Published: Wed, August 10, 2016
Economy | By Melissa Porter

Coach's String Of Positive Earnings Surprises Continues

Coach's String Of Positive Earnings Surprises Continues

Coach, Inc. (COH) said that it projects double-digit growth in both net income and earnings per share for fiscal 2017. Those results topped estimates for earnings per share of 41 cents.

In addition, Coach's subsidiary brand Stuart Weitzman brand, which was acquired past year, brought $84 million to the total sales this quarter, up from $79 million in the previous three months.

Quarterly sales rose 15% to $1.15 billion in the fourth quarter.

"We had 15% growth driven by the 2% North American comp (comparable store sale) growth".

Coach CEO Victor Luis made note of that in a statement, saying,"W$3 e elevated brand perception globally". "I could not be more pleased with and proud of our teams execution of the transformation plan over the last two years as we track to our goals in spite of the significant and unanticipated volatility in tourist spending flows as well as the range of macroeconomic, geopolitical and promotional headwinds".

Coach Inc. reported strong demand for higher-priced handbags at its retail stores and said it would slash its business with department stores, as the fashion company works to wean customers off discounts.

Michael Kors
Image courtesy of Michael Kors

In addition to management changes, Luis said he has plans to launch global flagships for the brand.

Back on 8/4/2015 the company's estimated EPS value was $0.29 and it reported $0.31 earnings per share (EPS) for the quarter ended on 6/2015.

Sales from the Coach brand rose 11% YoY to $1.07 billion during the period. Stuart Weitzman sales came in at $84 million, above the FactSet consensus of $81.6 million. This included a contribution of $33 million, or $12 cents per share, from Stuart Weitzman.

Coach said it will close about 25% of its wholesale stores - sometimes called factory outlets - in North America as part of "the strategic decision to elevate the Coach brand's positioning".

The Company expects revenues for fiscal 2017 to increase by low-to-mid single digits, including an expected benefit from foreign currency of approximately 100-150 basis points based on current exchange rates. Coach Inc makes up approx 0.08% of Mitsubishi Ufj Kokusai Asset Management Ltd.'s portfolio.Anchor Capital Advisors reduced its stake in COH by selling 89,700 shares or 90.61% in the most recent quarter.

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