Positive sales and outlook for Coach
25 January 2012Coach’s fiscal second-quarter earnings rose 15%, with its leather merchandise seeing demand from a growing men’s business and the retailer enjoying a good performance in the US and China. ‘We've experienced strong response to our new collections and our pricing and assortment strategy continue to resonate with consumers worldwide,’ Coach Chief Executive, Lew Frankfort said.
Coach's women's handbag and accessory sales rose about 12% across all channels in North America during the most recent quarter.
Outside the US, China remains a growth area for Coach, despite indications that its economy is cooling. ‘We continue to generate very strong sales growth, significant double-digit comparable-store sales in China,’ where the company has 80 locations and believes it can do $300 million in sales in its current fiscal year, Frankfort said.
The retailer also continues to expand their men's accessories lines, which Frankfort said is on pace to double in the current fiscal year to more than $400 million in global sales.
For the quarter ended December 31, Coach reported a profit of $347.5 million, or $1.18 a share, up from $303.4 million, or $1 a share, a year earlier. Sales jumped 15% to $1.45 billion.
Gross margin slipped to 72.2% from 72.4%, but the decline was less than analysts expected.
Direct-to-consumer sales, which now include its Singapore business, increased 17%. Same-store sales rose 8.8% in North America and were flat in Japan, on a constant-currency basis. Indirect sales were flat at $166 million, hurt by the timing of international shipments.
