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Coach's First Quarter Earnings Report
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Coach (NYSE:COH) announced its results for the first quarter on October 23, 2012. Coach is an American marketer of accessories and gifts, including handbags, footwear, sunwear, travel bags, business cases, jewelry, clothing, fragrance, and watches.
A business' earnings are the main determinant of its share price because earnings and the circumstances relating to them can indicate whether the business will be profitable and successful in the long run. SEE: Surprising Earnings Results
The Numbers: Both EPS and revenues failed to meet expectations as Coach posted 77 cents per share and revenues of $1.16 billion. Analysts were expecting 85 cents per share and revenues of $1.2 billion. EPS rose 5.5% while revenue climbed 10.4% from the same period last year. Coach has averaged revenue growth of 13.8% over the past five quarters. For the first quarter, the company reported net income of $221 million, up 2.8% from 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, "We were pleased with our results this quarter, highlighted by double-digit top line growth, with strong comparable stores sales - most notably in North America and China. We continued to make progress against our strategic initiatives - enhancing our leadership position in the North American women's bag and accessory category through fashion innovation, aggressively growing our international business, becoming a market leader in the Men's accessories category and harnessing the power of the digital world. In addition, during the quarter, we completed the acquisition of our domestic distributors in Korea and Malaysia."
A Look Back: Net income has increased 15.3% year-over-year on average across the last five quarters. The biggest gain came in the fourth of the last fiscal year, 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. The average estimate for the fiscal year is $3.53 per share, a rise from $3.51 90 days ago.
A business' earnings are the main determinant of its share price because earnings and the circumstances relating to them can indicate whether the business will be profitable and successful in the long run. SEE: Surprising Earnings Results
The Numbers: Both EPS and revenues failed to meet expectations as Coach posted 77 cents per share and revenues of $1.16 billion. Analysts were expecting 85 cents per share and revenues of $1.2 billion. EPS rose 5.5% while revenue climbed 10.4% from the same period last year. Coach has averaged revenue growth of 13.8% over the past five quarters. For the first quarter, the company reported net income of $221 million, up 2.8% from 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, "We were pleased with our results this quarter, highlighted by double-digit top line growth, with strong comparable stores sales - most notably in North America and China. We continued to make progress against our strategic initiatives - enhancing our leadership position in the North American women's bag and accessory category through fashion innovation, aggressively growing our international business, becoming a market leader in the Men's accessories category and harnessing the power of the digital world. In addition, during the quarter, we completed the acquisition of our domestic distributors in Korea and Malaysia."
A Look Back: Net income has increased 15.3% year-over-year on average across the last five quarters. The biggest gain came in the fourth of the last fiscal year, 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. The average estimate for the fiscal year is $3.53 per share, a rise from $3.51 90 days ago.
by
Investopedia Staff
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