Coach: Earnings Scorecard – Analyst Blog

Filed in earnings, euro, Gold Investing, Gold Prices, ubs by on May 19, 2010 0 Comments

Coach, Inc. ( COH ), the designer and marketer of fine accessories and gifts, posted better-than-expected third-quarter 2010 results on April 20, 2010 on the heels of strong top-line growth and competitive pricing. Wall Street analysts have now had nearly a month to digest the news. Below we cover the recent earnings announcement, subsequent analyst estimate revisions and Zacks ratings for the short-term and long-term outlook for the stock. Earnings Report Review Coach’s quarterly earnings of 50 cents a share outpaced the Zacks Consensus Estimate of 46 cents, and jumped 31.3% from 38 cents delivered in the prior-year quarter. New York-based Coach said that total net sales climbed 12.3% year on year to $830.7 million. Direct-to-consumer sales jumped 15% to $726 million, driven by a 5.1% rise in the North American comparable-store sales and strong growth in the China business, which showed a double-digit rate increase in comparable-store sales. Indirect sales dropped marginally by 1% to $105 million due to lower shipments to U.S. department stores. (Read our full coverage on this earnings report: Coach Q3 Better Than Expected ) Earnings Estimate Revisions – Overview The Zacks Consensus Estimate has been on the rise since the earnings release. The rise in sales was a positive indication for the luxury-goods designer, battered by the recent economic downturn. Coach, the maker of handbags, wallets, shoes and other accessories, lowered prices on some of its merchandise, and introduced new styles to improve sales as consumers cut spending. The company’s long-term growth drivers include expansion of its global distribution model and forays into under-penetrated markets. After North America and Asia, Coach now plans to extend its global footprint in Western Europe. Agreement of Analysts In the last 30 days, 16 analysts out of 20 covering the stock raised their estimates for the upcoming fourth quarter, while five analysts raised and one analyst dropped estimates for the following quarter. For fiscal 2010 and 2011, 19 and 18 analysts raised their estimates, respectively. Magnitude of Estimate Revisions The Zacks Consensus Estimate for the upcoming fourth quarter moved upwards by 3 cents a share, and jumped 2 cents for the following quarter in the last 30 days. Moreover, the Zacks Consensus estimate for fiscal 2010 is up 8 cents, while for fiscal 2011, it is up 11 cents a share. The estimates in the current Zacks Consensus for fourth-quarter 2010 range from a low of 53 cents to a high of 59 cents. For fiscal 2010, the estimates range from $2.21 to $2.29. Coach in Neutral Lane Coach boasts a proven strategy of investing in stores to enhance store sales productivity through product innovation, compelling pricing strategy, new merchandise assortments, and a cost-effective global sourcing model, which should help drive comparable-store sales and operating margins over the

Read more here:
Coach: Earnings Scorecard – Analyst Blog

Tags: , , , , , , , , , , , , , ,

About the Author ()

Leave a Reply

Your email address will not be published. Required fields are marked *