US: Coach Q4 profit up on international sales growth
- Q4 net income rose 24% to reach US$202m
- Sales rose 12% to $1.03bn
- Operating income rose 19% over the quarter to $371m
Strong international sales drove an increase in Coach's fourth-quarter net income, but the company said the heavy promotional environment hit sales growth in its North American factory stores.
Net income rose 24% to reach US$202m over the quarter ended 30 June. Sales rose 12% to $1.03bn. Operating income rose 19% over the quarter to $371m, while operating margin reached 32.1% against 30.3% in the same period of the prior year.
"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, said chairman and CEO Lew Frankfort.
"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."
However, in North America, an increasingly promotional environment led to lower growth than expected in factory stores.
"As a result, we responded by reinstating our prior practice of in-store couponing in a cross section of factory locations late in the period. It's important to note that we have significant pricing flexibility and a variety of marketing levers available in this channel, which allow us to balance productivity gains and margin improvement," added Frankfort.
For the full-year, net income increased 18% to $1.04bn, while net sales rose 15% to $4.76bn. Operating profit grew 17% to $1.55bn, while operating margin increased to 32.6% from 32%.
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