Coach CEO Chides 'Microscopic' Analysis as Shares Fall
Coach Chairman and Chief Executive Lew Frankfort is upbeat about the health of his company, despite an outlook that came in below analysts' estimates.
Shares of the high-end accessory maker plunged around 12 percent on the New York Stock Exchange on Tuesday.
"We're held to a very high standard," Frankfort told CNBC.
"There's a microscopic analysis of everything we do, and this is just a single metric. Same-store sales only represent about 30 percent of our global sales, and we have a very broad and diversified business model, and we can easily weather a reduction."
Net income for the company's fiscal first quarter rose to $154.8 million, or 41 cents per share, up from $125.6 million, or 34 cents per share, a year earlier.
For the current quarter, Coach predicted earnings of 68 cents per share; analysts were looking for 70 cents.
The company stood by its forecast of $2.06 per share for the full year 2008, but analysts had been expecting $2.08.
Is it unusually warm fall weather or a cooling U. S. economy that's to blame?
"If you are not buying a new fall outfit," said Needham analyst Christine Chen, "then you probably will not buy a bag or shoes to match it."
CEO Frankfort isn't fazed: "Weather is temporary," he said. "Macro-environmental factors are longer term."