Coach 2012 Annual Report Download - page 35

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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