Coach (NYSE:COH) announced its results for the most recent quarter on July 31, 2012. Coach is an American marketer of accessories and gifts, including handbags, footwear, sunwear, travel bags, business cases, jewelry, clothing, fragrance, and watches.

Investors care about earnings because they drive stock prices. Strong earnings generally result in the stock price moving up and vice versa. SEE: Can Earnings Guidance Accurately Predict The Future?

The Numbers: Coach posted an EPS above analyst expectations, despite revenues falling short of predictions. The company reported 86 cents per share versus the 85 cents per share estimate and revenues of $1.16 billion versus the $1.2 billion estimate. EPS rose 26.5% while revenue climbed 12% from the same period last year. Coach's revenue has grown during each of the past four quarters on a year-over-year basis. The company's net income for the quarter was $251.4 million. This is 24.2% higher than the year-ago quarter. Last quarter marked the third in a row of rising net income.

Management Quote: Lew Frankfort, Chairman and Chief Executive Officer of Coach, Inc., said, "I'm pleased that we were able to once again achieve strong double-digit sales and earnings gains for our fiscal fourth quarter and full year. We made significant progress against our key initiatives - aggressively growing our international business, becoming a market leader in the Men's accessories category and harnessing the power of the digital world. In FY12, we accelerated the acquisition of key Asian domestic distributors and grew our distribution rapidly in emerging luxury markets such as China."

A Look Back: Net income has increased 15.4% year-over-year on average across the last five quarters. The biggest gain came in the most recent quarter, when income climbed 24.2% from the year-earlier quarter.

Looking Ahead: When earnings estimates stay consistent leading up to earnings season, this usually shows analysts accurately predicted earnings estimates and business is stable. Be cautious though as this may also be a warnings sign that earnings could come at a huge surprise to the upside or downside as analyst did not correctly predict earnings. Steady earnings estimates mean there is not enough change going on with the company to make analysts change their opinions. When earning estimates are steady, investors can look at the revenue trend for a more fundamental indicator. Over the past three months, the average estimate for the fiscal year has climbed from $3.51 per to share to $3.53.



Filed Under: ,
Tickers in this Article: COH

comments powered by Disqus

Trading Center