Coach Q3 profit rises on 17% sales increase
New York — Coach Inc. posted a higher-than-expected quarterly profit on Tuesday, benefiting from strong sales and improved margins. The company also announced that its board of directors has voted to increase its cash dividend by 33%.
Net income for the third quarter ended on March 31 was a better-than-expected $225 million compared with $186 million a share, a year earlier.
Revenue rose 16.6% to $1.11 billion, just above analysts’ expectations. Same-store sales in the United States rose 6.7%.
In China, sales jumped 60% and were on pace to hit at least $300 million this year.
Coach also said it is eliminating coupons at its factory outlet stores.
“Leveraging the underlying strength of our North American business we implemented a significant shift in our pricing strategy in factory stores during the quarter, as we eliminated in-store couponing across our network. Our new ‘no math’ pricing structure provides us with greater marketing flexibility, enabling us to balance productivity gains and margin improvement,” said Lew Frankfort, chairman and chief CEO, Coach.
The company said it will buy back its retail business in Malaysia this July, and Korea in 2013, from local partners. That follows similar moves by the chain in Taiwan this year and Singapore last year.
RadioShack focuses on future after lackluster Q1
FORT WORTH, Texas — RadioShack’s sales and earnings fell in the first quarter, as the company struggles to deliver an effective mix or products and services to its customers.
The company reported that total net sales and operating revenues from continuing operations for the 2012 first quarter decreased 0.9% to $1.01 billion, compared with $1.02 billion for the 2011 first quarter. The decrease in total net sales and operating revenues for the 2012 first quarter was driven by a $61.6 million decrease in sales from U.S. RadioShack company-operated stores, the company said. This decrease was partially offset by a $52.5 million increase in other sales, reflecting an additional 610 Target Mobile centers in operation at March 31, compared with March 31, 2011. Comparable-store sales for company-operated stores and Target Mobile centers decreased 4.2% during the 2012 first quarter, which was primarily attributable to a decline in Sprint postpaid wireless sales, as well as decreased sales of prepaid wireless handsets, laptops and home entertainment accessories. This decrease was partially offset by higher postpaid wireless sales of AT&T, as well as sales of tablet devices, tablet accessories, headphones, and a net increase in sales at U.S. RadioShack company-operated stores of Verizon Wireless postpaid sales compared with T-Mobile postpaid sales in the 2011 first quarter.
Net loss for the 2012 first quarter totaled $8 million, or 8 cents per diluted share, compared with net income of $35.1 million, or 33 cents per diluted share, for the 2011 first quarter.
Jim Gooch, president and CEO of RadioShack Corp., said, "As we anticipated, the first quarter was extremely challenging. While our results were disappointing, we are working quickly to drive top line growth and expand margins. We were pleased to see progress from initiatives we began implementing last year, particularly in our highest gross margin signature platform. We believe these initiatives contributed to monthly sequential improvement in Company performance throughout the quarter that has continued into April."
Gooch continued, "Moreover, we are acting decisively to improve our marketing, with a sharpened mobility message that heightens awareness of our broad mobile offerings, a changed media mix, and a new lead creative agency. We are continuing to capitalize on our successes in expanding product assortments in the signature product platform. And, we are pursuing incremental growth through targeted international ventures and relationships that build on our strengths."
In order to improve sales and profits, the company said it is focused on an ongoing shift to mobility, maximizing profits in its signature platform and pursuing growth opportunities.
Gooch concluded, "As we look to the remainder of 2012, we realize we have a lot of work to do, and we are focused on initiatives that are aligned with the areas of our business where we see the greatest opportunity. Specifically, we are building consumer awareness of our broader and more compelling mobility platform, regaining relevance and continued momentum within our signature business, and pursuing select incremental growth opportunities as we continue our disciplined approach to cash management and work to return value to our shareholders."
NRF names communications leader
WASHINGTON — The National Retail Federation has named Bill Thorne SVP communications and public affairs. He will join NRF on June 1 to oversee the organization’s industry and public affairs communications strategy, including NRF’s Retail Means Jobs campaign, a multi-million-dollar initiative to demonstrate the power of retail to America’s economy and the career opportunities within the industry. Thorne currently serves as senior director, community affairs at Walmart.
“Throughout his long career, Bill has proven himself to be an accomplished strategist with an incredible track record of creating and building successful campaigns,” said NRF President and CEO Matthew Shay. “As NRF continues to invest in talent and resources to promote the retail industry both in Washington and around the world, bringing in an executive at the intersection of retail and government will help us tell the industry’s story in an even more compelling way.”
During his tenure at Walmart, Thorne oversaw the creation and execution of campaigns for urban market entry, including budgets, strategy, and planning and development of both long- and short-term campaigns. He also served as senior director of advocacy outreach, where he created and successfully launched Walmart’s corporate, public, and political advocacy network.
Prior to Walmart, Thorne served as VP at DCI Group, where he led grassroots advocacy, public relations, and communications programming for a number of prestigious corporate and association clients. He also spent four years as director of political and legislative grassroots at the American Medical Association.
Earlier in his career, Thorne worked in various political capacities at the state and national levels including several years with the National Republican Senatorial Committee and more than five years with U.S. Senator Phil Gramm. A native of Georgia, he holds a B.A. in journalism and political science from the University of Georgia.