Coach’s Earnings Fall

It’s always interesting to keep on eye on how well high-end retailers are doing. Consumers tend to cut back on luxury items during a recession.
Coach (COH), the handbag maker, just reported bleak earnings.

Profit for the quarter ended June 27 fell to $145.8 million, or 45 cents per share, from $213.5 million, or 62 cents per share, a year ago. Excluding one-time items, including tax accounting adjustments and other items, net income totaled 43 cents per share.
Revenue fell less than 1 percent to $777.7 million from $781.5 million last year.
Analysts polled by Thomson Reuters, on average, predicted a profit of 43 cents per share on revenue of $780.4 million. Analyst estimates typically exclude one-time items.

When sales are flat and profits fall, that means that profit margins drop. Running the math, the profit margin is close to 19% which is down from 27% a year ago. Still, Coach has pretty high margins for a retailer.

Posted by on July 28th, 2009 at 9:01 am


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