Net income nearly doubled to $151.7 million, or 53 cents per share, in the quarter ended July 1, amid a 16% decline in selling and general expenses, compared to net income in year-ago period of $82 million. Earnings, adjusted for non-recurring gains, came to 50 cents per share. Analysts had estimated earnings of 49 cents per share.
Net sales declined1.8% to $1.13 billion from $1.15 billion in the year-ago period, missing estimates. (The prior-year period included an extra week of sales.) Total North American Coach brand sales increased 4% over prior year, while North American direct sales rose 5% on a dollar basis and 6% on a constant currency basis for the quarter. Both North American aggregate and bricks-and-mortar same- store sales rose approximately 4%.
Coach noted that, as planned, sales at North American department stores declined approximately 40% at a POS and approximately 20% on a net sales basis as the company has now started to anniversary the pullback in shipments into the channel.
Neil Saunders, managing director of GlobalData Retail, said that Coach’s decision to reduce reliance on department stores is justified by the increasing gap between their selling environments and those in Coach’s own stores.
“Over the past half year, Coach has put considerable effort…