- Coach (COH) reports operating margin fell to 12.6% from 20.4% in FQ4 as higher SG&A expenses factored in.
- North American sales fell 20% Y/Y to $556M off weak results at department stores.
- Gross profit rate -40 bps to 69.0%.
- SG&A expense rate +740 bps to 56.4%.
- International sales -5% to $392M. Sales in China were up 5%.
- Store count changes (Q/Q): North America -16 to 462, Japan -2 to 196, China +6 to 171, Asia - Other +1 to 102, Europe +3 to 34.
- Guidance: Coach expects low-single digit revenue growth on a constant currency basis for FY16. A gross margin rate of ~70% is expected. Operating margin rate is seen in the mid-to-high teens.
- Previously: Coach beats by $0.02, beats on revenue
- COH -2.0% premarket.