Shares of Coach Inc. were off nearly 12 percent in midday New York Stock Exchange trading Tuesday after the firm posted strong first-quarter results but disappointed investors with holiday guidance that reflected concern about the tone of retail business.
During the three months ended Sept. 29, the New York-based purveyor of accessories and gifts for women and men posted net income of $154.8 million, or 41 cents a diluted share, 23.2 percent better than the $125.6 million, or 34 cents, reported in the comparable quarter of last year. Analysts on average expected earnings of 40 cents. Excluding discontinued operations, first-quarter earnings in last year’s period were 31 cents a diluted share.
Sales advanced 27.8 percent to $676.7 million from $529.4 million in the year-ago quarter. The company said wholesale revenues soared 35 percent to $169 million while direct-channel sales increased 26 percent to $508 million.
“While we’re well positioned for the holiday season, we are however concerned with recent traffic trends in our North American retail stores, reflecting the retail environment and the unusually difficult comparisons with last year,” said Lew Frankfort, chairman and chief executive officer, in a statement. “Thus, we believe it’s prudent to be more conservative in our comparable-store sales guidance for the balance of the fiscal year.
“At the same time, it’s important to underscore our overall continuing positive outlook, including the delivery of a 20 percent revenue gain in this holiday quarter,” he continued.
During the holiday quarter, same-store sales are expected to grow in the low-single digits, although strong traffic trends in higher-end outlet centers are expected to give stores in this channel a lift, with same-store sales projected to land in the mid-teens.
Although the company reiterated its expectations for full-year earnings per diluted share of $2.06 on sales of $3.17 billion, its second-quarter estimates of earnings per diluted share of 68 cents on sales of $970 million fell below analysts’ estimates of 70 cents and $984 million, respectively.
Despite recent weakness in Coach’s own stores, Frankfort identified handbags selling for more than $400 as its “fastest-growing price segment.”
Shares of Coach were down 11.9 percent, or $4.93, to $36.54 in midday trading Tuesday.For complete coverage of Coach's results, see Wednesday's WWD.
@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