Luxury handbag maker Coach Inc (NYSE:COH) saw its shares record their biggest intraday gains since February after forecasting that sales will continue to grow despite the challenging economic climate.
Coach shares rose as much as 5.7% to just shy of the US$38 mark in early deals, although they did ease back as the morning wore on.
The New York-based group reiterated that it expects to grow revenues by “low-to-mid single digits” over the course of this year, while it is forecasting “double digit growth in both net income and earnings per diluted share”.
The bright outlook for 2017 on top of the decent if-not-spectacular figures for its first fiscal quarter gives investors hope that the turnaround for the business is on track.
Sales rose 0.7% to US$1.04bn for the three months to October 1st which slightly missed expectations of US$1.07bn, while per share profits came in in line with forecasts at 45 cents.
Comparable-store sales in North America rose 2%, while international rose 7% to US$395mln with a little help from some currency tailwinds.
“We are pleased with our performance in the quarter, highlighted by continued positive comparable store sales in North America and growth internationally,” said chief executive Victor Luis.
On top of the work it’s doing in-house, part of Coach’s turnaround for this coming year could include a merger with British fashion house.
Rumours in recent weeks have suggested that Coach is working with financial advisers to try and strike a deal as both firms grapple with a slowdown in luxury spending.
Shares in Coach were up 4% to US$37.30 on Tuesday Morning.
Story by ProactiveInvestors