Coach shares soar 11% on impressive quarter
The company beats profit and revenue expectations, bolstered by sales of men's goods.
The luxury goods maker said profit rose 6.2% to $238.9 million, or 84 cents per share, from $225 million, or 77 cents a share, a year earlier, fueled by gains in North America. Revenue rose 7% to $1.19 billion. Analysts had expected a profit of 80 cents a share on revenue of $1.18 billion. Coach also raised its dividend by 13%. For a closer look at the numbers, click here.
As Bloomberg News noted, Coach is working to "turn itself into a dual-gender lifestyle brand." The company expects its men's business to double to more than $600 million in sales this year as it increases its lineup of products. China, now the largest luxury market, is another area of growth. Coach, best known for its stylish handbags, has recently launched a line of shoes that was especially well received by consumers, according to the company.
Shares of Coach rose $5.61, or 11.1%, to $56.20 in morning trading.
Though the company continues to face stiff competition from the likes of Michael Kors (KORS) and Ralph Lauren (RL), many experts say the luxury consumer is proving resilient amid all the talk about sequestration in the U.S. and a slowdown in China's red-hot economy. U.S. same-store sales, a key retail metric of locations opened at least a year, rose 1% in the quarter, surpassing the decline some analysts had expected.
When the economy was in the dumps during the recent slowdown, even wealthy consumers became frugal, or at least were reluctant to discuss their luxury purchases. That's changing. A survey released earlier this year by Accenture found that 48% of respondents said they planned to purchase luxury clothing or personal care products in the next six months.
Writer Buzz Bissinger is such a consumer. He recently admitted to spending $587,412.97 on designer clothes between 2010 and 2012. Coach wasn't among the designers he listed in his recent confession, published in GQ. Perhaps the company might want to invite the best-selling author to one of its shows.
--Jonathan Berr is among the least fashionable people in New Jersey. He doesn't own any of the listed shares. Follow him on Twitter @jdberr.
- Agritourism: Where the farm and vacationers meet
- Growing business behind Boston's reverse-911 calls
- Why Chevy's 46-mpg Cruze is a big deal
Copyright © 2014 Microsoft. All rights reserved.
Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.
[BRIEFING.COM] S&P futures vs fair value: -5.30. Nasdaq futures vs fair value: -10.80. U.S. equity futures hover near their pre-market lows amid cautious action overseas. The S&P 500 futures trade five points below fair value. Also of note, copper futures have extended their recent weakness and now trade lower by 0.6% at $2.933/lb.
Reviewing overnight developments:
- Asian markets ended lower. China's Shanghai Composite -0.2%, Hong Kong's Hang Seng -1.8%, and ... More
More Market News
The apparel chain takes a hard hit after blaming the weather for its quarterly sales decline. But cold temperatures don't explain the drop in full-year sales as well.
MUST-SEE ON MSN
- Video: Easy DIY smoked meats at home
A charcuterie master shares his process for cold-smoking meat at home.
- Jetpacks about to go mainstream
- Weird things covered by home insurance
- Bing: 70 percent of adults report 'digital eye strain'