US: Coach lowers FY guidance as Q1 profit falls 6%
Leather goods and accessories company Coach lowered its full-year revenue guidance after recording a 6% dip in first quarter profit, despite rising sales.
The US company's first quarter net sales were up 11% to US$753m, but net income declined 6% to $146m.
Operating income was down 2% to $233m, and operating margins were 31%, down on last year's figure of 35.3%.
However, gross profit was up 8% to $558m and earnings per share increased 7% to $0.44 for the three months ended 27 September.
"We experienced a moderation in our top-line growth this quarter as the retail environment in North America continued to deteriorate," said Lew Frankfort, Coach chairman and CEO.
"At the same time we were pleased to achieve our earnings per share guidance, while delivering solid sales gains."
Frankfort said the company's enthusiasm for its holiday season products was tempered by weak retail traffic trends.
"We expect this very difficult retail environment will make productivity comparisons challenging for the balance of the fiscal year," he added.
The company now expects fiscal 2009 sales growth of about 10%, down from its previous guidance figure of 13%, to reach about $3.5bn.
However, it maintained its FY EPS guidance of about $2.25.
For the second quarter, Coach is forecasting sales of about $1.05bn, up 8% on last year, and EPS of $0.77.
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