Coach-Kate Spade Deal: What Investors Should Know
Coach (COH) agreed to buy Kate Spade (KATE) for a cash offer of $18.50 per share. If successful, the deal is expected to close in 3Q17.
Coach (COH), America’s leading luxury handbag and accessories maker, is buying Kate Spade (KATE) for a total transaction value of $2.4 billion.
Coach’s (COH) stock price rose 11.4% to $43.15 after it reported its results on May 2. The company is currently sitting on a YTD profit of 23%.
Coach (COH) reported a 5% YoY rise in its EPS for fiscal 3Q17, registering $0.46 per share.
For fiscal 3Q17, Coach (COH) reported total sales of $995 million, which is 3.7% lower YoY on a reported basis and 3% YoY lower on a constant currency basis.
Coach’s (COH) International business, which accounted for 43% of its top line in 3Q17, recorded a 4% YoY (year-over-year) fall in sales to $448 million.
For fiscal 3Q17, Coach reported earnings of $0.46 per share, beating the Wall Street analyst average estimates by $0.02.
Ralph Lauren reported a decline of 6% in global e-commerce revenues. This is unlike the general trend that has been noticed among the apparel and fashion companies.
On August 2, Fossil was trading at a PE multiple of 12.9x. Fossil’s valuation multiple has fallen by 9% since the announcement of its 1Q16 results.
Fossil’s (FOSL) margins have been in a declining trend during recent quarters.
Fossil’s adjusted earnings per share have beaten the consensus estimates six times in the last nine quarters.
Wall Street analysts expect affordable luxury brand Coach to grow its adjusted earnings per share by $0.05 year-over-year to $0.41 in fiscal 3Q16.
Coach expects its overall sales to rise at a high single-digit pace, spurred by the outperformance of footwear brand Stuart Weitzman.
Coach (COH) made $2.3 billion in sales in fiscal 1H16. Sales rose 2% year-over-year (or YoY) in reported terms and 5.1% in currency-neutral terms.
Affordable luxury pioneer Coach is slated to declare its earnings for fiscal 3Q16 on April 26, 2016. Coach has a market capitalization of $11.1 billion.
Fossil Group (FOSL) reported its earnings for 4Q15, surprising Wall Street when it reported its adjusted EPS as 20.7% higher than the consensus estimate.
Coach (COH) has left its revenue and operating margin guidance unchanged for fiscal 2016.
Stuart Weitzman’s results were one of the brightest spots in Coach’s (COH) fiscal 2Q16 earnings release.
Coach (COH) reported positive same-store sales in Mainland China during 2Q16, though headwinds in Hong Kong and Macau remained.
Sales trends for luxury brands may continue to grow in Europe due to monetary expansion and the weak euro.