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): January 26, 2016
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Coach, Inc.
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(Exact name of registrant as specified in its charter)
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Maryland
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1-16153
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52-2242751
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(State of Incorporation)
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(Commission File Number)
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(IRS Employer Identification No.)
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516 West 34th Street, New York, NY 10001
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(Address of principal executive offices) (Zip Code)
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(212) 594-1850
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(Registrant’s telephone number, including area code)
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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 January 26, 2016, Coach, Inc. (the
“Company”) issued a press release (the “Press Release”) in which the
Company announced its financial results for its fiscal quarter ended
December 26, 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 January 26, 2016
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: January 26, 2016
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COACH, INC.
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By:
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/s/ Todd Kahn
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Todd Kahn
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Chief Administrative Officer,
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General Counsel & Secretary
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EXHIBIT INDEX
99.1 Text of Press
Release, dated January 26, 2016
Exhibit 99.1
Coach,
Inc. Reports Fiscal 2016 Second Quarter Results
-
Second
Quarter Net Sales Increased 7% Over Prior Year In Constant Currency;
Up 4% On A Reported Basis
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Second
Quarter Non-GAAP Earnings Per Share was $0.68; Second Quarter GAAP
Earnings Per Share was $0.61
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Maintains
Consolidated Full Year 2016 Sales Guidance; Raises Operating Income
Outlook
NEW YORK--(BUSINESS WIRE)--January 26, 2016--Coach, Inc. (NYSE:COH)
(SEHK:6388), a leading New York design house of modern luxury
accessories and lifestyle brands, today reported second quarter results
for the period ended December 26, 2015.
Victor Luis, Chief Executive Officer of Coach, Inc., said, “We are very
pleased with our second quarter performance, which was consistent with
our expectations and reflected the most significant progress to date on
our transformation plan despite the difficult retail environment
globally. We drove further sequential improvement in our North America
bricks and mortar business - led, as expected, by our retail stores,
while our outlet store channel also strengthened against a backdrop of
lower tourist traffic and a highly promotional environment. Our
international businesses posted strong growth on a constant currency
basis, highlighted by double-digit increases in Europe, and Mainland
China, as well as sales gains in Japan. Overall, our results continue to
give us confidence that the cumulative impact of our actions will result
in a return to top line growth this fiscal year and positive North
American comps by our fourth quarter.”
“We were also excited about Stuart Weitzman’s results during the
quarter, which exceeded expectations. Boots in particular sold well,
notably in domestic retail stores, and in spite of the unseasonably warm
weather. This performance clearly reflected the brand’s strong
development of fashionable, trend-right product and its growing
relevance with an increasing number of consumers globally. Importantly,
we are effectively integrating Stuart Weitzman to Coach, Inc. while
continuing to successfully execute the Coach brand transformation.”
Overview of Second Quarter 2016 Consolidated, Coach, Inc. Results:
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Net sales totaled $1.27 billion for the second fiscal quarter,
compared with $1.22 billion reported in the same period of the prior
year, an increase of 4%. On a constant currency basis, total sales
increased 7% for the period.
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Gross profit totaled $859 million versus $841 million a year
ago on a Non-GAAP basis, while gross margin was 67.4% versus 69.0%. On
a reported basis, Coach, Inc. gross profit was also $859 million
versus $840 million a year ago, with a gross margin of 67.4% versus
68.9%.
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SG&A expenses of $574 million compared to $542 million in
the prior year on a non-GAAP basis, an increase of 6%. As a percentage
of net sales, SG&A totaled 45.1% on a non-GAAP basis, compared to
44.4% in the year-ago quarter. On a reported basis, SG&A expenses were
$598 million or 47.0% of sales as compared to $565 million or 46.3% on
a reported basis in the year ago period.
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Operating income for the quarter on a non-GAAP basis totaled
$285 million compared to $299 million in the prior year, while
operating margin was 22.4% versus 24.5%. On a reported basis,
operating income was $261 million compared to $275 million in the
prior year, while operating margin was 20.5% versus 22.6%.
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Net interest expense was $6 million in the quarter as compared
to net interest income of $0.4 million in the year ago period.
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Net income for the quarter on a Non-GAAP basis totaled $188
million, with earnings per diluted share of $0.68. This included a
contribution of $13 million or $0.05 per share from Stuart
Weitzman. This compared to non-GAAP net income in the second quarter
of FY15 of $200 million with earnings per diluted share of $0.72. On a
GAAP basis, net income for the quarter was $170 million with earnings
per diluted share of $0.61 including a contribution of $12 million or
$0.04 per share from Stuart Weitzman. This compared to prior year GAAP
net income of $183 million or $0.66 earnings per diluted share.
Coach Brand Second Quarter of 2016 Results:
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Net sales for the Coach brand totaled $1.18 billion for
the second fiscal quarter, compared with $1.22 billion reported in the
same period of the prior year, a decrease of 3%. On a constant
currency basis, total sales decreased 1% for the period.
Second fiscal quarter sales results in each of Coach’s primary segments
were as follows:
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Total North American Coach brand sales decreased 7% on a
reported basis for the quarter to $731 million from $785 million last
year, and decreased 6% on a constant currency basis, reflecting
continued sequential improvement. North American direct sales declined
7% on a dollar basis and 6% on a constant currency basis for the
quarter, with comparable store sales down 4% including the impact of
the Internet, which pressured total comparable stores sales by about 1
percentage point due to the reduction in eOutlet events. As expected,
at POS, sales in North American department stores declined at a
mid-single-digit rate versus prior year, while net sales into
department stores declined to a similar degree.
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International Coach brand sales rose 4% to $437 million from
$421 million last year. On a constant currency basis, International
sales rose 9%. Total China sales rose 2% in dollars and
5% in constant currency with double-digit growth and positive
comparable store sales on the Mainland offset in part by continued
weakness in Hong Kong and Macau. In Japan, sales rose 2% on a constant
currency basis, despite a decrease in square footage and consistent
with expectations, while dollar sales declined 3%, reflecting the
weaker yen. Sales for the remaining directly operated businesses in
Asia grew modestly in constant currency but declined in dollars, while
Europe remained very strong, growing at a double digit pace in both
total and comparable store sales. At POS, sales in international
wholesale locations increased slightly, driven by strong domestic
performance offset in large part by relatively weak tourist location
results. Net sales into the channel grew significantly from prior year
positively impacted by shipment timing to ensure appropriate inventory
positions for Chinese New Year.
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Gross profit for the Coach brand totaled $799 million on both a
non-GAAP and reported basis, while gross margin was 67.7%, pressured
by about 110 basis points from currency.
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SG&A expenses totaled $536 million for the Coach brand on a
non-GAAP basis, a decrease of 1%. As a percentage of net
sales, SG&A expenses totaled 45.4% on a non-GAAP basis. On a reported
basis, SG&A expenses were $556 million and represented 47.1% of sales.
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Operating income for the Coach brand on a non-GAAP basis was
$263 million, while operating margin was 22.3%. On a reported
basis, operating income was $243 million for Coach, while
operating margin was 20.6%.
Stuart Weitzman Second Quarter of 2016 Results:
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Net sales for the Stuart Weitzman brand totaled $94 million for
the second fiscal quarter.
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Gross profit for the Stuart Weitzman brand totaled $61 million
on both a non-GAAP and reported basis, resulting in a gross margin of
64.3%.
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SG&A expenses were $38 million for the Stuart Weitzman
brand or 40.8% of sales on a non-GAAP basis and $42 million
representing 44.9% of sales as reported.
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Operating income for the Stuart Weitzman brand was $22
million representing an operating margin of 23.6% on a non-GAAP basis,
and $18 million or 19.4% as reported.
During the second quarter of FY16, the company recorded charges of $14
million under its multi-year transformation plan. These charges
consisted primarily of organizational efficiency costs and accelerated
depreciation for stores renovations. In addition, the company recorded
costs of approximately $10 million associated with the acquisition of
Stuart Weitzman (which primarily includes charges attributable to
integration-related activities, contingent payments, and the impact of
limited life purchase accounting). These actions taken together
increased the company’s SG&A expenses by about $24 million, negatively
impacting net income by $18 million after tax or about $0.07 per diluted
share in the second quarter.
The Company ended the second quarter of FY16 with inventory of $438
million including $29 million associated with Stuart Weitzman. This
compared to ending inventory for the Coach brand of $447 million for the
second quarter of FY15. Therefore, inventory declined 2% on a
consolidated basis and 9% for the Coach brand.
Mr. Luis added, “We remain focused on creating desire for our brands and
building emotional connections with our customers globally, at every
touch point. This will be demonstrated through our innovative product
offering and runway shows, our bold marketing campaigns and our elevated
in-store experience. As we move into the Coach brand’s 75th
anniversary year in 2016, our initiatives will celebrate our authentic
heritage of craftsmanship, amplifying our unique brand proposition.”
“And, as our momentum builds, we are targeting a return to growth for
the Coach brand with continued improvement in comparable store sales,
while Stuart Weitzman also drives top and bottom line results. We have a
clear vision, a well-articulated strategy and a proven track record of
execution. We remain confident that we can drive sustainable growth and
best-in-class profitability for Coach, Inc., over the long term,” Mr.
Luis concluded.
Fiscal Year 2016 Outlook:
The Company is maintaining its Fiscal 2016 constant currency revenue
growth and operating margin guidance for the Coach brand, while raising
its consolidated operating income outlook based on second quarter
results.
Coach brand revenues for Fiscal 2016 are still expected to increase by
low-single digits in constant currency on a 52-week basis. However,
based on current exchange rates, foreign currency is now expected to
negatively impact overall Fiscal 2016 revenue growth by 225-250 basis
points. Coach brand operating margin for Fiscal 2016 is still estimated
to be in the mid-to-high teens with some shift between the gross margin
and expense ratio from previous annual guidance. To this end, gross
margin for the Coach brand is projected to be in the range of last
year’s margin of about 69½% on a constant currency basis, while negative
foreign currency effects are now projected to impact gross margin by
90-100 basis points. SG&A expenses for the brand are now anticipated to
rise at a low-single-digit rate in constant currency, while growth is
expected to be roughly flat in dollars. 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 contingent payments,
integration-related activities and limited life purchase accounting)
over the course of 2016.
In addition, based on Stuart Weitzman’s sales and margin outperformance
during the holiday quarter, the company is now forecasting revenue for
the brand to be in the area of $340 million on a reported dollar basis
for fiscal 2016, driving Coach, Inc. total revenue growth to high-single
digits on a constant currency basis and adding about $0.12 to earnings
per diluted share, excluding charges associated with financing,
short-term purchase accounting adjustments and contingent payments, and
integration costs. Overall, the Stuart Weitzman business is now
projected to negatively impact consolidated gross margin and operating
margin by about 70 basis points and approximately 20 basis points,
respectively – an improvement from previous guidance. Therefore, taken
together with its projection for the Coach brand, the Company is raising
its operating income outlook for Coach, Inc. for Fiscal 2016.
The company also notes that fiscal 2016 will include a 53rd
week in its fourth quarter, 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.
(ET) today, January 26, 2016. 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. (ET) 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 third quarter financial results on
Tuesday, April 26, 2016. 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," “can,” "should," "expect," "intend,"
"estimate," "continue," "project," "guidance," "forecast,"
"anticipated," “moving,” “leveraging,” “targeting,” 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 acquisitions, etc. Please refer to Coach Inc.’s
latest Annual Report on Form 10-K and its other filings with the
Securities and Exchange Commission for a complete list of risks and
important factors.
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COACH, INC. CONDENSED CONSOLIDATED
STATEMENTS OF INCOME For the Quarters and
Six Months Ended December 26, 2015 and December 27, 2014 (in
millions, except per share data)
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(unaudited)
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QUARTER ENDED
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SIX MONTHS ENDED
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December 26,
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December 27,
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December 26,
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December 27,
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2015
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2014
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2015
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2014
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Net sales
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$
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1,273.8
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$
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1,219.4
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$
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2,304.1
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$
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2,258.2
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Cost of sales
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414.7
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379.4
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748.5
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702.8
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Gross profit
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859.1
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840.0
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1,555.6
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1,555.4
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Selling, general and administrative expenses
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598.1
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564.6
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1,153.2
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1,100.2
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Operating income
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261.0
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275.4
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402.4
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455.2
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Interest (expense) income, net
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(6.3)
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0.4
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(13.0)
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1.1
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Income before provision for income taxes
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254.7
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275.8
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389.4
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456.3
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Provision for income taxes
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84.6
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92.3
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122.9
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153.7
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Net Income
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$
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170.1
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$
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183.5
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$
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266.5
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$
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302.6
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Net income per share:
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Basic
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$
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0.61
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$
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0.67
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$
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0.96
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$
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1.10
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Diluted
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$
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0.61
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$
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0.66
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$
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0.96
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$
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1.09
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Shares used in computing
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net income per share:
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Basic
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277.6
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275.6
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277.3
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275.3
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Diluted
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278.4
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276.5
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278.3
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276.4
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COACH, INC. GAAP TO NON-GAAP
RECONCILIATION For the Quarters Ended
December 26, 2015 and December 27, 2014 (in
millions, except per share data) (unaudited)
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December 26, 2015
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GAAP Basis
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Transformation and
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Acquisition-Related
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Acquisition-Related
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Non-GAAP Basis
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(As Reported)
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Other Actions (1)
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Costs (2)
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Purchase Accounting (3)
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(Excluding Items)
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Gross profit
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$
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859.1
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$
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-
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$
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-
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$
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-
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$
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859.1
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Selling, general and administrative expenses
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$
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598.1
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$
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13.9
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$
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8.5
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$
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1.6
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$
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574.1
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Operating income
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$
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261.0
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$
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(13.9)
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$
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(8.5)
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$
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(1.6)
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$
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285.0
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Income before provision for income taxes
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$
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254.7
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$
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(13.9)
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$
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(8.5)
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$
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(1.6)
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$
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278.7
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Provision for income taxes
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$
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84.6
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$
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(1.9)
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$
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(2.6)
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$
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(1.2)
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$
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90.3
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|
|
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|
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|
|
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Net income
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$
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170.1
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$
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(12.0)
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$
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(5.9)
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$
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(0.4)
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$
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188.4
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|
|
|
|
|
|
|
|
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Diluted net income per share
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$
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0.61
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$
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(0.04)
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$
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(0.02)
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$
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(0.01)
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$
|
0.68
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|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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December 27, 2014
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|
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GAAP Basis
|
|
Transformation and
|
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Acquisition-Related
|
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Acquisition-Related
|
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Non-GAAP Basis
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(As Reported)
|
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Other Actions (1)
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Costs (2)
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Purchase Accounting (3)
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(Excluding Items)
|
|
|
|
|
|
|
|
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Gross profit
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$
|
840.0
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$
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(1.0)
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$
|
-
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$
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-
|
|
$
|
841.0
|
|
|
|
|
|
|
|
|
|
|
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Selling, general and administrative expenses
|
|
$
|
564.6
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|
$
|
19.1
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|
$
|
3.5
|
|
$
|
-
|
|
$
|
542.0
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|
|
|
|
|
|
|
Operating income
|
|
$
|
275.4
|
|
$
|
(20.1)
|
|
$
|
(3.5)
|
|
$
|
-
|
|
$
|
299.0
|
|
|
|
|
|
|
|
|
|
|
|
Income before provision for income taxes
|
|
$
|
275.8
|
|
$
|
(20.1)
|
|
$
|
(3.5)
|
|
$
|
-
|
|
$
|
299.4
|
|
|
|
|
|
|
|
|
|
|
|
Provision for income taxes
|
|
$
|
92.3
|
|
$
|
(5.7)
|
|
$
|
(1.2)
|
|
$
|
-
|
|
$
|
99.2
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
183.5
|
|
$
|
(14.4)
|
|
$
|
(2.3)
|
|
$
|
-
|
|
$
|
200.2
|
|
|
|
|
|
|
|
|
|
|
|
Diluted net income per share
|
|
$
|
0.66
|
|
$
|
(0.05)
|
|
$
|
(0.01)
|
|
$
|
-
|
|
$
|
0.72
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
Amounts as of December 26, 2015 reflect Coach brand charges
primarily related to organizational efficiency costs and accelerated
depreciation as a result of store renovations. Amounts as of
December 27, 2014 related to Coach brand 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.
|
|
|
|
(2)
|
|
Primarily represents costs attributable to integration-related
activities, contingent payments and other consulting and legal costs
related to the acquisition of Stuart Weitzman Holdings LLC. $6.2
million of these SG&A expenses were recorded within the Coach brand,
resulting in a $6.2 million decrease in operating income. $2.3
million of these SG&A expenses were recorded within the Stuart
Weitzman segment, resulting in a $2.3 million decrease in operating
income.
|
|
|
|
(3)
|
|
Represents limited life purchase accounting impacts associated with
Stuart Weitzman Holdings LLC, primarily due to the amortization of
the fair value of the order backlog asset, recorded within the
Stuart Weitzman segment.
|
|
|
|
|
COACH, INC. GAAP TO NON-GAAP
RECONCILIATION For the Six Months Ended
December 26, 2015 and December 27, 2014 (in
millions, except per share data) (unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 26, 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
|
|
$
|
1,555.6
|
|
$
|
-
|
|
$
|
-
|
|
$
|
(0.9)
|
|
$
|
1,556.5
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and administrative expenses
|
|
$
|
1,153.2
|
|
$
|
26.5
|
|
$
|
14.4
|
|
$
|
5.8
|
|
$
|
1,106.5
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
$
|
402.4
|
|
$
|
(26.5)
|
|
$
|
(14.4)
|
|
$
|
(6.7)
|
|
$
|
450.0
|
|
|
|
|
|
|
|
|
|
|
|
Income before provision for income taxes
|
|
$
|
389.4
|
|
$
|
(26.5)
|
|
$
|
(14.4)
|
|
$
|
(6.7)
|
|
$
|
437.0
|
|
|
|
|
|
|
|
|
|
|
|
Provision for income taxes
|
|
$
|
122.9
|
|
$
|
(6.0)
|
|
$
|
(4.5)
|
|
$
|
(2.1)
|
|
$
|
135.5
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
266.5
|
|
$
|
(20.5)
|
|
$
|
(9.9)
|
|
$
|
(4.6)
|
|
$
|
301.5
|
|
|
|
|
|
|
|
|
|
|
|
Diluted net income per share
|
|
$
|
0.96
|
|
$
|
(0.07)
|
|
$
|
(0.03)
|
|
$
|
(0.02)
|
|
$
|
1.08
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 27, 2014
|
|
|
GAAP Basis
|
|
Transformation and
|
|
Acquisition-Related
|
|
Acquisition-Related
|
|
Non-GAAP Basis
|
|
|
(As Reported)
|
|
Other Actions (1)
|
|
Costs
|
|
Purchase Accounting (3)
|
|
(Excluding Items)
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
|
|
$
|
1,555.4
|
|
$
|
(5.0)
|
|
$
|
-
|
|
$
|
-
|
|
$
|
1,560.4
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and administrative expenses
|
|
$
|
1,100.2
|
|
$
|
52.2
|
|
$
|
3.5
|
|
$
|
-
|
|
$
|
1,044.5
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
$
|
455.2
|
|
$
|
(57.2)
|
|
$
|
(3.5)
|
|
$
|
-
|
|
$
|
515.9
|
|
|
|
|
|
|
|
|
|
|
|
Income before provision for income taxes
|
|
$
|
456.3
|
|
$
|
(57.2)
|
|
$
|
(3.5)
|
|
$
|
-
|
|
$
|
517.0
|
|
|
|
|
|
|
|
|
|
|
|
Provision for income taxes
|
|
$
|
153.7
|
|
$
|
(16.1)
|
|
$
|
(1.2)
|
|
$
|
-
|
|
$
|
171.0
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
302.6
|
|
$
|
(41.1)
|
|
$
|
(2.3)
|
|
$
|
-
|
|
$
|
346.0
|
|
|
|
|
|
|
|
|
|
|
|
Diluted net income per share
|
|
$
|
1.09
|
|
$
|
(0.15)
|
|
$
|
(0.01)
|
|
$
|
-
|
|
$
|
1.25
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
Amounts as of December 26, 2015 reflect Coach brand charges
primarily related to organizational efficiency costs and accelerated
depreciation as a result of store renovations. Amounts as of
December 27, 2014 related to Coach brand 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.
|
|
|
|
(2)
|
|
Primarily represents costs attributable to contingent payments,
integration-related activities and other consulting and legal costs
related to the acquisition of Stuart Weitzman Holdings LLC. $9.8
million of these SG&A expenses were recorded within the Coach brand,
resulting in a $9.8 million decrease in operating income. $4.6
million of these SG&A expenses were recorded within the Stuart
Weitzman segment, resulting in a $4.6 million decrease in operating
income.
|
|
|
|
(3)
|
|
Represents limited life purchase accounting impacts associated with
Stuart Weitzman Holdings LLC, primarily due to the amortization of
the fair value of the order backlog asset and inventory step-up, all
recorded within the Stuart Weitzman segment.
|
|
|
|
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 related to our Transformation Plan and
acquisition charges for Coach, Inc., as well as the Coach brand, which
includes the Company’s North America and International segments, as well
as Other and Corporate Unallocated results, and the Stuart Weitzman
brand, which includes the Company’s Stuart Weitzman segment. Presenting
the above financial information and certain metrics both including and
excluding the impact of certain items 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, the Coach
brand, the Company’s International segments, Coach China, Coach Japan
and the Company’s remaining directly operated businesses in Asia 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 December 26, 2015, June
27, 2015 and December 27, 2014 (in
millions) (unaudited)
|
|
|
|
|
|
|
|
|
|
December 26,
|
|
June 27,
|
|
December 27,
|
|
|
2015
|
|
2015
|
|
2014
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash, cash equivalents and short-term investments
|
|
$
|
1,337.1
|
|
$
|
1,525.8
|
|
$
|
1,064.9
|
Receivables
|
|
|
303.6
|
|
|
219.5
|
|
|
228.5
|
Inventories
|
|
|
438.5
|
|
|
485.1
|
|
|
447.2
|
Other current assets
|
|
|
222.4
|
|
|
276.1
|
|
|
206.8
|
|
|
|
|
|
|
|
Total current assets
|
|
|
2,301.6
|
|
|
2,506.5
|
|
|
1,947.4
|
|
|
|
|
|
|
|
Property and equipment, net
|
|
|
784.4
|
|
|
732.6
|
|
|
684.0
|
Other noncurrent assets
|
|
|
1,517.7
|
|
|
1,427.8
|
|
|
985.8
|
|
|
|
|
|
|
|
Total assets
|
|
$
|
4,603.7
|
|
$
|
4,666.9
|
|
$
|
3,617.2
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
Accounts payable
|
|
$
|
147.7
|
|
$
|
222.8
|
|
$
|
160.5
|
Accrued liabilities
|
|
|
541.3
|
|
|
600.6
|
|
|
534.9
|
Current debt
|
|
|
15.0
|
|
|
11.3
|
|
|
20.0
|
|
|
|
|
|
|
|
Total current liabilities
|
|
|
704.0
|
|
|
834.7
|
|
|
715.4
|
|
|
|
|
|
|
|
Long-term debt
|
|
|
872.0
|
|
|
879.1
|
|
|
-
|
Other liabilities
|
|
|
460.4
|
|
|
463.2
|
|
|
383.8
|
|
|
|
|
|
|
|
Stockholders' equity
|
|
|
2,567.3
|
|
|
2,489.9
|
|
|
2,518.0
|
|
|
|
|
|
|
|
Total liabilities and stockholders' equity
|
|
$
|
4,603.7
|
|
$
|
4,666.9
|
|
$
|
3,617.2
|
|
|
|
|
|
|
|
|
|
|
|
COACH, INC. Store Count At
September 26, 2015 and December 26, 2015 (unaudited)
|
|
|
|
As of
|
|
|
|
|
|
As of
|
Directly-Operated Store Count:
|
|
September 26, 2015
|
|
Openings
|
|
(Closures)
|
|
December 26, 2015
|
|
|
|
|
|
|
|
|
|
Coach
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
North America
|
|
462
|
|
1
|
|
(3)
|
|
460
|
|
|
|
|
|
|
|
|
|
Japan
|
|
197
|
|
0
|
|
(2)
|
|
195
|
|
|
|
|
|
|
|
|
|
Greater China (PRC, Hong Kong & Macau)
|
|
176
|
|
6
|
|
(1)
|
|
181
|
|
|
|
|
|
|
|
|
|
Asia - Other
|
|
103
|
|
2
|
|
(2)
|
|
103
|
|
|
|
|
|
|
|
|
|
Europe
|
|
35
|
|
1
|
|
(1)
|
|
35
|
|
|
|
|
|
|
|
|
|
Stuart Weitzman
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Global
|
|
56
|
|
4
|
|
0
|
|
60
|
|
|
|
|
|
|
|
|
|
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
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