=Coach (COH) reported earnings on Tue 2 May 2017 (b/o)

Coach beats by $0.02, misses on revs; reaffirms 2017 guidance :

• Reports Q3 (Mar) earnings of $0.46 per share, $0.02 better than the Capital IQ Consensus of $0.44; revenues fell 3.7% year/year to $995.2 mln vs the $1.02 bln Capital IQ Consensus.
  • As planned, the Company's strategic decision to elevate the Coach brand's positioning in the North American wholesale channel through a reduction in promotional events and door closures negatively impacted sales growth by approximately 150 basis points in the quarter.
  • Gross margin for the quarter expanded 190 basis points from prior year to 70.9% on both a reported and non-GAAP basis.
• Reaffirms 2017 guidance:
  • Continues to expect revenues for fiscal 2017 to increase low-single digits, including the impact of currency (Consensus represents +1% rev growth expectation).
  • Continues to project double-digit growth in both net income and earnings per diluted share for the year (Consensus represents +8% EPS growth expectation)
  • Maintaining 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 now expected to be in the area of $20 million for the year while the full year fiscal 2017 tax rate is still projected at about 26%.