Coach (COH) Reports In-Line Q1 EPS; Maintains Outlook

Coach (NYSE: COH) reported Q1 EPS of $0.45, in-line with the analyst estimate of $0.45. Revenue for the quarter came in at $1.04 billion versus the consensus estimate of $1.07 billion.Coach reaffirmed FY2017 guidance.

Coach Brand North America Comparable Store Sales Increased 2% in the First Quarter.

Victor Luis, Chief Executive Officer of Coach, Inc., said, “We are pleased with our performance in the quarter, highlighted by continued positive comparable store sales in North America and growth internationally. We remained focused on elevating the perception of the Coach brand through compelling product, differentiated store environments and emotional marketing. At the same time, we implemented the strategic actions necessary to reposition the brand and streamline our distribution in the promotional North American department store channel. Despite this deliberate pullback, we achieved growth across key financials, including sales, gross profit and operating income, as well as double-digit earningsgrowth.”

Fiscal Year 2017 Outlook:

The following fiscal 2017 guidance is provided on a non-GAAP, 52-week basis versus 52-week basis.

The Company is maintaining its fiscal 2017 outlook as outlined in August.

The Company continues to expect 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.

In addition, the Company is maintaining its operating margin forecast for Coach, Inc. of between 18.5-19.0% for fiscal 2017. This guidance incorporates the negative impact of both Stuart Weitzman and the strategic decision to elevate the Coach brand’s positioning in the North American wholesale channel, including a reduction in promotional events and the closure of about 25% of doors.

Interest expense is still expected to be in the area of $25 million for the year while the full year fiscal 2017 tax rate is projected at about 28%.

Taken together, the Company continues to project double-digit growth in both net income and earnings per diluted share for the year.

For earnings history and earnings-related data on Coach (COH) click here.

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