UNITED STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM 8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of
report (Date of earliest event reported): August 4, 2015
|
Coach,
Inc.
|
|
(Exact
name of registrant as specified in its charter)
|
|
Maryland
|
|
|
|
1-16153
|
|
|
|
52-2242751
|
|
(State of Incorporation)
|
|
(Commission File Number)
|
|
(IRS Employer
Identification No.)
|
|
516 West 34th Street, New York, NY 10001
|
|
(Address
of principal executive offices) (Zip Code)
|
|
(212) 594-1850
|
|
(Registrant’s telephone number, including area code)
|
Check the
appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any
of the following provisions:
⃞
Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
⃞
Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
⃞
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
⃞
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
Item 2.02 Results of Operations and Financial Condition.
On August 4, 2015, Coach, Inc. (the “Company”) issued a press release
(the “Press Release”) in which the Company announced its financial
results for its fourth quarter and fiscal year ended June 27,
2015. All information in the Press Release is being furnished to the
Securities and Exchange Commission and shall not be deemed “filed” for
purposes of Section 18 of the Securities Exchange Act of 1934 (the
“Exchange Act”) or otherwise subject to liability under that section,
nor shall it be deemed incorporated by reference in any filing under the
Securities Act of 1933, as amended, or the Exchange Act, except as
expressly set forth by specific reference in such a filing.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits. The following exhibit is being
furnished herewith:
99.1 Text of Press Release, dated August 4, 2015
SIGNATURE
Pursuant to
the requirements of the Securities Exchange Act of 1934, the registrant
has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Dated:
|
August 4, 2015
|
|
|
|
|
|
|
COACH, INC.
|
|
|
|
|
|
By:
|
/s/ Todd Kahn
|
|
|
|
Todd Kahn
|
|
|
|
Global Corporate Affairs Officer,
|
|
|
|
General Counsel & Secretary
|
EXHIBIT INDEX
99.1
|
Text of Press Release, dated August 4, 2015
|
Exhibit 99.1
Coach
Reports Fourth Quarter and Fiscal Year Earnings Per Share of $0.31 and
$1.92 Excluding Transformation-Related Charges and Acquisition Costs;
$0.04 and $1.45 on a GAAP Basis
Board
Declares Quarterly Dividend
NEW YORK--(BUSINESS WIRE)--August 4, 2015--Coach Inc. (NYSE:COH)
(SEHK:6388), a leading New York design house of modern luxury
accessories and lifestyle brands, today reported net sales of $1.00
billion for its fourth fiscal quarter ended June 27, 2015, including a
$43 million contribution from the May acquisition of Stuart Weitzman.
This compared with $1.14 billion reported in the same period of the
prior year, a decrease of 12%. On a constant currency basis, total sales
declined 8% for the period. Net income for the quarter totaled $85
million, with earnings per diluted share of $0.31, excluding
transformation-related charges and acquisition costs. The acquisition of
Stuart Weitzman contributed $2 million to net income and $0.01 to
earnings per diluted share for the quarter. Net income in the fourth
quarter of FY14 totaled $164 million with earnings per diluted share of
$0.59, excluding transformation and other actions. Reported net income
for the fourth quarter of FY15 totaled $12 million with earnings
per diluted share of $0.04 compared to the prior year’s reported net
income of $75 million and earnings per diluted share of $0.27.
For the fiscal year ended June 27, 2015, Coach, Inc. net sales declined
13% to $4.19 billion from $4.81 billion the prior fiscal year while net
income excluding transformation-related charges and acquisition costs
was $531 million versus $870 million in the prior year. On a constant
currency basis, sales declined 11% for the year. In addition, diluted
earnings per share on a non-GAAP basis totaled $1.92 as compared to
$3.10 in the prior year. Reported net income for the year totaled $402
million and earnings per diluted share were $1.45, compared to reported
net income for the prior year of $781 million with earnings per diluted
share of $2.79.
Victor Luis, Chief Executive Officer of Coach, Inc., said, “We are
pleased with our fourth quarter and full year progress on the
comprehensive plan we laid out a year ago to reinvigorate our brand and
business. Our execution of these strategic initiatives and resulting
performance has been consistent with our expectations and underscores
our confidence in the path we’ve chosen. As we moved through Fiscal
2015, we drove sequential improvement in our North America bricks and
mortar business while dramatically reducing the number of promotional
impressions in the marketplace against a backdrop of heightened
promotional activity. In addition, our international businesses posted
moderate growth on a constant currency basis, highlighted by a
double-digit increase in Europe and strong growth in China, driven
entirely by the Mainland, as sales approached $600 million.”
“Importantly, our brand transformation gained momentum
across our three key brand pillars: product, stores and marketing. We
successfully introduced Stuart Vevers’s product across our multi-channel
distribution, continued to open and renovate modern luxury concept
stores globally, and had an overwhelmingly positive reception to our
Men’s and Women’s fashion presentations. We also took an important step
in becoming a multi-brand company, with the acquisition of Stuart
Weitzman, which is expected to be an additional growth driver for the
company.”
For the quarter on a non-GAAP basis, Coach, Inc. operating income
totaled $126 million compared to $231 million in the prior year, while
operating margin was 12.6% versus 20.4%. During the quarter, on a
non-GAAP basis, gross profit totaled $692 million versus $789 million a
year ago, while gross margin was 69.0% versus 69.4%. SG&A expenses, as a
percentage of net sales, totaled 56.4% on a non-GAAP basis, compared to
49.0% in the year-ago quarter. Excluding the contribution of $4 million
from the acquisition of Stuart Weitzman, non-GAAP operating income
totaled $122 million in the quarter, while operating margin was 12.7%.
Similarly, excluding the contribution of $24 million from the
acquisition of Stuart Weitzman, Coach brand gross profit was $668
million with a gross margin of 69.5%.
For the quarter on a GAAP basis, Coach, Inc. reported operating income
totaling $39 million, while operating margin was 3.9%. Reported gross
profit was $688 million, while gross margin was 68.5%. SG&A expenses, as
a percentage of net sales, totaled 64.6% on a reported basis. Similarly,
on a reported GAAP basis, operating income for the fourth quarter of
FY14 was $100 million, while operating margin was 8.8%. Reported gross
profit was $706 million, while gross margin was 62.2% and SG&A expenses,
as a percentage of net sales, totaled 53.4% on a reported basis.
For the full year FY15, on a non-GAAP basis, Coach, Inc. operating
income totaled $788 million versus $1.25 billion in the prior year,
while operating margin was 18.8% versus 26.0%. Non-GAAP gross profit was
$2.92 billion as compared to $3.38 billion a year ago. Gross margin was
69.6% versus 70.3% a year ago, on a non-GAAP basis. SG&A expenses, as a
percentage of net sales, totaled 50.8% on a non-GAAP basis, compared to
44.3% in fiscal 2014. Excluding the contribution of Stuart Weitzman,
non-GAAP operating income totaled $784 million for the full year, while
operating margin was 18.9%. Similarly, Coach brand gross profit was
$2.89 billion with a gross margin of 69.7%.
For the full year FY15 on a GAAP basis, Coach, Inc. reported operating
income totaled $618 million, while operating margin was 14.7%. Reported
gross profit was $2.91 billion, while gross margin was 69.4%. SG&A
expenses, as a percentage of net sales, totaled 54.6% on a reported
basis. Similarly, on a reported basis, operating income for the fiscal
year 2014 was $1.12 billion with a 23.3% margin, gross profit was $3.30
billion with a 68.6% margin, and the SG&A expense ratio was 45.3%.
During the fourth quarter of FY15, the company recorded charges of $66
million under its multi-year transformation plan. These charges
consisted primarily of accelerated depreciation for renovations, lease
termination costs related to store closures and organizational
efficiency costs. In addition, the company recorded costs of
approximately $21 million associated with the acquisition of Stuart
Weitzman in the fourth quarter. These actions taken together increased
the company’s SG&A expenses by about $83 million and cost of sales by
about $5 million, negatively impacting net income by $73 million after
tax or about $0.27 per diluted share in the fourth quarter.
For the full fiscal year of 2015, the company recorded total
transformation-related charges of $146 million and costs associated with
the Stuart Weitzman acquisition of $25 million, increasing SG&A expenses
by $161 million in total, cost of sales by $10 million, reducing net
income by $129 million after tax or $0.47 per diluted share.
During the fourth quarter of FY14, the company recorded charges of
approximately $132 million for transformation and other actions. These
charges consisted primarily of the realignment of inventory, impairment
charges and costs related to store closures. These actions increased the
company’s cost of sales by $82 million and SG&A expenses by $49 million
in the period, negatively impacting net income by $88 million after
tax or $0.32 per diluted share.
The Company ended FY15 with inventory of $485 million including $33
million associated with the acquisition of Stuart Weitzman. This
compared to ending inventory for the Coach brand of $526 million for
FY14. Therefore, inventory declined 8% on a consolidated basis and 14%
for the Coach brand.
The company also announced that its Board of Directors declared a
quarterly cash dividend of $0.3375 per common share, maintaining an
annual rate of $1.35. The dividend is payable on September 28, 2015 to
shareholders of record as of the close of business on September 8, 2015.
Fourth fiscal quarter and fiscal year sales results in each of Coach’s
primary segments were as follows:
-
Total North American sales decreased 20% on a reported basis for the
quarter to $556 million from $691 million last year, and 19% on a
constant currency basis. North American direct sales also declined 20%
on a dollar basis and 19% on a constant currency basis for the
quarter, with comparable store sales down 19% including the impact of
reduced eOutlet events, which pressured total comparable stores sales
by about nine percentage points. At POS, sales in North American
department stores declined mid-20s versus prior year, as expected,
reflecting the elimination of Coach-specific promotional events from
the prior year, while shipments into department stores declined
somewhat less.
For the full year, total North American sales
decreased 20% to $2.47 billion from $3.10 billion last year on both a
dollar and constant currency basis. North American direct sales also
declined 20% for the year on both a dollar and constant currency basis
with comparable store sales down 22% including the impact of reduced
eOutlet events, which pressured total comp by seven percentage points.
At POS, sales in North American department stores declined about
low-20s from prior year while shipments into this channel also
declined similarly as planned.
-
International sales decreased 5% for the quarter to $392 million from
$414 million last year. On a constant currency basis, sales rose 3%
for the quarter. Sales in China rose 5% in dollars and 4% in constant
currency on slower distribution growth and a slight decline in
comparable store sales. As expected sales on the Mainland were strong,
growing at a double digit pace driven in part by positive comps, while
results in Hong Kong and Macau were quite weak given significantly
lower tourist trends from the Mainland. In Japan, sales rose 2% versus
prior year on a constant-currency basis, while dollar sales declined
15%, reflecting the weaker yen. Constant currency sales for the
remaining directly operated businesses in Asia were even with prior
year while Europe remained strong, growing at a double-digit pace.
Shipments into international wholesale accounts declined at a
high-teens rate as expected, in large part due to timing shift, while
underlying POS sales decreased slightly.
For the full year,
international sales declined 1% to $1.62 billion from $1.64 billion
generated in fiscal 2014. On a constant currency basis, sales rose 4%
for the year. China reported results were on plan, with total sales
growing 9% in both dollars and in constant currency to about $595
million with positive comparable store sales and slower distribution
growth. In Japan, sales were down mid-single-digits for the year on a
constant currency basis, as expected, due to the overhang of the tax
increase, while dollar sales declined 17%, reflecting the weaker yen.
Sales in constant currency for the other directly operated Asian
businesses were up slightly in local currency. Europe sales were
robust, with sales up nearly 50% for the year, at $90 million, in line
with forecast. Shipments into international wholesale accounts were up
at a high-single-digit rate versus prior year, while underlying POS
sales increased slightly.
Mr. Luis added, “Coach is a strong brand built upon 75 years of
heritage, history and craftsmanship, setting us apart from the
competitive set. With the acquisition of Stuart Weitzman, Coach, Inc. is
now a leading participant in two dynamic and growing global categories –
women’s and men’s bags and accessories and the premium footwear market.
While the competitive landscape has continued to fragment, against an
increasingly volatile and complex macroeconomic environment, we have a
well-articulated roadmap to address these challenges and leverage our
global opportunities.”
“As we look ahead, we will continue to invest in our brands and
businesses to achieve long-term sustainable growth. We’re particularly
excited about all the activities in celebration of Coach’s 75th
anniversary, including our first true runway show at New York Fashion
Week in September, featuring the initial Collection of our anniversary
year, delivering in February 2016. We will also accelerate the rollout
of our modern luxury concept globally and across channels. Our global
brand message will reinforce our distinctive positioning of effortless
New York style through the use of iconic brand elements and the City’s
dynamic landscape as backdrop. Taken together, these initiatives are
expected to drive a return to top line growth in FY16 and positive North
American comps by the end of the year,” Mr. Luis concluded.
Fiscal Year 2016 Outlook:
The Company currently expects Coach stand-alone brand revenues for
Fiscal 2016 to increase by low-single digits in constant currency on a
52-week basis consistent with prior guidance. Based on current exchange
rates, foreign currency will have an approximate 200 basis point
negative impact on Fiscal 2016 revenue growth. Gross margin for the
Coach brand is projected to be in the area of 70% on a constant currency
basis, while negative foreign currency effects may impact gross margin
by 80-100 basis points. SG&A expenses for the brand are anticipated to
rise at a mid-single-digit rate in constant currency, driven primarily
by a shift in project timing from FY15, while dollar growth is expected
to be somewhat lower. Therefore, taken together Coach brand operating
margin for Fiscal 2016 is currently estimated to be in the mid-to-high
teens. Interest expense is expected to be in the area of $30-$35 million
for the year while the full year Fiscal 2016 tax rate is projected at
about 28%.
This guidance excludes expected transformation-related charges of around
$50 million, as well as Stuart Weitzman acquisition charges of around
$30 million (which primarily includes the impact of limited life
purchase accounting and contingent payments) over the course of 2016. In
addition, the company is forecasting Stuart Weitzman brand sales in the
area of $335 million on a dollar basis for fiscal 2016, driving Coach,
Inc. total revenue growth to high-single digits and adding about $0.09
to earnings per diluted share, excluding charges associated with
financing, short-term purchase accounting adjustments and contingent
payments, and integration costs. The company also notes that fiscal 2016
will include a 53rd week, which is expected to contribute
approximately $75-$80 million in incremental revenue and $0.06 in
earnings per diluted share to Coach, Inc.
Conference Call details:
Coach will host a conference call to review these results at 8:30 a.m.
(EDT) today, August 4, 2015. Interested parties may listen to the
webcast by accessing www.coach.com/investors on the Internet or
dialing into 1-888-405-2080 or 1-210-795-9977 and asking for the Coach
earnings call led by Andrea Shaw Resnick, Global Head of Investor
Relations and Corporate Communications. A telephone replay will be
available starting at 12:00 p.m. (EDT) today, for a period of five
business days. The number to call is 1-866-352-7723 or 1-203-369-0080. A
webcast replay of the earnings conference call will also be available
for five business days on the Coach website.
The Company expects to report first quarter financial results on
Tuesday, October 27, 2015. To receive notification of future
announcements, please register at www.coach.com/investors
("Subscribe to E-Mail Alerts").
Coach, Inc. is a leading New York design house of modern luxury
accessories and lifestyle brands. The Coach brand was established in New
York City in 1941, and has a rich heritage of pairing exceptional
leathers and materials with innovative design. Coach is sold worldwide
through Coach stores, select department stores and specialty stores, and
through Coach’s website at www.coach.com. In 2015, Coach
acquired Stuart Weitzman, a global leader in designer footwear, sold in
more than 70 countries and through its website at www.stuartweitzman.com.
Coach, Inc.’s common stock is traded on the New York Stock Exchange
under the symbol COH and Coach’s Hong Kong Depositary Receipts are
traded on The Stock Exchange of Hong Kong Limited under the symbol 6388.
Neither the Hong Kong Depositary Receipts nor the Hong Kong
Depositary Shares evidenced thereby have been or will be registered
under the U.S. Securities Act of 1933, as amended (the "Securities
Act"), and may not be offered or sold in the United States or to, or for
the account of, a U.S. Person (within the meaning of Regulation S under
the Securities Act), absent registration or an applicable exemption from
the registration requirements. Hedging transactions involving these
securities may not be conducted unless in compliance with the Securities
Act.
This information to be made available in this presentation may
contain forward-looking statements based on management's current
expectations. Forward-looking statements include, but are not limited
to, the statements under “Fiscal Year 2016 Outlook,” as well as
statements that can be identified by the use of forward-looking
terminology such as "may," "will," "should," "expect," "intend,"
"estimate," "to address," "continue," "project," "guidance," "forecast,"
"anticipated," or comparable terms. Future results may differ materially
from management's current expectations, based upon a number of important
factors, including risks and uncertainties such as expected economic
trends, the ability to anticipate consumer preferences, the ability to
control costs and successfully execute our transformation initiatives
and growth strategies and our ability to achieve intended benefits, cost
savings and synergies from acquisition, etc. Please refer to Coach
Inc.’s latest Annual Report on Form 10-K, its Quarterly Reports on Form
10-Q for the quarterly periods ended December 27, 2014 and March 28,
2015, and its other filings with the Securities and Exchange Commission
for a complete list of risks and important factors.
|
|
|
|
|
|
|
|
|
|
|
COACH, INC.
|
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
|
For the Quarters and Years Ended June 27, 2015 and June 28,
2014
|
(in millions, except per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(unaudited)
|
|
(audited)
|
|
|
|
|
QUARTER ENDED
|
|
YEAR ENDED
|
|
|
|
|
June 27,
|
|
June 28,
|
|
June 27,
|
|
June 28,
|
|
|
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
|
|
$
|
1,004.1
|
|
|
$
|
1,136.2
|
|
$
|
4,191.6
|
|
|
$
|
4,806.2
|
|
|
|
|
|
|
|
|
|
|
|
Cost of sales
|
|
|
|
|
316.4
|
|
|
|
429.8
|
|
|
1,283.0
|
|
|
|
1,509.2
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
|
|
|
|
|
687.7
|
|
|
|
706.4
|
|
|
2,908.6
|
|
|
|
3,297.0
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and administrative expenses
|
|
|
|
|
648.9
|
|
|
|
606.6
|
|
|
2,290.6
|
|
|
|
2,176.9
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
|
|
|
38.8
|
|
|
|
99.8
|
|
|
618.0
|
|
|
|
1,120.1
|
|
|
|
|
|
|
|
|
|
|
|
Interest (expense) income, net
|
|
|
|
|
(6.3
|
)
|
|
|
0.6
|
|
|
(6.4
|
)
|
|
|
2.2
|
|
|
|
|
|
|
|
|
|
|
|
Income before provision for income taxes
|
|
|
|
|
32.5
|
|
|
|
100.4
|
|
|
611.6
|
|
|
|
1,122.3
|
|
|
|
|
|
|
|
|
|
|
|
Provision for income taxes
|
|
|
|
|
20.8
|
|
|
|
25.2
|
|
|
209.2
|
|
|
|
341.0
|
|
|
|
|
|
|
|
|
|
|
|
Net Income
|
|
|
|
$
|
11.7
|
|
|
$
|
75.2
|
|
$
|
402.4
|
|
|
$
|
781.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
|
$
|
0.04
|
|
|
$
|
0.27
|
|
$
|
1.46
|
|
|
$
|
2.81
|
|
|
|
|
|
|
|
|
|
|
|
Diluted
|
|
|
|
$
|
0.04
|
|
|
$
|
0.27
|
|
$
|
1.45
|
|
|
$
|
2.79
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares used in computing
|
|
|
|
|
|
|
|
|
|
|
net income per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
|
|
276.4
|
|
|
|
274.2
|
|
|
275.7
|
|
|
|
277.8
|
|
|
|
|
|
|
|
|
|
|
|
Diluted
|
|
|
|
|
278.5
|
|
|
|
276.4
|
|
|
277.2
|
|
|
|
280.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
COACH, INC.
|
GAAP TO NON-GAAP RECONCILIATION
|
For the Quarters Ended June 27, 2015 and June 28, 2014
|
(in millions, except per share data)
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 27, 2015
|
|
|
|
|
GAAP Basis
|
|
Transformation and
|
|
Acquisition-Related
|
|
Acquisition-Related
|
|
Non-GAAP Basis
|
|
|
|
|
(As Reported)
|
|
Other Actions (1)
|
|
Costs (2)
|
|
Purchase Accounting (3)
|
|
(Excluding Items)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
|
|
|
|
$
|
687.7
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
(4.7
|
)
|
|
$
|
692.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and administrative expenses
|
|
|
|
$
|
648.9
|
|
$
|
66.2
|
|
|
$
|
13.6
|
|
|
$
|
2.8
|
|
|
$
|
566.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
|
|
$
|
38.8
|
|
$
|
(66.2
|
)
|
|
$
|
(13.6
|
)
|
|
$
|
(7.5
|
)
|
|
$
|
126.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before provision for income taxes
|
|
|
|
$
|
32.5
|
|
$
|
(66.2
|
)
|
|
$
|
(13.6
|
)
|
|
$
|
(7.5
|
)
|
|
$
|
119.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision for income taxes
|
|
|
|
$
|
20.8
|
|
$
|
(11.6
|
)
|
|
$
|
(2.4
|
)
|
|
$
|
-
|
|
|
$
|
34.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
|
|
$
|
11.7
|
|
$
|
(54.6
|
)
|
|
$
|
(11.2
|
)
|
|
$
|
(7.5
|
)
|
|
$
|
85.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted net income per share
|
|
|
|
$
|
0.04
|
|
$
|
(0.20
|
)
|
|
$
|
(0.04
|
)
|
|
$
|
(0.03
|
)
|
|
$
|
0.31
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 28, 2014
|
|
|
|
|
GAAP Basis
|
|
Transformation and
|
|
Acquisition-Related
|
|
Acquisition-Related
|
|
Non-GAAP Basis
|
|
|
|
|
(As Reported)
|
|
Other Actions (1)
|
|
Costs (2)
|
|
Purchase Accounting (3)
|
|
(Excluding Items)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
|
|
|
|
$
|
706.4
|
|
$
|
(82.2
|
)
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
788.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and administrative expenses
|
|
|
|
$
|
606.6
|
|
$
|
49.3
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
557.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
|
|
$
|
99.8
|
|
$
|
(131.5
|
)
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
231.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before provision for income taxes
|
|
|
|
$
|
100.4
|
|
$
|
(131.5
|
)
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
231.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision for income taxes
|
|
|
|
$
|
25.2
|
|
$
|
(43.2
|
)
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
68.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
|
|
$
|
75.2
|
|
$
|
(88.3
|
)
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
163.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted net income per share
|
|
|
|
$
|
0.27
|
|
$
|
(0.32
|
)
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
0.59
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Amounts as of June 27, 2015 reflect Coach, Inc.
charges related to accelerated depreciation and lease termination
charges as a result of store updates and closures as well as
organizational efficiency charges. Amounts as of June 28, 2014
reflect Coach, Inc. charges related to the donation/destruction of
inventory, impairment charges related to retail stores, store
closure costs (including severance and accelerated depreciation)
and accelerated depreciation of existing store assets in
connection with the updating of such stores.
|
(2) Primarily represents consulting and legal costs
related to the acquisition of Stuart Weitzman Holdings LLC, as well
as costs attributable to contingent payments related to the
acquisition.
|
(3) Represents limited life purchase accounting impacts
associated with Stuart Weitzman Holdings LLC, primarily due to the
amortization of the fair value of the inventory step-up and order
backlog asset.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
COACH, INC.
|
GAAP TO NON-GAAP RECONCILIATION
|
For the Years Ended June 27, 2015 and June 28, 2014
|
(in millions, except per share data)
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 27, 2015
|
|
|
|
|
GAAP Basis
|
|
Transformation and
|
|
Acquisition-Related
|
|
Acquisition-Related
|
|
Non-GAAP Basis
|
|
|
|
|
(As Reported)
|
|
Other Actions (1)
|
|
Costs (2)
|
|
Purchase Accounting (3)
|
|
(Excluding Items)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
|
|
|
|
$
|
2,908.6
|
|
$
|
(5.0
|
)
|
|
$
|
-
|
|
|
$
|
(4.7
|
)
|
|
$
|
2,918.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and administrative expenses
|
|
|
|
$
|
2,290.6
|
|
$
|
140.9
|
|
|
$
|
17.1
|
|
|
$
|
2.8
|
|
|
$
|
2,129.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
|
|
$
|
618.0
|
|
$
|
(145.9
|
)
|
|
$
|
(17.1
|
)
|
|
$
|
(7.5
|
)
|
|
$
|
788.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before provision for income taxes
|
|
|
|
$
|
611.6
|
|
$
|
(145.9
|
)
|
|
$
|
(17.1
|
)
|
|
$
|
(7.5
|
)
|
|
$
|
782.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision for income taxes
|
|
|
|
$
|
209.2
|
|
$
|
(38.1
|
)
|
|
$
|
(3.6
|
)
|
|
$
|
-
|
|
|
$
|
250.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
|
|
$
|
402.4
|
|
$
|
(107.8
|
)
|
|
$
|
(13.5
|
)
|
|
$
|
(7.5
|
)
|
|
$
|
531.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted net income per share
|
|
|
|
$
|
1.45
|
|
$
|
(0.39
|
)
|
|
$
|
(0.05
|
)
|
|
$
|
(0.03
|
)
|
|
$
|
1.92
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 28, 2014
|
|
|
|
|
GAAP Basis
|
|
Transformation and
|
|
Acquisition-Related
|
|
Acquisition-Related
|
|
Non-GAAP Basis
|
|
|
|
|
(As Reported)
|
|
Other Actions (1)
|
|
Costs (2)
|
|
Purchase Accounting (3)
|
|
(Excluding Items)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
|
|
|
|
$
|
3,297.0
|
|
$
|
(82.2
|
)
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
3,379.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and administrative expenses
|
|
|
|
$
|
2,176.9
|
|
$
|
49.3
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
2,127.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
|
|
$
|
1,120.1
|
|
$
|
(131.5
|
)
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
1,251.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before provision for income taxes
|
|
|
|
$
|
1,122.3
|
|
$
|
(131.5
|
)
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
1,253.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision for income taxes
|
|
|
|
$
|
341.0
|
|
$
|
(43.2
|
)
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
384.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
|
|
$
|
781.3
|
|
$
|
(88.3
|
)
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
869.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted net income per share
|
|
|
|
$
|
2.79
|
|
$
|
(0.31
|
)
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
3.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Amounts as of June 27, 2015 reflect Coach, Inc.
charges related to accelerated depreciation and lease termination
charges as a result of store updates and closures, organizational
efficiency charges, and charges related to the destruction of
inventory. Amounts as of June 28, 2014 reflect Coach, Inc. charges
related to the donation/destruction of inventory, impairment charges
related to retail stores, store closure costs (including severance
and accelerated depreciation) and accelerated depreciation of
existing store assets in connection with the updating of such stores.
|
(2) Primarily represents consulting and legal costs
related to the acquisition of Stuart Weitzman Holdings LLC, as well
as costs attributable to contingent payments related to the
acquisition.
|
(3) Represents limited life purchase accounting impacts
associated with Stuart Weitzman Holdings LLC, primarily due to the
amortization of the fair value of the inventory step-up and order
backlog asset.
|
|
The Company reports information in accordance with U.S. Generally
Accepted Accounting Principles ("GAAP"). The Company's management does
not, nor does it suggest that investors should, consider non-GAAP
financial measures in isolation from, or as a substitute for, financial
information prepared in accordance with GAAP. The financial information
presented above, as well as gross margin, SG&A expense ratio, and
operating margin, have been presented both including and excluding the
effect of certain items which affect the comparability of our results.
Non-GAAP operating income and gross profit have also been presented
both including and excluding the impact of the acquisition of Stuart
Weitzman in May 2015. Presenting the above financial information and
certain metrics both including and excluding the impact of certain items
which affect the comparability of our results will help investors and
analysts to understand the year-over-year impact of these items on
ongoing operations.
Percentage increases/decreases in net sales and direct sales for the
Company’s North America segment and net sales for the Company, its
International segments, Coach China and Coach Japan have been presented
both including and excluding currency fluctuation effects from
translating foreign-denominated sales into U.S. dollars and compared to
the same periods in the prior quarter and fiscal year. Guidance for
certain financial information for the fiscal year ending July 2, 2016
has also been presented on a constant currency basis. Presenting these
metrics on a constant currency basis will help investors and analysts to
understand the effect of significant year-over-year foreign currency
exchange rate fluctuations on these performance measures and provide a
framework to assess how business is performing and expected to perform
excluding these effects.
|
|
|
|
|
|
|
COACH, INC.
|
CONDENSED CONSOLIDATED BALANCE SHEETS
|
At June 27, 2015 and June 28, 2014
|
(in millions)
|
(audited)
|
|
|
|
|
|
|
|
|
|
|
|
June 27,
|
|
June 28,
|
|
|
|
|
2015(1)
|
|
2014
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash, cash equivalents and short-term investments
|
|
|
|
$
|
1,525.8
|
|
|
$
|
868.6
|
Receivables
|
|
|
|
|
219.5
|
|
|
|
198.6
|
Inventories
|
|
|
|
|
485.1
|
|
|
|
526.2
|
Other current assets
|
|
|
|
|
276.1
|
|
|
|
261.8
|
|
|
|
|
|
|
|
Total current assets
|
|
|
|
|
2,506.5
|
|
|
|
1,855.2
|
|
|
|
|
|
|
|
Property and equipment, net
|
|
|
|
|
732.6
|
|
|
|
713.9
|
Other noncurrent assets
|
|
|
|
|
1,427.8
|
|
|
|
1,094.0
|
|
|
|
|
|
|
|
Total assets
|
|
|
|
$
|
4,666.9
|
|
|
$
|
3,663.1
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts payable
|
|
|
|
$
|
222.8
|
|
|
$
|
153.9
|
Accrued liabilities
|
|
|
|
|
600.6
|
|
|
|
518.7
|
Current debt
|
|
|
|
|
11.3
|
|
|
|
140.5
|
|
|
|
|
|
|
|
Total current liabilities
|
|
|
|
|
834.7
|
|
|
|
813.1
|
|
|
|
|
|
|
|
Long-term debt
|
|
|
|
|
879.1
|
|
|
|
-
|
Other liabilities
|
|
|
|
|
463.2
|
|
|
|
429.4
|
|
|
|
|
|
|
|
Stockholders' equity
|
|
|
|
|
2,489.9
|
|
|
|
2,420.6
|
|
|
|
|
|
|
|
Total liabilities and stockholders' equity
|
|
|
|
$
|
4,666.9
|
|
|
$
|
3,663.1
|
|
|
|
|
|
(1) Includes the purchase price allocation for Stuart
Weitzman, including goodwill of $125.8 million, trademarks and trade
names of $267 million and other intangible assets, net of
amortization, of $83.1 million, included within Other noncurrent
assets.
|
|
|
|
|
|
|
|
|
|
|
COACH, INC.
|
|
|
|
|
|
|
|
|
|
Store Count
|
|
|
|
|
|
|
|
|
|
At March 28, 2015 and June 27, 2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of
|
|
Net Openings/
|
|
As of
|
Directly-Operated Store Count
|
|
|
|
March 28, 2015
|
|
(Closures)
|
|
June 27, 2015
|
|
|
|
|
|
|
|
|
|
Coach
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
North America
|
|
|
|
478
|
|
(16)
|
|
462
|
|
|
|
|
|
|
|
|
|
Japan
|
|
|
|
198
|
|
(2)
|
|
196
|
|
|
|
|
|
|
|
|
|
China (PRC, Hong Kong & Macau)
|
|
|
|
165
|
|
6
|
|
171
|
|
|
|
|
|
|
|
|
|
Asia - Other
|
|
|
|
101
|
|
1
|
|
102
|
|
|
|
|
|
|
|
|
|
Europe
|
|
|
|
31
|
|
3
|
|
34
|
|
|
|
|
|
|
|
|
|
Stuart Weitzman*
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Global
|
|
|
|
0
|
|
54
|
|
54
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* Coach acquired Stuart Weitzman in May 2015
|
|
|
|
|
|
|
|
|
|
|
COACH, INC.
|
|
|
|
|
|
|
|
|
|
Store Count
|
|
|
|
|
|
|
|
|
|
At June 28, 2014 and June 27, 2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of
|
|
Net Openings/
|
|
As of
|
Directly-Operated Store Count
|
|
|
|
June 28, 2014
|
|
(Closures)
|
|
June 27, 2015
|
|
|
|
|
|
|
|
|
|
Coach
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
North America
|
|
|
|
539
|
|
(77)
|
|
462
|
|
|
|
|
|
|
|
|
|
Japan
|
|
|
|
198
|
|
(2)
|
|
196
|
|
|
|
|
|
|
|
|
|
China (PRC, Hong Kong & Macau)
|
|
|
|
153
|
|
18
|
|
171
|
|
|
|
|
|
|
|
|
|
Asia - Other
|
|
|
|
97
|
|
5
|
|
102
|
|
|
|
|
|
|
|
|
|
Europe
|
|
|
|
27
|
|
7
|
|
34
|
|
|
|
|
|
|
|
|
|
Stuart Weitzman*
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Global
|
|
|
|
0
|
|
54
|
|
54
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* Coach acquired Stuart Weitzman in May 2015
|
CONTACT:
Coach
Analysts & Media:
Andrea Shaw Resnick,
212-629-2618
Global Head of Investor Relations and Corporate
Communications
or
Christina Colone, 212-946-7252
Director,
Investor Relations
Tapestry (NYSE:TPR)
Historical Stock Chart
From Feb 2024 to Mar 2024
Tapestry (NYSE:TPR)
Historical Stock Chart
From Mar 2023 to Mar 2024