounting impacting the top line but aiming for long-term growth.