Coach misses by $0.05, misses on revs; N Am comps of -13.6% (52.55 )
Reports Q2 (Dec) earnings of $1.06 per share, $0.05 worse than the Capital IQ Consensus Estimate of $1.11; revenues fell 5.6% year/year to $1.42 bln vs the $1.49 bln consensus.
- Co reports Q2 N Am comps of -13.6% (previously guided N Am comp run rate to be down HSD for the balance of FY14).
- Co reports Q2 gross margin of 69.2% vs 69.7% estimate and 72.2% year ago.
- Sales in China rose about 25% and the business is on track to meet annual guidance of $530 million. In Japan, sales declined 2% on a constant-currency basis, while dollar sales were 21% below the prior year, reflecting the weaker yen. Shipments into international wholesale accounts increased significantly, as expected, due to timing of a Chinese holiday while underlying POS sales trends increased slightly.
- "During the holiday quarter, total sales fell slightly in constant currency as weakness in our North American women's bag and accessories business offset strong growth in Men's, footwear, and robust results in emerging Asian markets and Europe. We continued to be disappointed by our performance in North America, which was impacted by substantially lower traffic in our stores and by our decision to limit access to our e-factory flash sales site. At the same time, China results remained resilient with total sales growing about 25% and comparable store sales rising at a double digit rate. Importantly, we continued to advance our transformation initiatives and position Coach to launch Executive Creative Director Stuart Vevers's first collection in September."