Coach 2011 Annual Report Download - page 35

TABLE OF CONTENTS
FISCAL 2011 COMPARED TO FISCAL 2010
The following table summarizes results of operations for fiscal 2011 compared to fiscal 2010:
Fiscal Year Ended
July 2, 2011 July 3, 2010 Variance
(dollars in millions, except per share data)
Amount % of
net sales
Amount % of
net sales
Amount %
Net sales $4,158.5 100.0% $3,607.6 100.0% $ 550.9 15.3%
Gross profit 3,023.5 72.7 2,633.7 73.0 389.9 14.8
Selling, general and administrative
expenses
1,718.6 41.3 1,483.5 41.1 235.1 15.8
Operating income 1,304.9 31.4 1,150.2 31.9 154.8 13.5
Provision for income taxes 420.4 10.1 423.2 11.7 (2.8) (0.7)
Net income 880.8 21.2 734.9 20.4 145.9 19.8
Net Income per share:
Basic $ 2.99 $ 2.36 $ 0.63 26.6%
Diluted 2.92 2.33 0.59 25.5
Net Sales
The following table presents net sales by operating segment for fiscal 2011 compared to fiscal 2010:
Fiscal Year Ended
Net Sales Rate of Change Percentage of
Total Net Sales
July 2,
2011
July 3,
2010
July 2,
2011
July 3,
2010
(dollars in millions) (FY11 vs. FY10)
Direct-to-Consumer $ 3,646.4 $ 3,178.7 14.7% 87.7% 88.1%
Indirect 512.1 428.9 19.4 12.3 11.9
Total net sales $ 4,158.5 $ 3,607.6 15.3 100.0% 100.0%
Direct-to-Consumer — Net sales increased 14.7% to $3.65 billion during fiscal 2011 from $3.18 billion during fiscal 2010, driven
by sales increases in our Company-operated stores in North America and China. Net sales of fiscal 2010 included an additional week of
sales, which represented approximately $62 million.
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 15.0% 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 14.4% driven by sales from new and expanded stores and by a 10.6% increase in comparable
store sales. During fiscal 2011, Coach opened three net new retail stores and 22 new factory stores, and expanded six factory stores in North
America. In Japan, net sales increased 5.1% driven by an approximately $69.8 million, or 9.8%, positive impact from foreign currency
exchange. During fiscal 2011, Coach opened eight 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 2011, Coach opened 25 net new stores in Hong
Kong and mainland China.
Indirect — Net sales increased 19.4% to $512.1 million from $428.9 million in fiscal 2010. The increase was driven primarily by an
18.4% increase in Coach International Wholesale and U.S. Wholesale net revenue. The net sales increase was partially offset by an
additional week of sales in fiscal 2010, which represented approximately $8 million. Licensing revenue of approximately $24.7 million and
$19.2 million in fiscal 2011 and fiscal 2010, respectively, is included in Indirect sales.
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