Coach To Shed Light On Q1 Numbers

(RTTNews) - Lifestyle and multi-brand company Coach Inc. (COH) is due to release its first-quarter results on Tuesday, October 27. Analysts, polled by Thomson Reuters, are looking for earnings of $0.40 per share on revenue of $1.04 billion.

Based on current exchange rates, currency headwinds are expected to have an approximate 200 basis point negative impact on annual revenue growth, disproportionately impacting the first half and, most notably, the first quarter, the company said.

Meanwhile, the company sees significant growth opportunities for the Stuart Weitzman and Coach brands. The company expects Stuart Weitzman brand sales in the area of $335 million on a dollar basis for fiscal 2016, an increase of about 10% from fiscal 2015, driving Coach Inc. consolidated revenue growth of high single digits and adding about $0.09 to earnings per share, excluding financing, transaction costs and short-term purchase accounting adjustments.

The company currently expects Coach stand-alone brand revenues for fiscal 2016 to increase by low-single digits in constant currency on a 52-week basis, consistent with prior guidance. Coach expects fiscal 2016 to be another year of very strong growth with sales growing to about $125 million.

Coach is accelerating its modern luxury store opening and renovation plans for fiscal 2016, and expects to complete about 60 renovations in North America and about 100 internationally, including the projects that shifted from fiscal year 2015. Further, the company expects to open 60 to 70 new stores during the year. Therefore, by the end of fiscal 2016, Coach would expect roughly 40% of its store base to be in the modern luxury concept.

The company noted that fiscal 2016 will include a 53rd week, which is expected to contribute about $75 million - $80 million in incremental revenue and $0.06 in earnings per share.

In the last quarter, the company reported a steep decline in profit reflecting lower revenues. Meanwhile, adjusted earnings per share surpassed analysts' estimates, as did revenues.

The company's fourth-quarter reported net income plummeted to $12 million or $0.04 per share from $75 million or $0.27 per share in the previous year.

Adjusted income totaled $85 million or $0.31 per share, compared to $164 million or $0.59 per share last year. On average, 32 analysts polled by Thomson Reuters expected earnings of $0.29 per share for the quarter. Analysts' estimates typically exclude certain special items.

Coach suffered a 12% decline in fourth-quarter net sales that amounted to $1.00 billion versus $1.14 billion in the prior year. On a constant currency basis, total sales decreased 8% for the period. On a constant currency basis, total sales declined 8% for the period. Analysts expected revenues of $973.03 million.

Victor Luis, Chief Executive Officer of Coach, said, "We are pleased with our fourth quarter and full year progress on the comprehensive plan we laid out a year ago to reinvigorate our brand and business. Our execution of these strategic initiatives and resulting performance has been consistent with our expectations and underscores our confidence in the path we've chosen."

During the fourth quarter, the company introduced Stuart Vevers's product across its multi-channel distribution, continued to open and renovate modern luxury concept stores globally, and had an overwhelmingly positive reception to its Men's and Women's fashion presentations. It also took an important step in becoming a multi-brand company, with the acquisition of Stuart Weitzman, which is expected to be an additional growth driver for the company.