Earnings estimates for Coach have shown a downtrend since the
company reported second-quarter fiscal 2014 results. The company
disappointed on the sales front that fell 6% after falling 1%
during the first quarter due to sluggishness in the North American
market, and also fell short of the Zacks Consensus Estimate. The
bottom line also failed to impress, as earnings of $1.06 per share
missed the Zacks' expectation of $1.11 and tumbled 13.8% from the
prior-year quarter. The softness in results made the analysts less
constructive on the stock's future performance. Further, a mature
domestic market and difficult consumer spending environment remain
causes of concern. Moreover, a weaker Yen, higher labor costs and
inventory amortization would keep the margins under pressure.
Considering the bearish aspects with which the company is grappling
with, we are reiterating our Underperform recommendation.
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.
International segment includes sales to customers via
company-owned outlets in Japan, including the Internet, mainland
China, Hong Kong and Macau, Taiwan, Singapore, Korea and Malaysia,
and sales to wholesale customers and distributors in over 20
countries. It also includes Internet sales in China.
Coach, Inc. (COH): Read the Full Research
COACH INC (COH): Free Stock Analysis Report
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