Coach’s strategy is paying off. For the second quarter, the company posted a rise in quarterly profit as the company cut back on discounts in the United States while selling more handbags in China and Japan. In efforts to regain its status as a premium band, Coach has limited promotions and pulled out of more than 250 department stores to control pricing and distribution.
Victor Luis, Chief Executive Officer of Coach, Inc., said, “We are both pleased and proud of our performance this holiday season, particularly in light of the challenging and volatile global retail environment. Our team delivered top-line growth in each of our reportable segments, highlighted by positive comparable store sales in North America and overall gross margin expansion. We continued to grow our business internationally, with notable strength in Europe and Mainland China, which represent significant opportunities for our brands. Importantly, we opened key global flagship locations on Fifth Avenue in New York City and Regent Street in London, which embody our modern luxury vision and celebrate our heritage and 75-year history of craftsmanship. And, despite our deliberate pullback in the North America wholesale channel and currency headwinds, we delivered double-digit earnings growth in the quarter.”
According to MarketWatch:
North American Coach brand sales increased 2% to $744 million during quarter, led by a 5% increase in direct sales and 4% growth in same-store sales.
In all for the second fiscal quarter, which included crucial holiday sales, Coach reported a profit of $199.7 million, or 71 cents a share, up from $170.1 million, or 61 cents, a year earlier. On an adjusted basis earnings rose to 75 cents a share from 68 cents a year ago.
Revenue rose 3.8% to $1.32 billion.
Analysts polled by Thomson Reuters had forecast earnings of 74 cents on $1.32 billion in revenue.