Coach (COH) Tops Q2 EPS by 6c

Coach (NYSE: COH) reported Q2 EPS of $0.72, $0.06 better than the analyst estimate of $0.66. Revenue for the quarter came in at $1.22 billion versus the consensus estimate of $1.23 billion.

On a constant currency basis sales declined 12% for the quarter. Net income for the period totaled $200 million, with earnings per diluted share of $0.72, excluding transformation-related charges and acquisition costs. Reported net income totaled $183 million, with earnings per diluted share of $0.66. This compared to net income of $297 million and earnings per diluted share of $1.06 in the prior year’s second quarter.

Second fiscal quarter sales results in each of Coach’s segments were as follows:

• Total North American sales decreased 20% to $785 million from $983 million last year, as expected. North American direct sales declined similarly for the quarter with comparable store sales down 22% including the impact of reduced eOutlet events, which pressured total comparable stores sales by about six points. At POS, sales in North American department stores declined at a high-teens rate versus prior year, while shipments into department stores also declined.
• International sales decreased 1% to $421 million from $425 million last year. On a constant currency basis, International sales grew 5% as expected. Sales in China rose 13% on a constant currency basis and 12% in dollars with positive comparable store sales and slower distribution growth. In Japan, sales declined 7% on a constant-currency basis, while dollar sales were 18% below the prior year, reflecting the weaker yen. Constant currency sales for the remaining directly operated businesses in Asia grew slightly, while Europe remained strong, growing at a double digit pace. At POS, sales in international wholesale locations increased while shipments also rose.

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

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