Coach, Inc. (COH): New Analyst Report from Zacks Equity Research - Zacks Equity Research Report

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Summary:
Coach saw its top and bottom lines coming ahead of the Zacks Consensus Estimate, when it posted first-quarter fiscal 2015 results. The quarter also highlighted higher international sales. However, what came as a drawback was that both sales and earnings per share fell 9.7% and 31.2%, respectively, from the year-ago quarter. Management held sluggishness in North American handbag business responsible for the year-over-year decline. Coach now expects sales to decline in low double-digit on a constant currency basis in fiscal 2015 due to lower promotion and store closure. We believe a mature domestic market and cautious consumer spending environment also remain causes of concern. However, the company has undertaken transformation initiatives revolving around, product, stores and marketing to bring itself back on the growth trajectory. Currently, we maintain our Neutral recommendation on the stock.

Overview:

Founded in 1941 and headquartered in New York, Coach, Inc. (COH) is the designer and marketer of fine accessories and gifts for women and men in the United States and internationally. The Company offers lifestyle products, which include handbags, women's and men's accessories, footwear, jewelry, wearables, business cases, sunwear, travel bags, fragrance and watches.

Beginning with the first quarter of fiscal 2013, Coach operates under two business segments North American and International.

North American segment includes sales to customers via North American company-owned stores, including the Internet, and sales to North American wholesale customers and distributors. The segment represented approximately 65% of fiscal 2014 net sales.


International segment includes sales via company-operated outlets (including the Internet) and concession store-in-stores in Japan, mainland China, Hong Kong, Macau, Singapore, Taiwan, Malaysia, South Korea, the United Kingdom, France, Ireland, Spain, Portugal, Germany and Italy, as well as sales to wholesale customers and distributors in about 35 countries. The segment represented approximately 34% of fiscal 2014 net sales.


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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



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