Cooper Companies Earnings Call Nuggets: Gross Margin Details and MyDay Pricing
Cooper Companies (NYSE:COO) recently reported its third quarter earnings and discussed the following topics in its earnings conference call.
Gross Margin Details
Kimberly Gailun – JPMorgan: So just two quick ones. The first is on gross margin. And as we look at it sequentially in the quarter, you were down just over 100 basis points, and gave a lot of detail on the call, so thanks for that. And I think essentially what you are saying was, FX sequentially was about 30 bps worse. And most of the rest of that was manufacturing variances. So just hoping you could clarify that. Was there any mix impact sequentially? And then the follow-up is just with the lower tax that we’re seeing this year and how we should be thinking about earnings growth for next year? You had a bunch of different moving parts in the tax rate this year, and how we should think about that number as we get into ’14?
Gregory W. Matz – VP and CFO: Yeah, on the gross margin, I think you nailed it. We basically had the yen go against us a little bit from our last guidance. So, from a sequential standpoint, we did see about 30 basis point impact. If we do have – if you look back and I just have data for the last five or six years in front of me and you can see that Q3 is always kind of our lowest gross margin quarter, we see that dip, it’s normal. We have a number of manufacturing variances that come through including — we have traditionally shutdown our plants in December in order to do some maintenance and get it prepared for the year and that flows through naturally in the Q3 timeframe. On the tax side, we have had a lot of kind of one-time items pop up this year. We’re not in a position where we want to give guidance for next year. I did want to highlight that there are some things that are one-time in nature and that’s kind of why I brought that out. On the other side, that I did mention but you have a certain number of discrete items that reverse occasionally each year and the size of those items are really – we don’t know those in advance, and so that has an impact that can actually raise the rate. So at this point, we’re not going to go through and give yearly guidance for 2014 on the tax-rate.