Transformation costs impact Coach Q3 net income

New York –- Organizational efficiency costs and charges related to store closures and upgrades that are part of an ongoing transformation plan negatively impacted net income reported by Coach Inc. during the third quarter of fiscal 2014. Net income totaled $146 million, down 33% from $218 million in the same quarter the previous fiscal year.



Sales fell 10% to $1.04 billion from $1.15 billion. North American sales dropped while international sales slightly increased. Net income and sales results were within previously issued guidance.



“Our first quarter results were in line with our expectations and our annual guidance, as continued international growth was offset by our North American handbag business where we have strategically reduced promotional events,” said Victor Luis, CEO of Coach.



“Importantly, we made progress on the transformation plan outlined this summer to address brand challenges and bring greater fashion relevance to Coach across the three pillars of product, stores and marketing. While we recognize that our many initiatives will take time to be evidenced in our financial results, our performance to date has been on plan, and we are confident we have the creative direction, team and resources to execute our brand transformation."