Strong international sales drove an increase in Coach’s fourth-quarter net income, but the company said the heavy promotional environment hit sales growth in its North American factory stores.
The New York-based brand was still able to post a 24.2 percent rise in fourth-quarter income to $251.43 million, or $0.86 cents a diluted share, a penny better than analysts’ expectations. This compared with year-ago net income of $202.48 million, or $0.68 cents a share.
Sales were $1.16 billion for its fourth fiscal quarter, compared with $1.03 billion in the same period prior year, a 12% growth. Analysts estimated revenues of $1.20 billion for the quarter. But the retailer fell below Wall Street’s sales projections of $1.20 billion.
“During the fourth quarter our international sales remained robust, driven by both distribution and productivity increases,” said chairman and chief executive officer Lew Frankfort. “In North America, however, an increasingly promotional environment led to lower growth than expected in factory stores. As a result, we responded by reinstating our prior practice of in-store couponing in a cross section of factory locations late in the period. It’s important to note that we have significant pricing flexibility and a variety of marketing levers available in this channel, which allow us to balance productivity gains and margin improvement.”
Also, the company announced that during the fourth fiscal quarter, it repurchased and retired about 2.5 million shares at an average cost of $67.79, spending a total of $169 million.
Coach added, “Our goals remain unchanged. We’re committed to achieving double-digit top- and bottom-line growth over our planning horizon.”