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.
“Azzedine has been one of the biggest influences in my life. He has always been such a strong, loving, fatherly figure to me. I call him Papa. His designs are indescribably unique, they are pieces of art. He knew how to make the female form look its loveliest. I have so many memories of him; my favorite might be during my first show with him in Paris. He liked me and he wanted to help me get more work. He called all his friends at Kenzo and Comme des Garcons, and asked them to book me. They said, ‘But she can’t walk!’ And he said, ‘but she has such a great ass!' His friendship and support has been the great privilege of my career. I can't imagine life without him. Repose en paix mon Papa.” - @stephanieseymour tells @wwd. #wwdfashion (📷: @steveeichner) #alaia #azzedinealaia
Azzedine Alaïa, flanked by two of his closest friends, models Stephanie Seymour and Naomi Campbell.
He designed Seymour’s dress for her 1995 wedding to Peter Brant, and treated Campbell (who famously called him Papa), like a daughter. For more on the legendary designer, tap the link in bio. #wwdfashion #alaia #azzedinealaia
Azzedine Alaïa's “I-did-it-my-way” ethos stood out starkly at a time when brands are experimenting with consumer-facing fashion shows, coed formats and trans-seasonal collections – anything to perk up lackluster sales of ready-to-wear in an age of Insta-everything. “It’s not creation anymore. This becomes a purely industrial approach,” the late designer told WWD in an interview last year. “But anyway, the rhythm of collections is so stupid. It’s unsustainable. There are too many collections.” Read more about the iconic designer’s life and work on wwd.com, link in bio. #wwdfashion #azzedinealaia (📷: @WWD Archive, 1986) #alaia
Sneaker reselling app @goat’s latest exhibit, "The Greatest: New York," tells the story of New York's sneaker culture. To celebrate the exhibit, an intimate crowd gathered on Thursday night at the pop-up gallery space, located at Platform in Culver City, to hear guest speaker and illustrator @esymai talk about her own rise in streetwear and women in the business. "For me I'm just someone who is creative. I like to create things," said Chang. #wwdfashion
Azzedine Alaïa, one of the most iconic couturiers of the modern era whose body-con designs defined Eighties fashion, has died in Paris. The diminutive Tunisian-born designer, known for his structured knitted dresses with fitted waists and impeccably cut, figure-hugging second skin silhouettes was deeply admired by his peers, and counted supermodel Naomi Campbell - his adoptive daughter - among his inner circle, one of a gang of glamazons including Farida Khelfa, Carla Bruni and Stephanie Seymour who became ambassadors of his style. (📷: Alexandre Guirkinger) #wwdblast