Coach Second Quarter Earnings Sneak Peek

S&P 500 (NYSE:SPY) component Coach (NYSE:COH) will unveil its latest earnings tomorrow, Wednesday, January 23, 2013. Coach is an American marketer of accessories and gifts, including handbags, footwear, sunwear, travel bags, business cases, jewelry, clothing, fragrance, and watches.

Coach Earnings Preview Cheat Sheet

Wall St. Earnings Expectations: The average analyst estimate is for profit of $1.29 per share, a rise of 9.3% from the company’s actual earnings for the year-ago quarter. The average estimate is the same as three months ago. Between one and three months ago, the average estimate was unchanged. It also has not changed during the last month. Analysts are projecting profit to rise by 9.6% versus last year to $3.87.

Past Earnings Performance: Last quarter, the company beat estimates by 2 cents, coming in at net income of 77 cents a share versus the estimate of profit of 75 cents a share. It marked the fourth straight quarter of beating estimates.

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Stock Price Performance: Between November 16, 2012 and January 16, 2013, the stock price had risen $6.47 (11.9%), from $54.53 to $61. The stock price saw one of its best stretches over the last year between July 31, 2012 and August 8, 2012, when shares rose for seven straight days, increasing 14.3% (+$7.05) over that span. It saw one of its worst periods between May 2, 2012 and May 15, 2012 when shares fell for 10 straight days, dropping 11.1% (-$8.36) over that span.

Wall St. Revenue Expectations: Analysts predict a rise of 10.3% in revenue from the year-earlier quarter to $1.6 billion.

A Look Back: In the first quarter, profit rose 3% to $221.4 million (77 cents a share) from $215 million (73 cents a share) the year earlier, exceeding analyst expectations. Revenue rose 10.6% to $1.16 billion from $1.05 billion.

Here’s how Coach traded following its last earnings report 3 months ago and leading up to its upcoming earnings report this week:

COH

Key Stats:

The company enters this earnings announcement with substantial revenue momentum. The company has averaged year-over-year revenue growth of 13.4% over the last four quarters.

After experiencing income increases the last three quarters, the company is hoping to keep the good news coming with this earnings announcement. Net income rose 21% in the third quarter of the last fiscal year and 24.2% in the fourth quarter of the last fiscal year before increasing again in the first quarter.

Analyst Ratings: With 16 analysts rating the stock a buy, none rating it a sell and eight rating the stock a hold, there are indications of a bullish stance by analysts.

Balance Sheet Analysis: The company’s current ratio of assets to liabilities came in at 2.42 last quarter. Having a ratio above 2:1 is usually considered a good indicator of a company’s liquidity and ability to meet creditor demands. The company regressed in this liquidity measure from 2.51 in the fourth quarter of the last fiscal year to the last quarter driven in part by a decrease in current assets. Current assets decreased 2% to $1.77 billion while liabilities rose by 1.8% to $730.9 million.

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