The scuffed-up stock market can't take the shine off retailer
The seller of high-end leather handbags reported earnings ahead of Wall Street's expectations Tuesday and made positive comments about its outlook for the rest of the year. Strength in the U.S. and Japan -- a major growth area for the company -- has helped the company report strong results, and shareholders have been amply rewarded: the stock, while a bit off its high reached in May, is up about 30% on the year, a remarkable performance given the pummeling the major averages have taken this year.
In the fiscal fourth quarter, Coach reported an 80% jump in net income compared to the previous year. The company earned $16.6 million, or 18 cents a share, in the quarter, up from $9.2 million, or 10 cents a share, in the year-ago period. On average, analysts had been projecting earnings of 17 cents per share, according to Thomson Financial/First Call. Sales, meanwhile, were $171.4 million, up 30% from a year ago.
"Our strong top line growth reflects the rejuvenation of the Coach brand over the last several years," said CEO Lew Frankfort in a statement. "Further, our ability to execute our plans and exceed our financial goals, especially in light of the circumstances of the past year, reinforces the sustainability of our growth strategies and the talent and experience of the Coach management team."
In the quarter, comparable-store sales were up 9.5%, including a 14.8% jump from retail stores and a 4.4% increase at outlets.
New York-based Coach forecast sales of $805 million to $830 million for fiscal 2003, or a jump of 12% to 15%. This compares with prior guidance of a 10% to 15% jump in sales. Coach expects earnings between $1.13 and $1.15 in 2003, ahead of the current consensus of $1.12.
Coach shares were off lately 82 cents at $23.90.