World Footwear

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Coach’s net sales up by 4%

Jan 27, 2016 United States
Coach’s net sales up by 4%
The New York-based design house of modern luxury accessories and lifestyle brands announced its second quarter results
Victor Luis, Chief Executive Officer of Coach, Inc., said: “We are very pleased with our second quarter performance, which was consistent with our expectations and reflected the most significant progress to date on our transformation plan despite the difficult retail environment globally. We drove further sequential improvement in our North America bricks and mortar business… Our international businesses posted strong growth on a constant currency basis, highlighted by double-digit increases in Europe, and Mainland China, as well as sales gains in Japan. Overall, our results continue to give us confidence that the cumulative impact of our actions will result in a return to top line growth this fiscal year and positive North American comps by our fourth quarter.”

Net sales for the Coach group totaled 1.27 billion US dollars in the second fiscal quarter, an increase of 4% compared to the same period last year. On a constant currency basis, total sales increased 7% for the period.

Net income for the quarter on a Non-GAAP basis totaled 188 million US dollars, with earnings per diluted share of 0.68 US dollars. This included a contribution of 13 million US dollars or 0.05 US dollars per share from Stuart Weitzman, acquired last financial year. On a GAAP basis, net income for the quarter totaled 170 million US dollars with earnings per diluted share of 0.61 US dollars including a contribution of 12 million US dollars or 0.04 US dollars per share from Stuart Weitzman.

Net sales for the Coach brand totaled 1.18 billion US dollars for the second fiscal quarter, compared with 1.22 billion US dollars reported in the same period of the prior year, a decrease of 3%. On a constant currency basis, total sales decreased 1% for the period. As for the Stuart Weitzman, the brand totaled 94 million US dollars for the second fiscal quarter.

Operating income for the Coach brand on a non-GAAP basis totaled 263 million US dollars, while operating margin was 22.3%. On a reported basis, operating income was 243 million US dollars for Coach, while operating margin was 20.6%.

During the second quarter of FY16, the company recorded charges of 14 million US dollars under its multi-year transformation plan. These charges consisted primarily of organizational efficiency costs and accelerated depreciation for stores renovations. In addition, the company recorded costs of approximately 10 million US dollars associated with the acquisition of Stuart Weitzman.

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