Coach, Inc. (NYSE: COH, SEHK: 6388), a leading marketer of modern classic American accessories, today reported sales of $1.16 billion for its first fiscal quarter ended September 29, 2012, compared with $1.05 billion reported in the same period of the prior year, an increase of 11%. Net income for the quarter totaled $221 million, with earnings per diluted share of $0.77. This compared to net income of $215 million and earnings per share of $0.73 in the prior year’s first quarter, representing increases of 3% and 6%, respectively.
Concurrently, the company also announced that its Board of Directors has authorized the repurchase of up to $1.5 billion of its outstanding common stock by June 30, 2015.
Lew Frankfort, Chairman and Chief Executive Officer of Coach, Inc., said, “We were pleased with our results this quarter, highlighted by double-digit top line growth, with strong comparable stores sales – most notably in North America and China. We continued to make progress against our strategic initiatives - enhancing our leadership position in the North American women’s bag and accessory category through fashion innovation, aggressively growing our international business, becoming a market leader in the Men’s accessories category and harnessing the power of the digital world. In addition, during the quarter, we completed the acquisition of our domestic distributors in Korea and Malaysia.”
For the quarter, operating income totaled $332 million, up 3% from the $322 million reported in the comparable year-ago period, while operating margin was 28.6% versus 30.7% reported for the prior year. As previously announced, long-term growth investments, notably in Asia, impacted profitability levels in the period. During the quarter, gross profit rose 11% to $845 million from $765 million a year ago. Gross margin remained high at 72.8%, even with prior year. SG&A expenses as a percentage of net sales increased, reflecting the impact of the newly-acquired retail businesses in Korea and Malaysia and totaled 44.2%, as compared to 42.1% reported in the year-ago quarter.