Shares of Coach Inc. fell 2.46 percent on Tuesday as investors took issue with the company's decision to hold off on guidance for fiscal year 2009, even though third-quarter results beat Wall Street's expectations by 1 cent.
Lew Frankfort, chairman and chief executive officer, said on a conference call with Wall Street analysts that "providing guidance at this time [would] require a level of false precision."
He explained the company is looking forward to a good year, with double-digit gains on the top and bottom line. He told WWD that he'd "rather wait three months more to get a better sense of where we are in July when we begin the year."
For the three months ended March 29, the company said income rose 8.3 percent to $162.4 million, or 46 cents a diluted share, from $150 million, or 40 cents, in the same year-ago quarter. Sales rose 19.1 percent to $744.5 million from $625.3 million, while comps gained 9 percent.
For the nine months, income rose 13.2 percent to $569.5 million on a 22.4 percent gain in sales to $2.40 billion.
Frankfort, who was among the first to call the current slowdown a consumer-led recession, said, "The consumer in March is more pessimistic than she was in January. Most consumers believe the economy is getting worse."
He said the sales environment will continue to be a tough one, and acknowledged that he "has no idea when it will let up. I expect it to last at least through the calendar year. We don't expect it to improve during holiday."
Still, Coach is one of the few retailers that is still executing according to its existing plans. The accessories firm will still open 40 retail stores in the coming year. It also will test a new store format called "the gallery" in three upscale malls, beginning with Short Hills, N.J. The gallery format creates more room to showcase the entire Coach collection, from handbags to fragrance, scarves, men's and jewelry.
According to Frankfort, "We are keeping to our plan on opening stores. The stores are extremely profitable. There is no change in the number we will open internationally either. Our business is doing very well."
At the end of the quarter, Coach operated 287 full-price stores and 101 factory stores in North America, and 147 locations in Japan. The company still believes the North American market can easily support 500 retail stores, including up to 20 in Canada.
The company is projecting fourth-quarter earnings per share of 50 cents on sales of $780 million, both up 20 percent from year-ago levels. For the full year, Coach expects sales of $3.18 billion, with diluted EPS rising 22 percent to $2.06.
@tradesy is turning the concept of a showroom upside down with its new space in Santa Monica. Here, the company plans to hold events, art exhibits and a showcase rare fashion pieces like this Louis Vuitton boxing set. Get all the details on Tradesy’s first showroom on WWD.com. #wwdnews
Spotted last night at the @erdem x @hm launch event: Kate Bosworth, Rashida Jones, Kirsten Dunst and Selma Blair. The party, which took place in LA, also marked the opening of their pop-up shop. “I was interested in creating a collection that wasn’t in any way disposable. It was about pieces you’d create and keep forever, things that have a permanence to it,” designer Erdem Moralioglu said. #wwdeye (📷: Katie Jones)
Renee Zellweger in yellow in 2001 and again in 2017. Chosen as one of the 12 @pantone Leading Spring Colors (and dubbed “Meadowlark”), it only makes sense that the bright hue stands the test of time and is making a resurgence this season, seen already on stars like @blakelively and @gigihadid. (📷: Donato Sardello & @rexfeatures) #wwdfashion #tbt
Dior’s 70th anniversary celebration continues with a new exhibition at the Royal Ontario Museum in Toronto. “Christian Dior,” which is scheduled to run through March 18, takes a look at the founders tenure from 1947 to 1057 and feature 40 designs. Pictured here is an evening gown from the Ailée, fall 1948-49 haute couture collection. #wwdfashion (📷: Brian Boyle)
As one of the most recognizable models in the world, Christy Turlington Burns has an insider’s view of the fashion industry and the allegations of sexual harassment swirling around it. “I can say that harassment and mistreatment have always been widely known and tolerated in the industry. The industry is surrounded by predators who thrive on the constant rejection and loneliness so many of us have experiences at some point in our careers,” Turlington told WWD, along with her suggestions for how the modeling world should protect younger women and men. Read more on WWD.com. Link in bio. (📷: Tony Palmieri) #wwdnews
@asics America has tapped a new brand ambassador: famed DJ/record producer @steveaoki. This initiative is intended to set the tone for the new brand identity and philosophy and will include partnerships with influencers and in-store and off-line activations that will continue into next year. This is Asics’ most significant marketing effort in two decades, and is expected to attract younger consumers to the brand. #wwdfashion
24-year-old Jean Prounis is redefining the rules of jewelry. Formerly a studio assistant to Jemima Kirke and a design apprentice at Ghuran, she focuses on handcrafted subtleties and ancient goldsmithing techniques. “There was a really sterile feel in the environment and I wanted to have jewelry with character that shapes how you wear it everyday,” Prounis said. Each piece is hand made in New York, either by Prounis or three other jewelers in the district. #wwdfashion
“These collections continue to build on that vision, empowering differently abled adults to express themselves through fashion,” said @tommyhilfiger of his line of adaptive apparel, which launches today. The line consists of 37 men’s and 34 women’s styles based upon the pieces from the spring Tommy Hilfiger sportswear collection. #wwdnews