Wall Street may have wanted a bit more from Coach (COH) .
Before the market open on Tuesday, Aug, 15, the luxury handbag and accessories maker reported fourth-quarter earnings of 50 cents a share, beating Wall Street's expectations for earnings of earnings of 49 cents a share and up from the year-ago period's earnings of 45 cents a share.
Coach posted revenue of $1.13 billion, compared to the $1.51 billion analysts surveyed at Factset predicted and the $1.15 billion in revenue the company generated in the year-ago period.
"In retail, we continue to drive brand innovation," Coach CEO Victor Luis said on an earnings call with analysts, adding that the company will be focused on driving initiatives to attract a male consumer and working against the growing promotional environment among department stores.
The company's same-store sales rose 4% in North America. Last Tuesday, Coach rival Michael Kors Holdings Ltd. (KORS) reported better-than-expected first-quarter results but a same-store sales decline of 5.9%, which was still better than the 9.2% drop Wall Street expected.
Shares of Coach slipped 10% in pre-market trading as Wall Street may have been looking for more optimism with guidance now that newly acquired Kate Spade & Co. (KATE) will be in the mix. Coach sees full year earnings of $2.35 to $2.40 a share, an increase of about 10% to 12% from the prior year. Analysts were looking for $2.49 a share.
"For Kate Spade, while early days, we know we have a lot of work ahead," Luis said on the call. "Since announcing our acquisition in May, I have enjoyed getting to know more about the Kate Spade brand, team and customer. It is a strong, unique brand."
In July, Coach closed on its $2.4 billion acquisition of Kate Spade, which Luis noted on the call appeals to millennials - a demographic Coach has been struggling to attract.
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