The 10-second takeaway
For the quarter ended Dec. 31 (Q2), Coach beat slightly on revenues and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue improved, and earnings per share improved significantly.
Gross margins dropped, operating margins contracted, net margins were steady.
Coach booked revenue of $1.4 billion. The 23 analysts polled by S&P Capital IQ looked for a top line of $1.4 billion. Sales were 15% higher than the prior-year quarter's $1.3 billion.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions.
EPS came in at $1.18. The 26 earnings estimates compiled by S&P Capital IQ predicted $1.15 per share. GAAP EPS of $1.18 for Q2 were 18% higher than the prior-year quarter's $1.00 per share.
Source: S&P Capital IQ. Quarterly periods. Figures may be non-GAAP to maintain comparability with estimates.
For the quarter, gross margin was 72.2%, 20 basis points worse than the prior-year quarter. Operating margin was 34.6%, 130 basis points worse than the prior-year quarter. Net margin was 24%, about the same as the prior-year quarter.
Next quarter's average estimate for revenue is $1.1 billion. On the bottom line, the average EPS estimate is $0.74.
Next year's average estimate for revenue is $4.7 billion. The average EPS estimate is $3.45.
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 2,248 members out of 2,417 rating the stock outperform, and 171 members rating it underperform. Among 806 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 776 give Coach a green thumbs-up, and 30 give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Coach is outperform, with an average price target of $69.75.
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