Coach 2011 Annual Report Download - page 32

TABLE OF CONTENTS
FISCAL 2012 COMPARED TO FISCAL 2011
The following table summarizes results of operations for fiscal 2012 compared to fiscal 2011:
Fiscal Year Ended
June 30, 2012 July 2, 2011 Variance
(dollars in millions, except per share data)
Amount % of
net sales
Amount % of
net sales
Amount %
Net sales $ 4,763.2 100.0% $ 4,158.5 100.0% $ 604.7 14.5%
Gross profit 3,466.1 72.8 3,023.5 72.7 442.6 14.6
Selling, general and
administrative
expenses
1,954.1 41.0 1,718.6 41.3 235.5 13.7
Operating income 1,512.0 31.7 1,304.9 31.4 207.1 15.9
Provision for income
taxes
466.8 9.8 420.4 10.1 46.4 11.0
Net income 1,038.9 21.8 880.8 21.2 158.1 17.9
Net Income per share:
Basic $ 3.60 $ 2.99 $ 0.61 20.5%
Diluted 3.53 2.92 0.61 20.9
Net Sales
The following table presents net sales by operating segment for fiscal 2012 compared to fiscal 2011:
Fiscal Year Ended
Net Sales Percentage of
Total Net Sales
June 30,
2012
July 2,
2011
Rate of
Change
June 30,
2012
July 2,
2011
(dollars in millions) (FY12 vs. FY11)
Direct-to-Consumer $ 4,231.7 $ 3,646.4 16.1% 88.8% 87.7%
Indirect 531.5 512.1 3.8 11.2 12.3
Total net sales $ 4,763.2 $ 4,158.5 14.5 100.0% 100.0%
Direct-to-Consumer — Net sales increased 16.1% to $4.23 billion during fiscal 2012 from $3.65 billion during fiscal 2011, driven
by sales increases in our Company-operated stores in North America and China.
Comparable store sales measure sales performance at stores that have been open for at least 12 months, and includes sales from
coach.com. Coach excludes new locations from the comparable store base for the first year of operation. Similarly, stores that are expanded
by 15% or more are also excluded from the comparable store base until the first anniversary of their reopening. Stores that are closed for
renovations are removed from the comparable store base.
In North America, net sales increased 12.7% driven by sales from new and expanded stores and by a 6.6% increase in comparable store
sales. During fiscal 2012, Coach opened 9 net new retail stores and 26 new factory stores, and expanded 10 factory stores in North
America. In Japan, net sales increased 11.7% driven by an approximately $40.1 million, or 5.3%, positive impact from foreign currency
exchange. During fiscal 2012, Coach opened 11 net new locations and expanded three locations in Japan. Coach China results continued to
be strong with double-digit percentage growth in comparable store sales. During fiscal 2012, Coach opened 30 net new stores in Hong Kong
and mainland China.
Indirect — Net sales increased 3.8% to $531.5 million from $512.1 million in fiscal 2011. The increase was driven primarily by a
7.9% increase in Coach International Wholesale net revenue, partially offset by a 1.6% decrease in U.S. Wholesale net revenue. Licensing
revenue of approximately $28.5 million and $24.7 million in fiscal 2012 and fiscal 2011, respectively, is included in Indirect sales.
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