Coach beats Street as profit soars 26%
New York City — Coach reported Tuesday that net income for the quarter ended Jan. 1 rose a better-than-expected 26% to $303.4 million on strong sales, compared with $240.1 million in the year-ago period.
The company credited a rebound in U.S. luxury spending, as well as soaring holiday sales in China for the strong performance.
Sales leaped 18.7% to $1.26 billion, boosted by a same-store sales increase of 12.6% in North America.
On average, Wall Street expected revenue of $1.21 billion.
In China, where Coach is still new to the market but now operates 52 stores, sales rose by double digits on a percentage basis. Revenue in Japan rose 8% in dollars, helped by a stronger yen.
Coach has positioned itself in the "affordable luxury" segment in the past two years as shoppers have cut back on the most expensive items. It has lowered average prices on its handbags by about 10% by introducing a lineup of handbags under $300 and by expanding its outlet stores.
Coach also said it will buy back up to $1.5 billion of its outstanding shares by June 30, 2013.
The company had 347l stores and 129 factory outlets at the end of the quarter in North America. In Japan, Coach had a total to 171 retail locations and in China, 52.
Bon-Ton extends CEO contract, names new COO
YORK, Pa. — The Bon-Ton Stores announced its board of directors unanimously approved an amendment to Bud Bergren’s employment agreement, which states Bergren will continue to serve as president and CEO through Feb. 5, 2012. His term as president and CEO will automatically renew for successive periods of one year unless either the company or Bergren elects not to renew his term as president and CEO. Subsequent to Bergren’s term as president and CEO, he will continue as a director, and, at the company’s election, will also serve as the chairman of the board until the annual meeting of shareholders that is at least 12 months following the end of the CEO Term.
Tim Grumbacher, executive chairman of the board of directors, commented, “We are very pleased that Bud has accepted the board’s request to continue in his role as president and CEO. Bud provides significant leadership and insight to identify strategic initiatives as we leverage our operational and merchandising strengths. Bud’s vision, leadership and execution continue to guide us and we look forward to his ongoing contributions as we position our company for future growth and profitability.”
Additionally, the company announced that Barbara Schrantz has been promoted to the position of COO, effective Jan. 30. Schrantz is currently EVP sales promotion and marketing. In addition to her current responsibilities, Schrantz will have stores, visual, logistics and distribution, loss prevention, construction, human resources, corporate procurement and operations and information systems reporting to her.
Schrantz has 24 years experience in the department store industry. She has been EVP sales promotion and marketing since March 2009. Prior to that, Schrantz served as EVP stores and visual since March 2008. She served as SVP merchandise planning and Internet marketing from September 2006 to February 2008, and as SVP, product development and private brand from September 2005 to August 2006. Before joining Bon-Ton, Schrantz held various merchandising posts of increasing responsibility, including SVP general merchandise manager, at the 53-store Profitts/McRae’s division of Saks Incorporated for more than five years.
McDonald’s Q4 and full year income up
Oakbrook, Ill. — McDonald’s Corp. said net income for the fourth quarter, ended Dec. 31, 2010, rose 2.1% to $1.24 billion from $1.22 billion a year earlier.
Revenue increased 4% to $6.21 billion in the fourth quarter from $5.97 billion a year earlier. Global same-store sales rose 5% in the quarter, reflecting increases of 4.4% in the United States, 3.4% in Europe and 5.5% in the Asia/Pacific, Middle East and Africa division.
For the full year, McDonald’s reported net income of $4.95 billion, up 9% from $4.55 billion in fiscal 2009. Revenue rose 6% to $24.07 billion in 2010, compared with $22.74 billion a year earlier.
McDonald’s chief executive Jim Skinner said that the company would take much of its cash flow and deploy it in 2011 for capital expenditures related to upgrading and reimaging restaurants around the world, a key long-term initiative for the brand.
“In 2011, we plan to invest about $2.5 billion of capital — roughly half dedicated to opening approximately 1,100 new McDonald’s restaurants and the other half allocated to investing in our existing locations, including reimaging,” Skinner said.