Coach Shares Drop On Downbeat Sales

Shares of

slipped more than 6 percent in pre-market trading after the company reported weaker-than-expected sales for the fiscal third quarter. However, the company reported upbeat earnings for the latest quarter. The New York-based company posted quarterly earnings of $88.1 million, or $0.32 per share, compared to $190.7 million, or $0.68 per share, in the year-ago period. Excluding non-recurring items, the company's adjusted earnings came in at $0.36 per share. Its sales dropped 15 percent to $929.3 million. However, analysts were expecting earnings of $0.35 per share on revenue of $950 million. Its same-store sales slipped 23 percent in the quarter. Total North American sales tumbled 24 percent year-over-year to $493 million, while international sales declined 3 percent to $428 million in the latest quarter. On a non-GAAP basis, the company's operating income declined to $146 million, from $263 million in the year-earlier period. Operating margin narrowed to 15.8 percent from 23.9 percent. The average estimate among 32 Estimize users was for earnings of $0.36 per share and revenue of $953.11 million. Victor Luis, Chief Executive Officer of Coach, Inc., said, "We are pleased with our third quarter performance which was consistent with our plan and annual guidance despite the increased negative impact of foreign exchange on our top-line results. As was the case in our second quarter, we drove sequential improvement in our North America bricks and mortar business while further reducing our eOutlet events. In addition, our international businesses posted moderate growth on a constant currency basis, highlighted by double-digit increases in Europe and China." Coach shares slipped 6.02 percent to $39.78 in pre-market trading.