NEW YORK — Better-than-expected sales led Coach Inc. to increase its earnings guidance for the first quarter and full fiscal year.
For the three months ending Sept. 27, the New York-based accessories manufacturer said earnings are now forecast to be at least 36 cents a diluted share on sales of $245 million or more. Last year the firm had earnings of 24 cents on sales of $198.2 million. Previously, Coach had expected earnings per share of at least 33 cents, while the current Wall Street consensus estimate is 34 cents.
Coach said the earnings forecast does not give effect to the 2-for-1 stock split in the form of a stock dividend to be paid on or about Oct. 1 to shareholders of record on Sept. 17. Adjusting for the split in both years, EPS is projected to be 18 cents versus 12 cents in last year’s first quarter.
“Our increased first-quarter expectations are due to higher sales projections and further margin expansion,” said chief executive officer Lew Frankfort in a statement. “U.S. comparable-store sales are trending ahead of expectations led by retail stores, while we continue to experience double-digit increases in same-location sales in Japan this quarter.”
Bestsellers over the summer included Coach’s transitional handbag and accessories offerings, Frankfort said, and the company’s just-introduced fall handbags in leather and suede combinations are moving briskly, as well.
With the 3 cent increase in quarterly EPS, Coach now expects yearend EPS on a pre-split basis of at least $1.95 on sales of $1.1 billion. Previously, the firm had forecast full-year earnings of not less than $1.92, while the Wall Street estimate is $1.94. In the prior fiscal year, Coach recorded earnings of $1.58 a share on sales of $719.4 million.