New ETF Book by Larry Connors - Click here to read more
In a statement, chairman and chief executive officer, Lew Frankfort said, "Despite this being the most difficult holiday season our company has experienced during my 30-year tenure, we were able to report second quarter sales and earnings per share that were only slightly lower than prior year."
The company noted that it reported weaker-than-expected sales as both traffic and conversion rates in retail stores and department store locations were affected by the heavily promotional atmosphere against a deteriorating economic backdrop.
Second Quarter Results
The New York-based company posted net income of $216.91 million for the second quarter, down 14% from $252.32 million in the prior-year quarter, while on a per share basis it declined 3% to $0.67 from $0.69 in the year-ago quarter.
On average, sixteen analysts polled by First Call/Thomson Financial expected the company to earn $0.67 per share for the second quarter. Analysts' estimates typically exclude special items.
Earlier in January, the company had forecasted second quarter earnings of about $0.67 per share, which the company met.
Net sales for the quarter declined 2% to $960.26 million from $978.02 million in the same quarter last year, but marginally topped twelve Wall Street analysts' consensus estimate of $958.97 million. Net sales decreased 4%, excluding positive currency effects.
Segmental Details
Direct-to-consumer sales increased 2% to $818 million from the year-ago quarter, including a 1% gain in sales from new and existing North American Coach stores. North American comparable store sales for the quarter declined 13.2%. Sales in Japan, a key market for Coach, edged down 1% in constant currency, while dollar sales rose 15%, adjusted for a stronger yen. In China, sales remained robust.
Indirect sales dropped 19% to $143 million from the prior-year quarter, hurt by the reduced shipments into U.S. department stores, as the company continues tight inventory management.
Other Metrics
For the second quarter, operating income amounted to $348.36 million, down 14% from the same quarter a year ago, while operating margin declined to 36.3% from 41.2% in the prior-year quarter.
Gross profit for the quarter declined 6% to $692.04 million from the year-ago quarter, while gross margin declined to 72.1% from 75.4% last year, impacted by deeper factory store promotions, as well as channel mix and our sharper pricing initiative in full price.
Selling, general and administrative expenses increased to $343.67 million from $334.21 million in the prior-year quarter, while as a percentage of net sales it increased to 35.8% from 34.2% in the same quarter last year. Interest income dropped to $0.53 million from $10.57 million in the year-ago quarter.
During the second quarter, the company repurchased and retired 6.05 million shares of its common stock for $103 million at an average cost of $17.08 per share. At the end of the second quarter, $760 million was available under the company's current repurchase authorization.
With the addition of six retail stores and three factory stores in North America, the company operated a total of 324 retail stores and 106 factory stores at the end of the second quarter.
Further, the company intends to reduce new store growth for the fiscal 2010 in the U.S. to an additional 20 stores, from the prior growth plan of 40 new stores.
Six-Month Highlights
For first six-month period, the company reported a net income of $362.72 million or $1.10 per share, compared to $407.12 million or $1.09 per share in the year-ago period.
Net sales for the year-to-date period rose 4% to $1.71 billion from $1.65 billion in the same period last year. Net sales increased 1%, excluding the positive currency effects.
Looking ahead……..
"During this period of economic turmoil, we will continue to plan cautiously, as our financial strength affords us the ability to manage our business for the long-term. Our brand is vibrant, our leadership position intact, and we will continue to adapt our strategies to a much more price sensitive consumer," Frankfort added.
Coach noted that it is not providing guidance for the balance of the fiscal year. In January, Coach suspended earnings per share guidance for the second half or full year fiscal 2009, citing the uncertain business environment.
However, the company added that it is financially solid and are well positioned to manage through the economic downturn and have a strong, essentially debt-free balance sheet, and significant cash position.
Stock Quote
COH closed Tuesday's regular trading session at $15.87, down $1.13 on a volume of 8.49 million shares, higher than the three-month average volume of 7.31 million shares. In the past 52-week period, the stock has been trading in a range of $13.19 to $37.64.
For comments and feedback: contact editorial@rttnews.com Copyright(c) 2009 RealTimeTraders.com, Inc. All Rights Reserved
More News:
Market Updates |
Stock Alerts |
All Trading News |
Stock Index
About TradingMarkets | Contact | Advertise | Careers | Link to Us | Site Map | Help | Terms & Conditions | Privacy Policy | Return Policy | Testimonials | Feedback
The Connors Group, Inc. ("Company") is not an investment advisory service, nor a registered investment advisor or broker-dealer and does not purport to tell or suggest which securities or currencies customers should buy or sell for themselves. The analysts and employees or affiliates of Company may hold positions in the stocks, currencies or industries discussed here. You understand and acknowledge that there is a very high degree of risk involved in trading securities and/or currencies. The Company, the authors, the publisher, and all affiliates of Company assume no responsibility or liability for your trading and investment results. Factual statements on the Company's website, or in its publications, are made as of the date stated and are subject to change without notice.
It should not be assumed that the methods, techniques, or indicators presented in these products will be profitable or that they will not result in losses. Past results of any individual trader or trading system published by Company are not indicative of future returns by that trader or system, and are not indicative of future returns which be realized by you. In addition, the indicators, strategies, columns, articles and all other features of Company's products (collectively, the "Information") are provided for informational and educational purposes only and should not be construed as investment advice. Examples presented on Company's website are for educational purposes only. Such set-ups are not solicitations of any order to buy or sell. Accordingly, you should not rely solely on the Information in making any investment. Rather, you should use the Information only as a starting point for doing additional independent research in order to allow you to form your own opinion regarding investments. You should always check with your licensed financial advisor and tax advisor to determine the suitability of any investment.
HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVE CERTAIN INHERENT LIMITATIONS. UNLIKE AN ACTUAL PERFORMANCE RECORD, SIMULATED RESULTS DO NOT REPRESENT ACTUAL TRADING AND MAY NOT BE IMPACTED BY BROKERAGE AND OTHER SLIPPAGE FEES. ALSO, SINCE THE TRADES HAVE NOT ACTUALLY BEEN EXECUTED, THE RESULTS MAY HAVE UNDER- OR OVER-COMPENSATED FOR THE IMPACT, IF ANY, OF CERTAIN MARKET FACTORS, SUCH AS LACK OF LIQUIDITY. SIMULATED TRADING PROGRAMS IN GENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH THE BENEFIT OF HINDSIGHT. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFITS OR LOSSES SIMILAR TO THOSE SHOWN.
The Connors Group, Inc.
10 Exchange Place, Suite 1800
Jersey City, NJ 07302
© Copyright 2009 The Connors Group, Inc.
