Coach Tops Expectations as Sales Improve
April 26 2016 - 9:30AM
Dow Jones News
Coach Inc. logged stronger-than-expected earnings growth in its
latest quarter as sales improved markedly, suggesting the handbag
retailer's turnaround efforts are taking hold.
Chief Executive Victor Luis highlighted the "return to growth
for the Coach brand."
"Our performance was in line with expectations and reflected the
consistent execution of the transformation initiatives put into
place nearly two years ago, in spite of volatile tourist spending
flows," he said.
Amid flagging sales, Mr. Luis has been steering a turnaround
marked by fewer promotions, remodeled stores and expanded offerings
of other types of accessories. Earlier this year, he shook up
Coach's management ranks in another effort to revitalize the
business.
Alongside the improved quarterly results, the retailer unveiled
more initiatives that include an unspecified number of job cuts and
more management changes. Coach said it would take a charge of $65
million to $80 million in the current quarter stemming from the
layoffs and other moves.
In the company's March quarter, sales at existing North American
stores were flat after plunging 22% in the previous quarter and
declining 23% a year earlier. The company said Tuesday that it is
on track to post positive same-store sales in the current
quarter.
Meanwhile, international sales rose 5% on strength in China and
Europe, despite a negative impact from the strong dollar.
In all, the company reported a profit of $112.5 million, or 40
cents a share, up from $88.1 million, or 32 cents a share, a year
earlier. Excluding certain items, earnings per share rose to 44
cents from 36 cents.
Revenue grew 11% to $1.03 billion. Analysts projected 41 cents
in adjusted earnings per share on $1.02 billion in sales, according
to Thomson Reuters.
Coach backed its previous sales and margin guidance for the
fiscal year ending in June.
Write to Lisa Beilfuss at lisa.beilfuss@wsj.com
(END) Dow Jones Newswires
April 26, 2016 09:15 ET (13:15 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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