Coach Inc. (NYSE: COH) reported fiscal fourth-quarter and full-year 2016 earnings Tuesday. For the quarter, the luxury goods maker posted adjusted diluted earnings per share (EPS) of $0.45 on revenues of $1.15 billion. In the same period a year ago, the company reported EPS of $0.29 on revenues of $1 billion. Fourth-quarter results also compare to the Thomson Reuters consensus estimates for EPS of $0.41 and $1.17 billion in revenues.
For the full year, Coach posted adjusted EPS of $1.98, compared with a total of $1.92 in the prior year. Full-year revenues were also up, at $4.49 billion compared with $4.18 billion a year ago. Analysts were forecasting EPS of $1.93 on revenues of $4.56 billion. Fiscal year 2016 included one additional week, which added $0.07 per share to earnings.
Coach shares have added more than 14% over the past 12 months, performing somewhat better than the S&P 500, which has risen by 12.6% in the same period. Operating margin improved by 200%, from 3.9% to 10.1% on a GAAP basis and by 39%, from 12.6% to 15.1% on a non-GAAP basis.
The company’s CEO, Victor Luis, said:
Our strong fourth quarter results – in which we achieved positive North America comparable store sales and drove increases across key financial metrics- capped a year where we returned the Coach brand to growth. … Most importantly, we achieved the expected inflection in profitability, as we leveraged our expenses on the growth in the business.
In its outlook for the 2017 fiscal year, Coach expects revenue to rise by low-to-mid single digits, including an expected benefit of 100 to 150 basis points related to currency exchange effects. Operating margin is forecast at 18.5% to 19% and net income and EPS are projected to grow at double-digit rates. Analysts have forecast 2017 EPS at $2.20 on revenues of $4.67 billion.
The company’s EPS outlook is a little below the current analyst forecast, while the revenue forecast is at the low end of Coach’s guidance. At best a mixed bag, and combined with the lower-than-expected revenues for the quarter and the full 2016 fiscal year will probably weigh on shares in Tuesday trading.
Shares traded down about 3.3% in Tuesday’s premarket, at $40.10 in a 52-week range of $27.22 to $43.71. The consensus 12-month target price for the stock was $43.59 before the report.
The Average American Has No Idea How Much Money You Can Make Today (Sponsor)
The last few years made people forget how much banks and CD’s can pay. Meanwhile, interest rates have spiked and many can afford to pay you much more, but most are keeping yields low and hoping you won’t notice.
But there is good news. To win qualified customers, some accounts are paying almost 10x the national average! That’s an incredible way to keep your money safe and earn more at the same time. Our top pick for high yield savings accounts includes other benefits as well. You can earn up to 3.80% with a Checking & Savings Account today Sign up and get up to $300 with direct deposit. No account fees. FDIC Insured.
Click here to see how much more you could be earning on your savings today. It takes just a few minutes to open an account to make your money work for you.
Our top pick for high yield savings accounts includes other benefits as well. You can earn up to 4.00% with a Checking & Savings Account from Sofi. Sign up and get up to $300 with direct deposit. No account fees. FDIC Insured.
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.
Latest from 24/7
Our expert who first called NVIDIA in 2009 is predicting 2025 will see a historic AI breakthrough.
You can follow him investing $500,000 of his own money on our top AI stocks for free.