UPDATE: Coach 2Q Net Rises 15% On Higher Sales; China Grows
24 Enero 2012 - 10:17AM
Noticias Dow Jones
Coach Inc.'s (COH) fiscal second-quarter earnings rose 15%, with
its leather merchandise seeing demand from a growing men's business
and the retailer enjoying strength in the U.S. and China.
The results show that higher-end consumers, domestically and
abroad, are still buying amid an uncertain economy in which fellow
luxury retailer Tiffany & Co. (TIF) issued an earnings warning
earlier this month.
"We've experienced strong response to our new collections and
our pricing and assortment strategy continue to resonate with
consumers world-wide," Coach Chief Executive Lew Frankfort said on
a conference call.
Frankfort said the retailer saw improvement in its customers'
outlook for the economy compared to a quarter ago, with about 60%
of those surveyed now believing that the U.S. economy is stable or
getting better, up from 48%.
Coach's women's handbag and accessory sales rose about 12%
across all channels in North America during the most recent
quarter.
Outside the U.S., China remains a growth vehicle for Coach,
despite indications that its economy is cooling. "We continue to
generate very strong sales growth, significant double-digit
comparable-store sales in China," where the company has 80
locations and believes it can do $300 million in sales in its
current fiscal year, Frankfort said.
The retailer also continues to build out its men's accessories
lines, which Frankfort said is on pace to double in the current
fiscal year to more than $400 million in global sales.
Coach's "product has resonated well with customers and we
believe the higher-end consumer will continue to increase spending"
this year, driving same-store sales, said Christine Chen, retail
analyst at Needham & Co.
For the quarter ended Dec. 31, Coach reported a profit of $347.5
million, or $1.18 a share, up from $303.4 million, or $1 a share, a
year earlier. Sales jumped 15% to $1.45 billion.
Analysts polled by Thomson Reuters had most recently forecast
earnings of $1.15 on revenue of $1.43 billion.
Gross margin slipped to 72.2% from 72.4%, but the decline was
less than analysts expected.
Direct-to-consumer sales, which now include its Singapore
business, increased 17%. Same-store sales rose 8.8% in North
America and were flat in Japan, on a constant-currency basis.
Indirect sales were flat at $166 million, hurt by the timing of
international shipments.
Coach were recently up shares are up 5.1% to $67.52.
-By Karen Talley, Dow Jones Newswires; 212-416-2196;
karen.talley@dowjones.com
--Melodie Warner contributed to this article.
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