Coach, Inc. Reports Unaudited Consolidated Earnings Results for the Second Quarter and Six Months Ended December 31, 2016; Provides Earnings Guidance for the Full Year of Fiscal 2017
January 31, 2017 at 06:45 am EST
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Coach, Inc. reported unaudited consolidated earnings results for the second quarter and six months ended December 31, 2016. For the quarter, the company reported net sales of $1,321.7 million compared to $1,273.8 million a year ago. Operating income was $277.4 million compared to $261 million a year ago. Income before provision for income taxes was $272.3 million compared to $254.7 million a year ago. Net income was $199.7 million or $0.71 per diluted share compared to $170.1 million or $0.61 per diluted share a year ago. On non-GAAP basis, operating income was $294.3 million, net income was $211.2 million or $0.75 per diluted share compared to operating income of $285 million, net income of $188.4 million or $0.68 per diluted share a year ago.
For six months, the company reported net sales of $2,359.3 million compared to $2,304.1 million a year ago. Operating income was $443.3 million compared to $402.4 million a year ago. Income before provision for income taxes was $432.5 million compared to $389.4 million a year ago. Net income was $317.1 million or $1.13 per diluted share compared to $266.5 million or $0.96 per diluted share a year ago. On non-GAAP basis, operating income was $471.1 million, net income was $337.2 million or $1.20 per diluted share compared to operating income of $450 million, net income of $301.5 million or $1.08 per diluted share a year ago.
The following fiscal 2017 guidance is provided on a non-GAAP, 52-week basis versus 52-week basis. The Company is maintaining its operational outlook for fiscal 2017, while adjusting its revenue guidance based solely on current exchange rates. The Company's previous fiscal 2017 revenue guidance was for an increase of low-to-mid single digits, including an expected benefit from foreign currency of approximately 100-150 basis points. Given the significant strengthening of the U.S. dollar, the Company is now projecting revenue to increase low-single digits, including an expected negative impact from foreign currency of 50 basis points for the full fiscal year or over 100 basis points of pressure for the second half of the fiscal year based on current exchange rates. Importantly, the Company is maintaining its operating margin forecast for Coach, Inc. of between 18.5-19.0% for fiscal 2017. This guidance incorporates the negative impact of both Stuart Weitzman and the strategic decision to elevate the Coach brand's positioning in the North American wholesale channel, including a reduction in promotional events and the closure of about 25% of doors. Interest expense is still expected to be in the area of $25 million for the year while the full year fiscal 2017 tax rate is now projected at about 26% as compared to previous guidance of approximately 28%. Taken together, the Company continues to project double-digit growth in both net income and earnings per diluted share for the year.
Tapestry, Inc. is a global house of luxury accessories and lifestyle brands. The Company's brands include Coach, Kate spade New York, and Stuart Weitzman. The Company operates through three segments: Coach, Kate Spade and Stuart Weitzman. The Coach segment includes global sales of Coach products to customers through Coach operated stores, including e-commerce sites and concession shop-in-shops, and sales to wholesale customers and through independent third-party distributors. The Kate Spade segment includes global sales primarily of kate spade new york brand products to customers through Kate Spade operated stores, including e-commerce sites and concession shop-in-shops, sales to wholesale customers, and through independent third-party distributors. The Stuart Weitzman segment includes global sales of Stuart Weitzman brand products primarily through Stuart Weitzman operated stores, sales to wholesale customers, through e-commerce sites, and through independent third-party distributors.
Coach, Inc. Reports Unaudited Consolidated Earnings Results for the Second Quarter and Six Months Ended December 31, 2016; Provides Earnings Guidance for the Full Year of Fiscal 2017