Coach, a holding in Market Shadows' Virtual Value Portfolio, beat earnings estimates today.
North American revenues were up 7% and international sales grew by 6%.
For Coach (COH), big moves after earnings reports are becoming a habit. That trend was intact Tuesday when the high-end handbag seller topped analysts' earnings estimates and posted surprisingly bright North American numbers, lifting the shares 11%.
New York-based Coach was expected to earn 80 cents a share on sales of $1.18 billion in the fiscal third quarter, according to FactSet, but it exceeded both, turning a profit of 84 cents a share with revenue of $1.19 billion. However, it was the North American segment, its largest, that was the real standout.
While the China component of Coach's business remained strong, with sales rising around 40% year over year for the third consecutive quarter, domestic sales totaled $792 million, up 7% from the prior year. More impressively, same-store sales were much better than predicted, climbing 1%, compared with a decline of 1.4% that had been foreseen by Wall Street analysts. Continue here >
Coach represents a double buy (full 5% holding) in Market Shadows' Virtual Value Portfolio.
Previously Paul wrote an article on COH at Real Money Pro called Sell Tiffany, buy Coach.
Disclosure: Long COH shares