Companies and Brands

Luxury Retailer Coach Raises Dividend, Beats Estimates to No Avail (COH, KORS, TUMI)

The high-end of the retail market has faced a few bumps in the first calendar quarter of 2012, with gasoline prices on a steady march higher while home prices continue to sink. Today’s earnings report from Coach Inc. (NYSE: COH), while better than expected on EPS and revenues, did not meet expected same-store sales targets for the company’s third fiscal quarter.

Two recently publicly traded companies could be making life a bit more difficult for Coach. Michael Kors Holdings Ltd. (NYSE: KORS) and Tumi Holdings Inc. (NYSE: TUMI) have now entered a sector dominated by LVMH Moet Hennessy Louis Vuitton (OTC: LVMUY.PK) and Coach.

Coach reported revenue of $1.11 billion for its third quarter, virtually on target with the consensus estimate of $1.10 billion. EPS came in at $0.77, better than the expected EPS of $0.75. What is hampering the shares today is a miss on same-store sales, which showed an increase of 6.7% for the quarter. Stifel Nicolaus’s analyst had an estimate of 7%.

And adding to the weight on the shares today is the simple fact that Coach didn’t have a blow-out quarter. Just meeting estimates — beating them by a little — isn’t enough to keep up investors’ spirits. Even a 33% jump in the dividend didn’t help. Coach will pay an annual dividend of $1.20/share beginning in July.

Over the past 12 months, Coach shares have gained nearly 39%. Year-to-date the company is up more than 18%, but Kors, which came public in December, is up nearly 59% in 2012. Tumi, which only came public last week, is down about -3.8% from a high of $28.70, more than 44% above the offering price of $18/share (Tumi’s underwriters did the company no favors).

The focus on men’s clothing and accessories will get sharper this year as the high-end retailers look for growth. In its last quarterly report, Coach noted that its men’s fashion revenue was on track to double, year-over-year, to $400 million in 2012. LVMH and Kors are also putting out more products aimed a male buyers, and Tumi probably won’t be far behind.

Coach shares are down about -3.4% at $72.60 in a 52-week range of $45.70-$79.70.

Paul Ausick

Want to Retire Early? Start Here (Sponsor)

Want retirement to come a few years earlier than you’d planned? Or are you ready to retire now, but want an extra set of eyes on your finances?

Now you can speak with up to 3 financial experts in your area for FREE. By simply clicking here you can begin to match with financial professionals who can help you build your plan to retire early. And the best part? The first conversation with them is free.

Click here to match with up to 3 financial pros who would be excited to help you make financial decisions.

 

Have questions about retirement or personal finance? Email us at [email protected]!

By emailing your questions to 24/7 Wall St., you agree to have them published anonymously on a673b.bigscoots-temp.com.

By submitting your story, you understand and agree that we may use your story, or versions of it, in all media and platforms, including via third parties.

Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.