Coach Beats Up on Analysts Yet Again

Coach (NYS: COH) reported earnings on Jan. 24. Here are the numbers you need to know.

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.

Revenue details
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 details
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.

Margin details
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.

Looking ahead
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.

Investor Sentiment
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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At the time this article was published Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor ofMotley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. The Motley Fool owns shares of Coach. Motley Fool newsletter services have recommended buying shares of Coach. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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