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Citi Doesn't Expect Any Earnings Disappointments From Coach Or Michael Kors

Citi Doesn't Expect Any Earnings Disappointments From Coach Or Michael Kors - Coach, Inc. NYSE:COH, Michael Kors Holdings Limited NYSE:KORS

Major Internet and technology related companies have already reported their quarterly earnings results, so investor attention will now shift to the retail and fashion space. On deck for earnings include two of the most notable names in the handbag space: Coach Inc COH and Michael Kors Holdings Ltd KORS.

In a research report published Tuesday, Paul Lejuez of Citi suggested that "generally improved trends" across the retail space in June and positive commentary from high-end names such as LVMH should reassure investors that Coach and Michael Kors aren't going to disappoint investors.

Coach: Expect Positive Comps

Lejuez is expecting Coach (reporting Tuesday, August 9) to earn $0.40 per share in its fourth fiscal quarter on a 1 to 3 percent U.S. comp gain.

The analyst stated that the company's full-price stores are performing "better" and benefited from limited edition products which elevated the brand. Meanwhile, Coach's factory channel benefited as well in the quarter due to improved weather conditions. However, the analyst did cite this segment its "biggest challenge," as the company won't be able to reduce promotional activity and simultaneously drive sales.

Kors: Expect A Beat

Lejuez is modeling Michael Kors (reporting Wednesday, August 10) to earn $0.78 per share in its first fiscal quarter 2017. However, the analyst is also expecting an overall comps decline of 3 to 5 percent and a 15 to 16 percent dip in wholesale sales.

Lejuez stated that while Michael Kors' trends are "far from robust overall," the company did benefit from an improvement in traffic in June.

At time of writing, Kors was down 2.44 percent at $51.61, while Coach was down 3.89 percent at $41.77.

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