Coach, VS, Columbia Sportswear crown Wall Street session

Thursday, 27 October 2011
U.S. stock futures were mixed Tuesday on corporate earnings reports and ahead of a fresh reading on consumer confidence. Coach, VF Corporation and Columbia Sportswear Company cheered Wall Street beating all analysts’ expectations and even present record net sales, as per Columbia Sportswear.

Coach, Inc. Tuesday reported sales of $1.05 billion for its first fiscal quarter ended October 1, 2011, compared with $912 million reported in the same period of the prior year, an increase of 15%. Net income for the quarter totaled $215 million, with earnings per diluted share of $0.73. This compared to net income of $189 million and earnings per share of $0.63 in the prior year's first quarter, representing increases of 14% and 16%, respectively. For the quarter, operating income totaled $322 million, up 13% from the $286 million reported in the comparable year-ago period, while operating margin was 30.7% versus 31.3% reported for the prior year. During the quarter, gross profit rose 13% to $765 million from $676 million a year ago. As expected, gross margin expanded sequentially from the 71.8% recorded in the fourth quarter to 72.8%, compared with 74.2% a year ago. SG&A expenses as a percentage of net sales totaled 42.1%, as compared to 42.8% reported in the year-ago quarter. Lew Frankfort, Chairman and Chief Executive Officer of Coach, Inc., said, "Our strong results this quarter once again reflect the strength of our brand proposition and the vitality of the category, as our customers look to update their wardrobes through our lifestyle accessories offering. In North America, we are continuing to grow our share of an expanding market, while in developing geographies we are leveraging the inherent opportunity, investing in distribution and marketing initiatives”.

Right after releasing their numbers for the first nine months of the year, equities research analysts at UBS AG raised their price target on shares of Coach to $67.00 in a research issued note to investors on Wednesday. Shares of Coach traded up 1.15% during mid-day trading on Wednesday, hitting $62.27. Coach has a 52 week low of $45.70 and a 52 week high of $69.20. The stock’s 50-day moving average is $57.47 and its 200-day moving average is $58.75. The company has a market cap of $17.997 billion and a price-to-earnings ratio of 21.08.

Also taking the profit wave was VS Corporation, which has seen its net income rise $300.7m (£187.8m) in the third quarter. Gross margins declined in the period to 45.3% of sales down from 46.4% of sales in the previous year quarter. The group said this was because the cost of goods sold rose faster than revenues, largely due to rising cotton prices. However, the luxury fashion brands owner –which holds names such as - Wrangler, 7 For All Mankind and Timberland - posted a 23.9% rise in Q3.

Third in cheering American markets was Columbia Sportswear Company when announcing record net sales of $566.8 million for the quarter ended September 30, 2011, a 12 percent increase compared with net sales of $504.0 million for the same period of 2010, including a benefit of 3 percentage points from changes in currency exchange rates. Third quarter net income increased 29 percent to $67.5 million, or $1.98 per diluted share, including a benefit of $0.04 per share from a lower income tax rate, compared to net income of $52.2 million, or $1.53 per diluted share, for the same period of 2010.

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