Market Overview

Coach Beats Estimates; Raises Dividend (COH)


Shares of Coach, Inc. (NYSE: COH) are trading off slightly this morning after the company reported Q3 earnings results. Currently, shares are lower by 0.89%, trading at $56.57.

The company reported sales of $951 million for the third fiscal quarter, compared with $831 million reported in the same period of the prior year, an increase of 14%. Net income for the quarter totaled $186 million, or EPS of $0.62. This compared to net income of $158 million, EPS of $0.50, in the prior year's third quarter, increases of 18% and 23%, respectively.

This beat the Street's expectation for $0.60 per share on revenues of $947.2 million.

Lew Frankfort, Chairman and Chief Executive Officer of Coach, Inc., said, "We're extremely pleased with the strong sales and earnings gains we achieved, marking a continuation of the robust trends we have experienced for well over a year now.”

“Our performance - led by another quarter of excellent North American comparable store sales -- demonstrated the brand's vibrancy across channels and geographies. Further, the announcement today of a 50% increase in our dividend reflects our financial strength and our confidence in Coach's business outlook," he added.

Interesting to note is that the earthquake and tsunami in Japan lowered sales by $20 million, cutting EPS by $0.025. The company also expects current conditions in Japan to lower fiscal fourth-quarter sales by about $20 million, or $0.02-0.03 per share.

The company also raised its dividend by 50%, to $0.90 on an anuual basis.

During the third quarter, Coach said it repurchased and retired 3.53 million shares at an average cost of $54.51 per share, spending a total of $192 million. At the end of the period, approximately $1.3 billion remained under the company's previous repurchase authorization.

Coach, Inc. is a marketer of fine accessories and gifts for women and men. Coach's product offerings include handbags, women's and men's accessories, footwear, business cases, jewelry, wearables, sunwear, travel bags, fragrance and watches. Coach operates in two business segments: Direct-to-Consumer and Indirect.

Posted-In: Earnings Guidance


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