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Coach's String Of Positive Earnings Surprises Continues

Coach Inc COH announced results for the fourth quarter ensuring the string of pleasant earnings surprise continued. In the preceding four quarters too, its earnings topped the Street estimates. However, its revenue fell shy of the estimates.

The luxury firm's profit for the three-month period was $82 million, or EPS of $0.29. In comparison, the company earned a profit of $12 million, or EPS of $0.04, in the year-ago period. On an adjusted basis, its net income would have been $126 million, or $0.45 a share, representing 47 percent year-over-year growth. This was $0.04 a share better than the analysts' estimate of $0.41.

Coach's net sales advanced 15 percent to $1.15 billion and fell short of the Street predictions of $1.17 billion revenue.

The luxury retailer's CEO, Victor Luis, said, "Our international businesses continued to grow, highlighted by double-digit increases in Mainland China and Europe, as well as sales gains in our directly operated businesses in Southeast Asia. Most importantly, we achieved the expected inflection in profitability, as we leveraged our expenses on the growth in the business."

Going forward, Coach expects revenues to grow between low- and mid-single digits in the fiscal year 2017. This included an expected gain from foreign currency of about 1 to 1.5 percentage points. Street is looking for 3.8 percent revenue growth.

In the pre-market trading, Coach shares gained $0.55, or 1.33 percent, to $42.00.

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