Coach Q2 Profit Declines On Weak North America Performance, Results Miss View

(RTTNews) - Handbags and accessories retailer Coach, Inc. (COH) Wednesday reported a decline in second-quarter profit, mainly hurt by weakness in North America. Earnings per share as well as revenues missed analysts' expectations. The shares are down about 6 percent in pre-market trading.

According to the company, its performance in North America was impacted by substantially lower traffic in its stores and by its decision to limit access to its e-factory flash sales site.

For the second quarter, net income totaled $297.44 million or $1.06 per share, lower than $352.76 million or $1.23 per share in the previous year.

On average, 30 analysts polled by Thomson Reuters expected earnings of $1.11 per share for the quarter. Analysts' estimates typically exclude special items.

Net sales declined 6 percent to $1.42 billion from $1.50 billion a year ago, while analysts estimated revenues of $1.48 billion. On a constant currency basis, sales declined 3 percent for the quarter.

Total North American sales decreased 9 percent. North American direct sales fell 8 percent, with comparable store sales decline of 13.6 percent. Meanwhile, International sales increased 2 percent from last year.

Chief Executive Officer Victor Luis said, "During the holiday quarter, total sales fell slightly in constant currency as weakness in our North American women's bag and accessories business offset strong growth in Men's, footwear, and robust results in emerging Asian markets and Europe."

Gross margin was 69.2 percent, compared to 72.2 percent reported a year earlier.

COH closed Tuesday's trading at $52.55 on the NYSE. In the pre-market activity on Wednesday, the shares are down 6.18 percent.