Coach, Inc. a leading marketer of modern classic American accessories, announced that its excellent spring season results are trending above plan. The Company now expects that earnings for its second fiscal half will be at least $0.85 per diluted share, compared with the prior year's $0.64, an increase of at least 33%, with sales of at least $800 million. The company's previous guidance was at least $0.83 and the analysts' current consensus estimate is $0.84 per share.
These earnings per share expectations do not give effect to the two-for-one split in the form of a stock dividend payable on or about April 4, 2005 to shareholders of record as of the close of business on March 21, 2005.
Preparing to address investors at the Bear Stearns Retail, Restaurants & Apparel Conference on Thursday, March 10, 2005 in New York, Lew Frankfort, Chairman and Chief Executive Officer of Coach, Inc. said, “The vitality of our business reflects the continued vibrancy of the Coach brand, with robust sales trends across all channels and major markets – North America and Japan; and further expansion of our operating margins. Consumers have responded enthusiastically to our early spring offerings, including the novel 'Dot' group of gallery totes and accessories, which sold extremely well in January, as well as new styles and colors in our Soho and Hamptons Leather collections, and our fun, fresh Valentine's Day group of handbags and accessories.”
“We're enthusiastic about our powerful product flow for the rest of the spring season. Earlier this week we launched our expanded collection of Hamptons Weekend, where we've added styles, sizes and more color choices in our nylon collection, along with a Scribble fabrication, a playful interpretation of our Signature pattern. This expanded group is aimed to enhance Coach's appeal in the casual, weekend market. We've also just brought back an updated Soho twill collection for its third consecutive year. Later this spring we will be building upon previous successes by offering a new range of handbags and accessories in novelty materials such as straw, metallic and new Signature fabrics.”
“Clearly, Coach's strength speaks to our ability to continue to build lasting market share through improved productivity of existing locations and increased distribution, as we continue to capture a larger portion of our consumers' accessory wardrobe. Further, our focus on innovation, relevance and value, which resonates extremely well with consumer trends worldwide, bodes well for the future.”
The company now expects full fiscal year 2005 sales and diluted earnings per share of over $1.67 billion and at least $1.89, respectively, an increase of 27% in sales and 39% in earnings per share over last year. For the third quarter Coach is targeting at least: $400 million in sales and earnings per share of $0.43. For the fourth fiscal quarter, the company is targeting at least: $400 million in sales and earnings per share of $0.42. Coach continues to project U.S. comparable store sales gains of at least 10% in each channel for the second half of fiscal 2005, with sales in Japan rising at least 27% in constant currency with at least mid-single-digit same location sales growth.
The company also announced that it repurchased and retired 2,472,700 shares of common stock at an average cost of $54.95 thus far during the third fiscal quarter. At this time, approximately $35 million remains available for future repurchases under the existing program, which expires in August 2007.