What To Expect From Coach In Q3 FY 2016?
Factors To Consider:
1) Dwindling Bottom-Line Performance
- EPS fell 31.2%, 32.1%, 47.1%, and 47.5% y-o-y in Q1-Q4 FY 2015.
- In FY 2016, this has improved to drops of 22.6% and 5.6% in Q1 and Q2.
- Foreign currency headwinds and cautious consumer spending continue to dampen outlook.
2) Transformation Initiatives
- Coach has undertaken a multi-year strategic plan to transform the brand and reinvigorate growth.
- Measures include capital improvement of stores, closure of underperforming stores, inventory realignment, incremental advertisement spending, and curtailment of promotional activities.
- Wide availability of its premium products had tarnished the brand image, making factory outlets its highest revenue generator.
- 65 stores remodeled to luxury store concept in Q2, contributing to an improvement in North American comps — a fall of 4.2%, as compared to a decline of 22% in Q2 FY 2015.
3) Recovery In Chinese Tourists In Europe And Japan
- A pick-up in Chinese demand was witnessed in Europe and Japan, with increased tourist inflows.
- This has offset the decline seen in Hong Kong and Macau.
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Have more questions on Coach? See the links below:
- Is Coach’s Transformation Plan Working?
- What Is The Breakdown Of The Charges Associated With Coach’s Transformation Plan?
- What is Coach’s Revenue And EBITDA Breakdown?
- Coach: Year 2015 In Review
- How Has Coach’s Revenue And EBITDA Composition Changed In The Last 3 Years?
- Is The Men’s Segment Becoming Big Business For Coach?
- By What Percentage Did Coach’s Revenue & EBITDA Decline In The Last 3 Years?
- How Will Coach’s Revenue And EBITDA Change In The Next 3 Years?
- What Is Coach’s Fundamental Value Based On Expected 2016 Results?
Notes:
Global Large Cap | U.S. Mid & Small Cap | European Large & Mid Cap
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