Coach Q4 Results Top Estimates; Shares Rise - Update

(RTTNews) - Handbags and accessories retailer Coach, Inc. (COH) Tuesday reported a sharp fall in fourth-quarter profit, reflecting lower sales and charges related to realignment of inventory, impairment charges and costs related to store closures. Adjusted earnings, as well as revenues topped analysts' expectations. The shares rose more than 5 percent in the morning trade.

Victor Luis, chief executive officer said, "The fourth quarter capped a challenging year for the company, most notably in the North America women's bag and accessory business. However, it was also a year of many accomplishments for Coach..."

For the fourth quarter, the company's net income fell to $75.28 million or $0.27 per share from $221.34 million or $0.78 per share last year. Excluding transformation and other related actions, net income for the quarter totaled $164 million or $0.59 per share, compared to net income of $254 million or $0.89 per share in the prior-year quarter.

On average, 33 analysts polled by Thomson Reuters expected earnings of $0.53 per share for the quarter. Analysts' estimates typically exclude special items.

Net sales fell 7 percent to $1.14 billion from $1.22 billion reported in the same period of the prior year. On a constant currency basis, total sales declined 6 percent for the period. Analysts expected revenues of $1.09 billion.

For the fiscal year, the company posted net income of $781.34 million or $2.79 per share, lower than $1.03 billion or $3.61 per share in the prior year. Adjusted earnings were $3.10 per share, while it was $3.73 per share last year.

Annual sales fell 5 percent to $4.81 billion from $5.08 billion in the preceding year.

Further, the board declared a quarterly cash dividend of $0.3375 per share, to shareholders of record on September 9, 2014, payable on September 29.

COH is currently trading at $36.12, up 5.29 percent, on a volume of 4.46 million shares.