Coach Inc. Earnings: Profit Increases Again

S&P 500 (NYSE:SPY) component Coach Inc. (NYSE:COH) reported its results for the second 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 Second Quarter

Results: Net income for Coach Inc. rose to $347.5 million ($1.18 per share) vs. $303.4 million ($1 per share) in the same quarter a year earlier. This marks a rise of 14.5% from the year earlier quarter.

Revenue: Rose 14.6% to $1.45 billion from the year earlier quarter.

Actual vs. Wall St. Expectations: COH beat the mean analyst estimate of $1.15 per share. Analysts were expecting revenue of $1.43 billion.

Quoting Management: Lew Frankfort, Chairman and Chief Executive Officer of Coach, Inc., said, “We’re very pleased with the strong sales and earnings growth we achieved once again this holiday quarter. Our performance reflected the strength of our franchise, our broad and diversified product platform and our multichannel, international distribution model.”

Key Stats:

The company has now seen net income rise in three straight quarters. In the first quarter, net income rose 13.8% and in the fourth quarter of the last fiscal year, the figure rose 3.6%.

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

Gross margin shrank 0.2 percentage point to 72.2%. The contraction appeared to be driven by increased costs, which rose 15.5% from the year earlier quarter while revenue rose 14.6%.

Revenue has risen the past four quarters. Revenue increased 15.2% to $1.05 billion in the first quarter. The figure rose 8.5% in the fourth quarter of the last fiscal year from the year earlier and climbed 14.5% in the third quarter of the last fiscal year from the year-ago quarter.

Looking Forward: Analysts have a more positive outlook for the company’s next quarter performance. Over the past month, the average estimate for the third quarter has gone up from 73 cents per share to 74 cents. Over the past three months, the average estimate for the fiscal year has climbed from $3.40 per to share to $3.45.

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

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(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

To contact the reporter on this story: Derek Hoffman at staff.writers@wallstcheatsheet.com

To contact the editor responsible for this story: Damien Hoffman at editors@wallstcheatsheet.com