Coach’s Price Target Revised Downward after Mixed Fiscal 4Q17 Results
Coach’s (COH) weak guidance has led to a host of target price revisions on Wall Street.
Coach’s (COH) stock price crashed after it reported its fiscal 4Q17 results on August 15, falling 15% on guidance that fell short of Wall Street expectations.
Coach (COH) reported an 11% YoY (year-over-year) jump in its fiscal 4Q17 earnings, which stood at $0.50 per share for the quarter.
Coach’s (COH) international business accounted for 39% of its 4Q17 top line. Sales fell 1.7% YoY (year-over-year) to $442 million.
The Coach brand’s North America business, which accounted for 52% of the company’s fiscal 4Q17 top line, fell 3.3% YoY (year-over-year) to $565 million.
For fiscal 4Q17, Coach (COH) reported total revenues of $1.13 billion, which is 1.8% lower than its revenues in fiscal 4Q16.
Coach reported adjusted diluted earnings of $0.50 per share, beating the Wall Street average profit estimate by $0.01.
KORS stock surged 21.5% on August 8, the day of its fiscal 1Q18 results, converting its year-to-date losses into gains.
KORS’s gross margin improved by 40 basis points to 60.3% of sales in fiscal 1Q18.
Behind Kors’s sales decline in fiscal 1Q18 were 8.2% and 10.2% declines in North American and European operations, which offset the 60% rise in Asian sales.
Michael Kors (KORS) reported a 3.6% YoY (year-over-year) decline in its fiscal 1Q18 sales, which stood at $952 million.
For fiscal 1Q18, Kors’s EPS came in at $0.90, or $0.28 higher than the estimate. Its revenue fell 3.6% YoY to $952 million but still beat the consensus estimate.
Michael Kors’ (KORS) weak guidance for fiscal 1Q18 brought the company a host of target price revisions.
Michael Kors’ fiscal 4Q17 gross profits fell 11.1% to $619.7 million, in line with the decline in its sales. Its gross margin remained flat at 58.2% of sales.
For fiscal 1Q18, Michael Kors’ (KORS) management is looking for EPS of $0.60–$0.64 on total sales in the range of $910 million–$930 million.
Michael Kors (KORS) has a strong cash flow position. The company ended fiscal 4Q17 with cash and cash equivalents of $228 million and net debt of -$95 million.
Michael Kors (KORS) reported an 11.2% year-over-year decline in its fiscal 4Q17 sales to $1.2 billion, beating Wall Street by ~$10 million. For fiscal 2017, KORS’ total sales fell 4.6% to ~$4.5 billion.
Michael Kors (KORS) reported fiscal 4Q17 EPS of $0.73, $0.03 higher than analyst estimates. KORS’ revenues fell 11.7% year-over-year to ~$1.1 billion, beating the consensus by $10.0 million.
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.