US: Coach Inc reports strong full year
Coach Inc has reported a 41% leap in full year earnings per share for continuing operations to US$1.69, as the company benefited from a 28% jump in sales.
The company said in a statement that net sales were US$2.61bn for the full year, up 28% from the $2.04bn recorded in fiscal year 2006. Net income rose to $637m, up 37%.
In the fourth quarter, net sales were $652m, 30% higher than the same period last year. Net income rose 41% to $159m.
Lew Frankfort, chairman and CEO said: "We're extremely pleased with our fiscal fourth quarter and full year results. This quarter's performance demonstrated a continuation of the strength we have seen throughout the year as our market share continued to grow across all channels and geographies. Our performance also reflects the vibrancy of the premium handbag and accessory category in North America, where we continue to see significant growth."
For the full year, direct to consumer sales rose 30% to $2.10bn from $1.61bn generated in fiscal 2006. Overall, North American same-store sales for the fiscal year increased 22.3%, with retail stores up 16.4% and factory stores up 30.0%, while comparable location sales in Japan rose mid-single-digit. For the year, sales in Japan rose 19% on a constant-currency basis, while dollar sales rose 16%, impacted by the exchange rate.
For the year, indirect sales on a continuing operations basis rose 20% to $511m. Results reflected strong gains in US department stores where sales at POS rose about 30%, the company said. In addition, sales at retail increased at a double-digit pace at International Wholesale locations.
Frankfort said: "As usual, our overall sales growth in 2008 will be driven by both distribution - through new and expanded stores - and higher productivity - fuelled by product innovation and excellent service. During 2008, we will open about 40 new North American retail stores, at least six US factory outlets, and 15-20 new locations in Japan, along with expanding key locations in both geographies. In addition, we expect to open about 30 international wholesale locations, working with our distributors, including at least five in Mainland China."
He added: "While fiscal 2008 has just begun, our strong start bodes well for the year. We're confident that our proven growth strategies, built upon our leadership position, will continue to deliver excellent returns in the seasons ahead and over our planning horizon."
Coach updated guidance for fiscal 2008 and now estimates sales of about $3.16bn for the year, an increase of about 21%. Operating income is expected to rise about 23% with an operating margin improvement of at least 50 basis points. Earnings per share are forecasted to rise to at least $2.06, up about 22% from last year.
In addition, the company introduced its first fiscal quarter outlook, with sales targeted to be at about $655m, an increase of over 23%, and earnings per share projected to be about $0.39, a gain of over 25%.
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