Coach Inc. Earnings Cheat Sheet: Powering Ahead

S&P 500 (NYSE:SPY) component Coach Inc. (NYSE:COH) reported its results for the first quarter. Coach is an American marketer of accessories and gifts, including handbags, footwear, sunwear, travel bags, business cases, jewelry, clothing, fragrance, and watches.

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Coach Earnings Cheat Sheet for the First Quarter

Results: Net income for Coach Inc. rose to $215 million (73 cents per share) vs. $188.9 million (63 cents per share) in the same quarter a year earlier. This marks a rise of 13.8% from the year earlier quarter.

Revenue: Rose 15.2% to $1.05 billion from the year earlier quarter.

Actual vs. Wall St. Expectations: COH beat the mean analyst estimate of 70 cents per share. It beat the average revenue estimate of $1.02 billion.

Quoting Management: Lew Frankfort, Chairman and Chief Executive Officer of Coach, Inc., said, “Our strong results this quarter once again reflect the strength of our brand proposition and the vitality of the category, as our customers look to update their wardrobes through our lifestyle accessories offering. In North America, we are continuing to grow our share of an expanding market, while in developing geographies we are leveraging the inherent opportunity, investing in distribution and marketing initiatives. Given the current momentum of our business, strength of our product pipeline, breadth of our assortment and shoppers’ strong interest in accessories for gifts and self-purchase, Coach is clearly well positioned for another excellent holiday season.”

Key Stats:

The company has now seen net income rise in three straight quarters. In the fourth quarter of the last fiscal year, net income rose 3.6% and in the third quarter of the last fiscal year, the figure rose 18%.

The company has now topped analyst estimates for the last four quarters. It beat the mark by 3 cents in the fourth quarter of the last fiscal year, by 2 cents in the third quarter of the last fiscal year, and by 3 cents in the second quarter of the last fiscal year.

Gross margin shrank 1.4 percentage points to 72.8%. The contraction appeared to be driven by increased costs, which rose 21.3% from the year earlier quarter while revenue rose 15.2%.

Revenue has risen the past four quarters. Revenue increased 8.5% to $1.03 billion in the fourth quarter of the last fiscal year. The figure rose 14.5% in the third quarter of the last fiscal year from the year earlier and climbed 18.7% in the second quarter of the last fiscal year from the year-ago quarter.

Looking Forward: Expectations for the company’s next quarter performance are higher than they were ninety days ago. Over the past three months, the average estimate for the second quarter has risen to $1.14 per share from $1.11. The average estimate for the fiscal year is $3.40 per share, a rise from $3.30 ninety days ago.

Competitors to Watch: Frederick’s of Hollywood Group Inc. (AMEX:FOH), Vera Bradley, Inc. (NASDAQ:VRA), Tiffany & Co. (NYSE:TIF), Fossil, Inc. (NASDAQ:FOSL), Piquadro S.p.A. (NYSE:PQ), Liz Claiborne, Inc. (NYSE:LIZ), Guess?, Inc. (NYSE:GES), Polo Ralph Lauren Corp. (NYSE:RL), Wet Seal (NASDAQ:WTSLA), and Limited Brands (NYSE:LTD).

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(Source: Xignite Financials)

 

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