Coach’s North American Results Continue To Disappoint

by Trefis Team
Rate   |   votes   |   Share

Coach (NYSE:COH), a leading American marketer of luxury handbags and other fashion accessories, posted lackluster results in Q1 fiscal 2014, which led to 8% drop in its stock price. The fashion retailer’s sales increased by 2% on a constant currency basis, but a weaker yen dragged its sales down by 1% to $1.15 billion. The company reported disappointing results in the North American region, where it continues to struggle in the women’s handbags and accessories market, owing to rising competition from fashion newcomers such as Michael Kors, Kate Spade and Tory Burch.

Coach’s gross margin dropped by 100 basis points during the quarter and operating margin also slipped to 27.9% as compared to 28.6% in Q1 last year. We expect the profitability to continue to decline in annual terms during the coming quarters. However, the international (ex Japan) and men’s businesses saw strong growth during the quarter and we expect them to be long-term growth drivers for the company.

See our complete analysis for Coach

Weak Performance In North America, Guidance Continues To Be Negative

Coach’s sales in North America dropped by 1% in Q1 fiscal 2014, with 1% and 6.8% fall in direct sales and comparable store sales respectively. We are discouraged by this significant decline in comparable stores sales as it indicates that Coach is losing market share to newer fashion players such as Michael Kors. The decrease in sales was also attributed to weak in-store traffic trends during the quarter.

The future guidance is also less promising as the company’s management projected the North American comparable stores sales growth to decline in the high single-digits for the rest of the fiscal year. [1] North America, contributes for around two-third of Coach’s sales and we believe intense competition in the women’s handbags and accessories market in the region will be closely tracked by the market in the coming months as it will play a vital role in the company’s share price movement. We believe Coach will continue to struggle in the North American market in the near-future due to increased competition.

Coach’s Transformation Strategy Being Undertaken To Boost Sales

Coach is undertaking a transformation of its brand to move from an accessories brand to a lifestyle brand. The company has introduced an innovative capsule collection of lifestyle categories such as bags, outwear and footwear in this holiday quarter as part of this move. It has also enhanced its marketing activities to spread this new brand image among customers. We believe the results of this strategy will take some time to yield significant results as a full reflection of this new brand image may take a few years to complete.

International Business Represents Long-Term Growth Driver

Coach’s international sales fell by 1% in dollar terms due to the weaker yen. However, it rose by 9% in constant currency basis. China continues to be a sweet spot for the company as sales rose by over 35% in the region driven by increased distribution and double digit comparable stores sales growth. The company has major expansion plans in China as it expects to grow its square footage by around 25% in the region during the fiscal year. It also forecasts sales to grow by more than 20% in China during the entire fiscal year. ((Coach’s CEO Discusses F1Q 2014 Results – Earnings Call Transcript, Seeking Alpha, October 22, 2013))

Coach’s sales in the other Asian markets of Korea, Taiwan, Malaysia and Singapore also continued to grow at a strong rate. The fashion retailer has completed the acquisition of its European joint venture, and plans to open 50 wholesale and 10 retail stores across the region during the fiscal year. ((Coach’s CEO Discusses F1Q 2014 Results – Earnings Call Transcript, Seeking Alpha, October 22, 2013))

Japanese sales fell by 2% on a constant currency basis, however, in dollar terms in decreased by 22%. We believe that a weaker yen will continue to pose a headwind to the company’s sales in the region in the coming quarters.

Coach also aims to grow its distributor-run business in Latin America, other Asia-Pacific countries (Australia, Thailand and Indonesia) and in the Middle East. Due to these measures, we think the proportion of international sales in Coach’s overall sales will increase in the future.

Men’s Business Also Holds Upside

Facing pressure in the women’s handbags and accessories market, Coach is focusing on the growing men’s business to increase its sales. Sales in the global men’s bags and accessories business rose by 25% in the first quarter and the company further estimates sales in this business to grow by over 20% during the fiscal year. [1]

We are in the process of revising our $59.50 price estimate for Coach’s stock.

Understand How a Company’s Products Impact its Stock Price at Trefis

  1. Coach’s CEO Discusses F1Q 2014 Results – Earnings Call Transcript, Seeking Alpha, October 22, 2013 [] []
Rate   |   votes   |   Share


Name (Required)
Email (Required, but never displayed)
Coach Logo
  • commented 5 months ago
  • tags: COH JNY GPS RL
  • In fact, I recommend you call the beginning of spring models of men I was rejected,

    gucci online

    because you can not call me a recommendation,

    cheap gucci

    I would recommend, first I'm going to the counter to try,

    gucci shoes

    because I do not want to wear uncomfortable shoes recommended for everyone,

    gucci outlet

    so other users will curse me out.

    gucci bags outlet

    I would not hold up, it turned out,

    gucci sale

    I recommend these shoes are also comfortable and nice to wear on my feet so that you wear as well.

    gucci outlet online

    Let us talk about business shoes now,

    gucci handbags

    many boys wear suits and ties every day, very formal,

    gucci handbags

    but dress shoes felt uncomfortable footrest, has been very hard work every day,

    gucci purses outlet

    the soles are soft leather insole of the most comfortable fit.

    gucci factory outlet

    Let me say casual shoes, this is probably the highest rates of shoes,

    gucci bags

    and basically what occasion could see his shadow,

    gucci outlet online

    my suggestion is more textured leather material,

    gucci purses

    tendon soles more durable, and the best there is more than a pair of casual shoes,

    gucci handbags

    different styles colors easy to match.

    gucci shoes outlet

    Geox shoes known to be breathing, keep feet dry and comfortable.

    gucci shoes sale

    Finally, talk about sports shoes,

    gucci sneakers

    sports shoes breathable and more attention because of the movement of the foot most active sweat glands,

    gucci shoes online

    and a pair of sneakers and good ventilation can help you in a timely manner the heat,

    gucci shoes outlet

    sweat discharge, does not feel wet stuffy, has been a constant temperature in the foot environment.

    air jordans

    With the 2015 spring and summer men's Paris show last week staged,

    nike air jordans

    this men's week came to an end.

    jordan shoes

    Before the next spring and summer men's inventory trends,

    air jordans sale

    we take a look at as one of the men's one of the highlights of the design.

    authentic jordan shoes

    Although shoes compared to men's design limitations more,

    cheap air jordans

    but the designer is possible to display their creativity, so that more and more men's footwear "fancy."

    jordan shoes sale

    2015 spring and summer men's T-week stage,

    retro air jordans

    men's sandals, strap flat sandals and sneakers almost "third world",

    jordan shoes sale

    but all the details to make a creative and their characteristics.

    air jordans online

    Next, we took all the spring and summer 2015 men's list of the most eye-catching Week 10 pairs of shoes.

    nike outlet online

    Its 2015 spring and summer series with ballet as a muse.

    nike air max 90

    This inspiration is reflected not only in the design of clothing,

    nike air max shoes

    sandals and even model also resembles ballet shoes.

    air max 90

    2015 Spring Paris men's week,

    nike shoes outlet

    that both exaggerated pointed shoes like the Venetian gondola to wear in the feet,

    nike shox shoes

    Velvet uppers coupled with exquisite embroidery and Obscure,

    nike shox r4

    both warm red or elegant black, have revealed a thick Spanish style.

    nike shox nz

    If you think the fans just a woman's patent, it would be wrong.

    nike shox shoes

    VERSACE 2015 spring and summer men on the show,

    nike shox nz

    a full-pink styling overturned people pink definition.

    nike shox r4

    But this pair of pink shoes but did not significantly feminine,

    nike shox shoes

    with the right mix if it will be the highlight of the dress.

    nike shox shoes

    soles from 16 Polymer polymers, looks quite high-street style.

    nike shoes outlet

    After taking over MOSCHINO Jeremy Scott brought their own ideas of design.

    nike shoes online

    Lovely smile printed in bright yellow shoes who will designer "superficial, fun, popular"

    nike outlet store

    The design concept flourish, may in turn become the new season fashions.

    nike shoes sale

    This double kolor appear on the show is one of the sports sandals sandals masterpiece Fashion Week this season.

    cheap nike shoes

    So refreshing color, put it feels as if wearing the same summer.

    cheap coach handbags

    The Roman-style rather VERSACE strap sandals style is very retro.

    cheap gucci shoes

    Delicate purple ribbon weaving as decoration,

    cheap gucci shoes

    making nude-colored bandage does not seem too monotonous.

    cheap gucci purses

    This shoe resembles a boxing shoes high-top sneakers,

    cheap gucci sneaker

    the color is red, white and blue, with a strong French style,

    gucci outlet online

    and long-barreled strap design also makes it stand out in sports shoes.

    gucci bags on sale

    VERSACE Fashion Week this season is definitely the big winner in the footwear,

    gucci handbags outlet

    the show floor a variety of styles, but each pair are so delicate.

    gucci outlet store

    The striped oxford shoes colorful, vibrant but not too assertive,

    gucci shoes online

    with casual pants will be the finishing touch.

    cheap gucci sunglasses

    Men show floor this week despite the major brands have released the 2015 spring and summer,

    cheap gucci purses

    but it seems that many of the styles are somewhat "familiar."

    gucci factory outlet online

    Such as DOLOCE & GABBANA red and black loafers,

    gucci handbags outlet

    with exquisite embroidery and Obscure for salient points,

    gucci factory outlet online

    but this design has been able to see in other brands,

    gucci shoes outlet

    which began a few years to do men's ChristianLouboutin is one of the representatives.

    cheap gucci purses

    And in the style sandals, a big trend this season is menswear week straps,

    cheap gucci shoes

    just like VERSACE such delicate straps design is not much,

    gucci shoes sale

    most of the brand launched a simple and generous strap sandals or dominated.

    cheap gucci shoes

    Sneakers are the most abundant part,

    gucci shoes online

    designers have chosen to bring a bold unique beauty between fashion and sports style between the use of color and design.

    gucci shoes on sale

    Overall, this Fashion Week adequate design is actually the color of the shoes are rare,

    jordan shoes on sale

    perhaps because of men's design is still in an effort to break out of the state,

    retro air jordans

    but we still try new designers like to see brought,

    nike air jordans

    and believe which always has some nice shoes to attract the attention of consumers in the next year in spring and summer men's shoes set off a new season trend.

    jordan shoes on sale

    2015 spring and summer season to introduce you to the conference & exhibition refined analysis of children's shoes,

    jordan shoes

    Sports shoes sneakers still using bright colors and eye-catching styling,

    cheap jordan shoes

    bright metal, flash patch, Montreal prints and stripes decorated men's and women's shoes.

    air jordans sale

    Whether male or female shoes shoes,

    authentic air jordans

    Velcro (buckle) are the main details of street style and sneakers.

    air jordans

    Highlights the fashion bright neon colors.

    jordan shoes online

    Main season sneaker styling for the buckle strap lacing sneakers and high-top sneakers,

    nike outlet online

    suede leather, iridescent fabrics and cotton-padded tongue charge.

    cheap air max 90

    Women's shoes to help low season to remove a lot of decoration,

    cheap air max shoes

    and focus on printing, fabric, and rubber soles,

    cheap nike air max 90

    and a flash of bright metallic colors and multiple thick highly personalized.

    nike outlet online

    According to the trend of this season's men's shoes,

    nike shoes online

    the soles of Oxford to uneven shading decorated,

    nike shoes outlet

    with contrasting color details, conspicuous prints and cut openwork design.

    nike air max shoes

    Doll shoes women shoes, children's shoes in the wild,

    nike outlet store

    with dresses and casual wear can match to each other,

    nike factory outlet

    the spring and summer 2015 women's shoes this season's highlights for contrasting color toe.

    wholesale gucci online

    2015 spring and summer ballet flats shape,

    cheap gucci online

    metallic color printing from suede to ginning pattern, with different decorations.

    cheap gucci sale

    Candy-colored patent leather T-strap so simple sandals look, especially with the heavy decoration and 3D applique with time.

    discount gucci online

    This season, whether it is highly personalized Birkenstock sandals or thin strap sandals,

    discount gucci online

    cross-type multi-strap sandal strap and a girl's favorite.

    cheap gucci sale

    Conspicuous color trim, comfortable footbed, buckle strap and tactile soles designed for boys and girls sports sandals.

    discount gucci sale

    Polyethylene plastic as the main material of fisherman sandals,

    wholesale gucci online

    and gradually popular in the shoes market,

    wholesale gucci sale

    suede and leather material which is also the main.

    cheap gucci online

    Girls sneakers adds glitter decorative fabrics and thumbtacks.

    air jordan 1

    Buckle straps and rubber soles lightweight and comfortable.

    air jordan 13

    Get inspiration from all major brands of color combinations designed to spring and summer season of men's shoes continue to be bright colors,

    air jordan 11

    prints and textures designed to be personalized highlights.

    air jordan 5

    "Vacation noble" fresh and modern theme, inspired by the macro trends "Impulse" (ripple),

    air jordan 9

    mature style combines the feminine silhouette and street style sportswear aesthetic.

    jordan 1

    Vacation noble" fresh and modern theme, inspired by the macro trends "Impulse" (ripple),

    jordan 5

    mature style combines the feminine silhouette and street style sportswear aesthetic.

    jordna 7

    From white to black and white monotone summer,

    jordan 9

    bright colors and contrasting gray color with a very prominent,

    jordan 11

    conspicuous new mash contrast stripes and prints.

    nike air max 90 sale

    Sporty trim and functional fabrics, such as gauze,

    nike air max 90 online

    fiber crafts, simple silhouette, clothing adds a sports activity,

    air max 90 sale

    while highlighting the soft flowing fabrics feminine element.

    air max 90 online

    light pastel pink and orange color tones such as dynamic modeling for the summer to add vitality.

    nike free run shoes sale

    Holiday noble "theme of material used in motor function type mesh,

    cheap nike air max 2015

    Details and trim details and luxurious surface motion integration,

    nike zoom shoes sale

    interpretation of the harmonious styling.

    cheap nike air force 1

    Motion based play elements, such as neoprene, mesh and sports Wind soles.

    nike zoom kd online

    Meanwhile, flat, muffin bottom and stacked with the highlights.

    Cheap Gucci Online,Cheap Gucci Shoes,Cheap Gucci Belts Online

    sock style mash fresh interpretation of the shape of the upper.

    wholesale gucci bags

    thick retro sports shoes jogging shoes and learn the advantages of functional running shoes.

    Cheap Gucci,Cheap Gucci Shoes,Cheap Gucci Purses Online

    laminated mesh fresh interpretation of results,

    cheap gucci bags

    such as transparent PVC Ethylene upper concave footbed comfortable,

    Gucci Bags,Gucci Bags Outlet,Gucci Outlet Online

    stylish colors. asymmetrical upper sandals highlight modern styling.

    discount gucci bags

    shaping soles toe ring package fit the foot. thin strip surface treatment elegant,

    Gucci Online,Gucci Outlet Online,Gucci Sale Online

    stylish cover large transparent gauze and clean PVC Ethylene fresh interpretation of upper high heel boots showing dramatic new mixed results.

    discount gucci wallets

    satin uppers and slender styling inspired by the sport of boxing boots vinyl acetate copolymer soles,

    Cheap Gucci Handbags,Cheap Gucci Shoes,Cheap Gucci Sunglasses Online

    uppers round sculpted styling and fresh.

    wholesale gucci sunglasses

    Montreal mesh upper Unified Sports Elements and elegant silhouette interpretation of fashion mixing.

    Gucci Factory Outlet,Gucci Factory Outlet Online,Gucci Outlet Online

    hasp reflect movement elements. boyfriend style sneakers reflect neutral modeling.

    mens gucci shoes

    luxury leather and lined with neoprene socks effect highlighting luxury traditional silhouette,

    Cheap Gucci Bags,Cheap Gucci Purses,Cheap Gucci Handbags Online

    minimalist upper and pure Shoe colors for the highlights online - IT professional shoes shoes,

    womens gucci shoes

    shoe style design gallery, designed shoe designers,

    Gucci Shoes,Gucci Shoes Outlet,Cheap Gucci Shoes Online Sale

    design enthusiasts shoes, shoes, shoe design business owners to provide the latest information .

    gucci belts outlet

    2015 trends in shoes, spring and summer 2015 women's conference season presentation focused on color analysis.

    Gucci Shoes Online,Mens Womens Gucci Shoes,Gucci Shoes Sale For You

    Shoes lemon juice wine yellow pastel colors such as vibrant bright new spring and summer 2015 is the season of color,

    gucci sunglasses online

    such as bright sunshine yellow color Blocks of color combinations and contrasting color orange for the fire,

    Authentic Air Jordans,Jordan Shoes Online Sale

    Whether casual shoes or dance shoes,

    Air Jordans,Jordan Shoes,Cheap Air Jordan Shoes Online

    fire orange can be the perfect control.

    Nike Air Max,Nike Air Max Shoes,Nike Outlet Online Sale

    highly personalized red and orange hues complementary large,

    nike air max shoes sale

    the same season conference The main leisure sports flat shoes,

    nike air max 95

    solid color highlight the vitality and heel with harmony and luxury.

    Air Max 90,Nike Air Max 90 For Cheap Sale

    From fresh mint green to green, dark green or dark matter leaves,

    nike air max 87

    green in the conference this season are the main colors,

    discount nike air max

    so that the material exudes shimmer satin and leather and canvas to make casual style regained relaxed summer style from metal bright,

    Nike Shox Nz,Cheap Nike Shox Nz,Nike Shox Nz Sale Online

    shoes with classic denim color still primarily high bright leather more retro feel,

    Nike Shox R4,Nike Shox Shoes,Nike Shox R4 Online

    creamy texture of blue tones highlight the maturity profile shape.

    Cheap Nike Shox R4,Cheap Nike Shox R4,Nike Shox R4 Sale Online

    After reading the grass green theme, we also see blue-green appeared in the press conference.

    Nike Shox Sale Online,Discount Nike Shox Shoes

    From the bright turquoise blue color to the classic green,

    Nike Factory Outlet Online,Nike Factory Outlet Shoes Store

    blue and green the previous quarter,

    Gucci Belts,Gucci Belts Outlet,Gucci Belts Online

    retro blue adds vitality from sweet purple, strawberry, watermelon color to bright blue and green,

    gucci belts outlet

    pastel pink color macarons style appeared in the conference this season.

    designer belts online

    styling and flat boots for men, the female models heel and high-heeled.

    cheap louis vuitton belts

    soft neutral colors, such as light brown, gray, cream,

    cheap gucci belts

    are the main color in the spring and summer of 2015.

    Tiffany And Co Jewelry,Tiffany And Co Outlet Online Sale

    The same applies to clothing color cosmetics for the minimalist silhouette adds a refined sense of whiskey brown as the main color to return this season,

    tiffany and co jewelry online

    From the dark brown suede leather, fabric material is different.

    designer jewelry sale

    2015 spring and summer very commercially attractive monochrome color is still the main focus of color in spring and summer 2015 conference.

    tiffany and co jewelry sale

    White filled in a variety of shapes, whether casual flat or high-heeled personality.

    tiffany and co necklace sale

    Black and white also demonstrates the summer personality style,

    chanel jewelry online

    design or materials for decorative stitching.

    chanel necklace sale

    Shoe Design Online is a professional shoe design,

    juicy couture jewelry online

    designed to provide information for the shoe designer shoes,

    juicy couture necklace sale

    fashion shoes style trend analysis and browsing online map services.

    Oakley Outlet,Cheap Oakley Sunglasses,Oakley Sunglasses Online

    2015 shoe trends, with flat summer sandals have a long central loop belt,

    cheap oakley sunglasses

    slim leather belt loop also bifurcation side extension.

    cheap designer sunglasses

    With wooden beads to create natural decor.

    cheap prada sunglasses

    Multi-loop strap sandals with a two-tone leather,

    cheap ray.ban sunglasses

    using layered leather soles to build, simple fastener complements the soft colors.

    cheap louis vuitton sunglasses

    2015 shoe trends, through soft butter leather flat shoes were interpreted, large leather bow also decorated the design, color stitching between summer and dried flowers printing selection.