NEW YORK — Less than a month after ending its fiscal year with a nearly 50 percent pop in net earnings, Coach Inc. upped its first-quarter earnings projection to above analysts' estimates while also saying three of its top executives will stay on with the company through at least August 2011.
In a statement Wednesday, Coach said because first-quarter results are tracking ahead of plan, the company expects earnings per share in the period to be at least 25 cents on sales of at least $445 million. Same-store sales are expected to be up in the low teens.
The consensus estimate of 20 analysts calls for a profit of 24 cents in the quarter ending Oct. 1 on sales of about $443 million. In comparison, Coach earned 17 cents a share in the first quarter of the prior year on sales of $344 million.
Coach also said it sees fiscal year 2006 EPS of at least $1.25 on sales of about $2.1 billion, which would be the first time the company surpasses the $2 billion mark. The Wall Street consensus is also for $1.25 with sales projected to be $2.11 billion.
On Aug. 2, when Coach reported fiscal-year 2005 earnings that jumped 48.5 percent to $388.7 million, the company offered first-quarter EPS guidance of at least 24 cents and full-year EPS at a minimum of $1.24.
"We have seen robust sales continue throughout the summer and into the start of the fall season across all business units," said Lew Frankfort, chairman and chief executive officer of New York-based Coach, in the statement. "Consumers have enthusiastically embraced our transitional and fall offerings, including the updated Hamptons Weekend, Soho and Hamptons Leather collections; the new sophisticated Signature Patchwork handbag group, and the Chelsea collection in leather and Optic Signature fabrications."
Regarding employment agreements with its top executives, the company said Frankfort; Reed Krakoff, president and executive creative director, and Keith Monda, president and chief operating officer, each have entered into three-year extensions of their initial five-year employment agreements. The extensions now put their agreements into effect through August 2011.
Frankfort said the extension of the agreements underscores "our optimism and continued commitment toward the business." He added that "ensuring the continuity of this leadership will be a key factor in providing excellent results well into the future."Investors liked what they heard and sent shares of Coach up 4.1 percent to close at $33.99 in Wednesday trading on the New York Stock Exchange.
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