Coach, Inc. (NYSE:COH) (SEHK:6388), a leading New York design house of modern luxury accessories, today reported sales of $1.15 billion for its first fiscal quarter ended September 28, 2013, compared with $1.16 billion reported in the same period of the prior year, a decrease of 1%. On a constant currency basis sales rose 2% for the quarter. Net income for the quarter totaled $218 million, with earnings per diluted share of $0.77. This compared to net income of $221 million and earnings per share of $0.77 in the prior year’s first quarter.
Lew Frankfort, Chairman and Chief Executive Officer of Coach, Inc., said, “During the first quarter we achieved slight overall sales gains in constant currency, benefiting from our geographic diversity. We continued to drive excellent growth in emerging markets and Europe as well as in the Men’s business and developing lifestyle categories, such as footwear. Importantly, we moved forward with our transformation initiatives across all consumer touch points - product, store environments and marketing - focused on addressing the competitive handbag and accessories category in North America.”
For the quarter, operating income totaled $322 million, down 3% from the $332 million reported in the comparable year-ago period, while operating margin was 27.9% versus 28.6% reported for the prior year . During the quarter, gross profit declined 2% to $827 million from $845 million a year ago. Gross margin was 71.8% versus 72.8% for the prior year. SG&A expenses as a percentage of net sales totaled 43.9%, as compared to 44.2% reported in the year-ago quarter.
The company also announced that during the first fiscal quarter, it repurchased and retired nearly 3.3 million shares of its common stock at an average cost of $53.17, spending a total of $175 million. At the end of the period, about $1.2 billion remained under the company’s current repurchase authorization.