Coach Reports First Quarter Earnings Per Share of $0.22; Up over 80% and Ahead of Revised Expectations; Results Driven by a 34% Sales Gain and Significant Margin Expansion.Business Editors NEW YORK--(BUSINESS WIRE)--Oct. 21, 2003 Coach, Inc. (NYSE NYSE See: New York Stock Exchange : COH CoH City of Heroes (gaming) CoH Company of Heroes (game) COH City of Hope COH Court of Honor (Boy Scouts of America) COH Controlled Ovarian Hyperstimulation ), a leading marketer of modern classic American American, river, 30 mi (48 km) long, rising in N central Calif. in the Sierra Nevada and flowing SW into the Sacramento River at Sacramento. The discovery of gold at Sutter's Mill (see Sutter, John Augustus) along the river in 1848 led to the California gold rush of accessories, today announced an increase of over 80% in earnings per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share to $0.22 for its first fiscal quarter ended September September: see month. 27, 2003, up from $0.12 per diluted share a year ago. This substantial increase in earnings from the prior year's first quarter reflected a 34% gain in net sales Net Sales The amount a seller receives from the buyer after costs associated with the sale are deducted. Notes: This amount is calculated by subtracting the following items from gross sales: merchandise returned for credit, allowances for damaged or missing goods, freight combined with operating margin Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: improvement. In the first quarter, net sales were $258.4 million, 34% higher than the $192.8 million reported in the same period of the prior year. Net income rose 88% to $42.3 million, or $0.22 per diluted share, compared with $22.5 million, or $0.12 per diluted share in the prior year. These results were ahead of the analysts' recently revised consensus estimate of $0.18 per share. Earnings per share numbers have been adjusted for the two-for-one split, which was effected on October October: see month. 1, 2003. Lew a. 1. Lukewarm; tepid. Frankfort Frankfort, city (1990 pop. 25,968), state capital and seat of Franklin co., N central Ky., on both sides of the Kentucky River, in the heart of the bluegrass country; inc. 1796. , Chairman and Chief Executive Officer of Coach, Inc., said, "Our first quarter results were driven by both the vitality vi·tal·i·ty n. 1. The capacity to live, grow, or develop. 2. Physical or intellectual vigor; energy. of the Coach brand and the enthusiastic consumer response to our product offerings - notably handbags and small leather goods - across all major business units. We're confident that the strength of the Coach brand, combined with our clearly articulated ar·tic·u·la·ted adj. Characterized by or having articulations; jointed. roadmap for growth, will allow Coach to continue to deliver superior financial results over our planning horizon Planning horizon The length of time a model or investor or plan projects into the future. ." During the quarter, gross profit rose 43% to $187.9 million from $131.2 million a year ago. Gross margin expanded by 460 basis points from 68.1% to 72.7% driven by product mix, sourcing initiatives and channel mix. SG&A expenses as a percentage of net sales declined 360 basis points to 45.0%, compared to the 48.6% reported in the year-ago quarter. First fiscal quarter sales results in each of Coach's primary channels of distribution grew as follows: -- Direct to consumer sales, which consist primarily of sales at U.S. Coach stores, rose 26% to $134.5 million from $106.6 million in the comparable period of the prior year. Comparable store sales for the quarter rose 17.8%, with retail stores up 29.2% and factory stores up 7.6%. -- Indirect sales increased 44% to $123.9 million from $86.2 million in the same period last year. Results were driven primarily by strong gains in international sales both in Japan and other international markets; while US department store sales and business-to-business results were also robust. Sales growth in Japan - through CJI CJI Criminal Justice Institute CJI Computer Jobs in Israel CJI Centrul Pentru Jurnalism Independent - reflected double-digit sales gains in comparable locations and the excellent contribution of new location openings. During the first quarter of fiscal 2003, the company opened seven and closed one Coach retail store and opened one factory store, bringing the total to 162 retail stores and 77 factory stores at September 27, 2003. In addition, four retail stores were expanded. Mr. Frankfort continued, "Our first quarter results were fueled by remarkably successful transitional and fall introductions. Starting in July with the introduction of the Soho Mini Signature offering, momentum continued in August with the launch of the Soho Leather and Suede group. In September, Hamptons Leather returned for the fall season featuring new silhouettes, such as the buckle hobo and buckle demi zip (1) To compress a file with PKZIP. See ZIP file. (2) (Zip) A removable disk from Iomega. See Zip disk. (3) (ZIP) (Zig-Zag Inline P , both key styles during the month, as well as updated favorites Another term for bookmarks, which was popularized by Microsoft's Internet Explorer browser. See favicon and Internet Explorer. , such as the carryall. Our broader pricing strategy also was implemented during the quarter, as new, more sophisticated silhouettes and styles at higher price points sold through well. For the holiday quarter, we just brought out the Soho Duffle handbag group, which is already generating very strong results. All of these factors, in combination with momentum which has continued into October throughout our major businesses, reinforce our confidence that we will have a strong holiday season." "In the second quarter, as planned, we will add at least three more retail stores in the U.S., bringing the total to 10 new retail stores before holiday. We will also be adding about 10 new locations in Japan over the fiscal year which may include the opening of a third flagship store." The company now estimates second fiscal quarter sales of at least $385 million, representing a year-over-year increase of at least 25%, and earnings per diluted share of at least $0.44. For the fiscal year 2004 the company expects to generate sales of at least $1.2 billion, an increase of at least 27% from prior year, and earnings per diluted share of at least $1.09. Coach will host a conference call to review these results at 8:30 a.m. (ET) today, October 21, 2003. Interested parties may listen to the webcast by accessing www.coach.com/investors on the Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the or dialing into 1-888-405-2080 and Relations. A telephone replay will be available starting at 12:00 noon today, for a period of five business days. The number to call is 1-888-282-0028. A webcast replay of this call will be available for five business days on the Coach website. Coach, with headquarters in New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of , is a leading American marketer of fine accessories and gifts for women and men, including handbags, women's and men's small leathergoods, business cases, weekend and travel accessories, footwear Footwear consists of garments worn on the feet. It is worn for a variety of reasons, including protection against the environment, hygiene and adornment. Usually, socks and other hosiery are worn between the feet and the footwear, except for sandals and flip flops (thongs). , watches, outerwear, jewelry jewelry, personal adornments worn for ornament or utility, to show rank or wealth, or to follow superstitious custom or fashion. The most universal forms of jewelry are the necklace, bracelet, ring, pin, and earring. , sunwear, furniture and related accessories. Coach is sold worldwide through Coach stores, select department stores This is a list of department stores. In the case of department store groups the location of the flagship store is given. This list does not include large specialist stores, which sometimes resemble department stores. and specialty stores Noun 1. specialty store - a store that sells only one kind of merchandise shop, store - a mercantile establishment for the retail sale of goods or services; "he bought it at a shop on Cape Cod" , through the Coach catalogue in the U.S. by calling 1-800-223-8647 and through Coach's website at www.coach.com. Coach's shares are traded on The New York Stock Exchange New York Stock Exchange (NYSE) World's largest marketplace for securities. The exchange began as an informal meeting of 24 men in 1792 on what is now Wall Street in New York City. under the symbol COH. This press release contains forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. based on management's current expectations. These statements can be identified by the use of forward-looking terminology such as "may," "will," "should," "expect," "intend," "estimate," "are positioned to," "continue," "project," "guidance," "forecast," "anticipated," or comparable terms. Future results may differ materially from management's current expectations, based upon risks and uncertainties such as expected economic trends, the ability to anticipate consumer preferences, the ability to control costs, etc. Please refer to Coach's latest Annual Report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. for a complete list of risk factors.
COACH, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
For the Thirteen Weeks Ended September 27, 2003 and September 28,
2002
(in thousands, except per share data)
(unaudited)
THIRTEEN WEEKS
ENDED
-------------------
September September
27, 28,
2003 2002
--------- ---------
Net sales $258,375 $192,791
Cost of sales 70,466 61,567
--------- ---------
Gross profit 187,909 131,224
Selling, general and administrative expense 116,284 93,616
--------- ---------
Operating income 71,625 37,608
Interest (income), net (405) (165)
--------- ---------
Income before income taxes and minority interest 72,030 37,773
Income taxes 27,008 13,977
Minority interest, net of tax 2,693 1,316
--------- ---------
Net income $42,329 $22,480
========= =========
Basic net income per share $0.23 $0.13
========= =========
Shares used in computing
basic net income per share 183,588 177,458
========= =========
Diluted net income per share $0.22 $0.12
========= =========
Shares used in computing
diluted net income per share 190,959 183,984
========= =========
COACH, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
At September 27, 2003, June 28, 2003 and September 28, 2002
(in thousands)
September June 28, September
27, 28,
2003 2003 2002
----------- --------- -----------
(unaudited) (unaudited)
ASSETS
Cash and cash equivalents $255,357 $229,176 $44,033
Receivables 59,859 35,470 45,009
Inventories 176,794 143,807 152,724
Other current assets 37,431 40,085 26,154
----------- --------- -----------
Total current assets 529,441 448,538 267,920
Property and equipment, net 125,119 118,547 97,099
Other assets 49,930 50,567 61,330
----------- --------- -----------
Total assets $704,490 $617,652 $426,349
=========== ========= ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable $41,537 $26,637 $32,547
Accrued liabilities 108,240 108,273 96,751
Subsidiary credit facilities 28,233 26,471 35,042
Current portion of long-term debt 115 80 80
----------- --------- -----------
Total current liabilities 178,125 161,461 164,420
Long-term debt 3,420 3,535 3,535
Other liabilities 5,027 3,572 3,640
Minority interest 24,849 22,155 15,863
Stockholders' equity 493,069 426,929 238,891
----------- --------- -----------
Total liabilities and stockholders'
equity $704,490 $617,652 $426,349
=========== ========= ===========
|
|
||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion