The news: Ralph Lauren and Tapestry both raised guidance after delivering stronger-than-expected holiday results, signaling confidence that their momentum can carry forward despite a challenging consumer backdrop.

• Ralph Lauren expects high-single- to low-double-digit revenue growth on a constant-currency basis in FY2026, up from prior guidance of 5% to 7%. It forecast operating margin expansion of 100 to 140 basis points, versus its earlier outlook of 60 to 80 basis points.
• Tapestry lifted its revenue forecast to $7.75 billion, implying an 11% gain, topping both consensus and its prior guidance. It also now expects operating margin expansion of roughly 180 basis points, well above its earlier estimate of about 50 basis points.

By contrast, Capri Holdings delivered a more muted update. While the owner of Michael Kors and Jimmy Choo swung to a fiscal Q3 profit following the sale of Versace, it narrowed its FY2026 revenue outlook to $3.45 billion to $3.475 billion—from its prior range of $3.375 billion to $3.45 billion—signaling a slower path back to growth.

Why this is happening: Ralph Lauren and Tapestry are signaling that their holiday strength is durable thanks to their efforts to elevate their brands, boosting their pricing power.

• Ralph Lauren grew revenues 10% on a constant-currency basis and expanded gross margin by 150 basis points, leaning into trends like preppy revival and “quiet luxury.” It boosted its marketing spend to 8% of Q3 sales to showcase the brand through expanded holiday and localized activations.
• Tapestry posted 18% pro forma revenue growth and nearly 400 basis points of margin expansion. Those gains were fueled by a 40% YoY increase in marketing spend that shifted dollars toward top-of-funnel brand building. That strategy paid off most clearly at Coach, which grew revenues 25% on a constant-currency basis and added 2.9 million new customers, driven by strong product hits like the Tabby bag and its “The Gift for New Adventures” holiday campaign.
• Capri’s results, meanwhile, highlight the limits of balance-sheet fixes without a clear growth engine. While the Versace sale restored profitability, Michael Kors revenues fell 5.6%, leaving the company in a reset phase as it targets a return to growth in FY2027.

The implications for retailers and brands: In a challenging environment in which we expect personal luxury sales to grow just 1.0% this year, brands have to earn consumer spending. That increasingly means investing in marketing and brand building, not just leaning on promotions or financial engineering, to persuade shoppers to open their wallets. When done well—as Ralph Lauren and Tapestry show—those investments can deliver real gains in demand, pricing power, and customer growth.