Oct 20, 2009
Coach posts stronger-than-expected results
Oct 20, 2009
CHICAGO, Oct 20 (Reuters) - U.S. leather goods company Coach Inc (COH.N) reported a higher-than-expected quarterly profit on Tuesday 20 October, helped by demand for its new, less-expensive Poppy line.
The maker of handbags, wallets, shoes, jewelry and other accessories said net income was $140.8 million, or 44 cents a share, in the first quarter ended on Sept. 26, compared with $145.8 million, or 44 cents a share, a year earlier.
Analysts on average were expecting 39 cents a share, according to Thomson Reuters I/B/E/S.
Sales rose 1.2 percent to $761.4 million, above the $753.8 million analysts had expected.
Sales at stores open at least a year, or same-store sales, fell 1 percent in North America, an improvement from the previous quarter when same store sales fell 6.1 percent.
Coach said its new Poppy line, which appeals to younger women with its bright colors and lower prices, helped increase store traffic from the previous quarter.
The average price of a Poppy bag is $260, about 20 percent less than the usual Coach purse. The line's introduction is part of a plan by Coach to reduce overall prices by 10 to 15 percent and appeal to more cost-conscious shoppers.
Coach is also seeing rapid growth in China, and plans to open its first mainland China flagship store in Spring 2010 in Shanghai. It also expects to open an Asian distribution center in Shanghai before the end of the fiscal year to better manage growth in the region. (Reporting by Ben Klayman; Editing by Lisa Von Ahn and Derek Caney)
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