Coach Earnings Preview: Trends We’re Watching

January 20th, 2012 by Trefis Team
COH: Coach logo
COH
Coach

As aspirational luxury retailer Coach (NYSE:COH) is scheduled to announce its Q2 fiscal 2012 results on January 24, [1] analysts and investors will have a keen eye on the company’s sales in domestic market during holidays and gains made in China around the Chinese New Year. Additionally, we will be keenly following the company’s strategy in the U.S. and Europe amid weak macroeconomic conditions. Coach is the leading American marketer of luxury lifestyle handbags and other fashion accessories and competes with premium apparel and accessories players like Ralph Lauren(NYSE:RL), Liz Claiborne (NYSE:LIZ) and Ann (NYSE:ANN).

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Check out our complete analysis of Coach

Holiday Sales Will Remain Focus

With the important holiday season falling in the last quarter, Q2 results hold special importance for Coach. Earlier we wrote how Coach was immaculate in its holiday season preparation. (See: Post Earnings, Coach Readies for the Holidays to Support Stock’s Surge)


Though luxury retailers have had a good holiday season, Coach’s performance in December is crucial, as November sales were encouraging across the board due to the Thanksgiving weekend. We will also be looking for updates on the company’s China business as the Chinese New Year nears and luxury spending in China is expected to see steep growth.

Watching for Coach’s Strategy Amid Weak Macroeconomic Conditions in U.S. and Europe

We will be particularly interested in Coach’s outlook for Europe as tough macroeconomic conditions continue to haunt major European economies. We will also follow Coach’s strategy in the U.S., as the company’s largest market has started showing signs of economic improvement, though very slow. Another point to note will be how Coach strikes a balance between factory stores and full-priced stores in the domestic market, as this will eventually decide its confidence in the U.S. apparel market.

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Notes:
  1. Coach to announce Q2 fiscal 12 earnings, Source: Coach IR [↩]