NEW YORK, United States — Coach Inc., the largest U.S. luxury handbag maker, said fiscal fourth-quarter profit fell 12 percent as discounts and weak handbag sales hurt revenue in North America.
Net income in the three months ended June 29 slid to $221.3 million, or 78 cents a share, from $251.4 million, or 86 cents, a year earlier, New York-based Coach said today in a statement. Excluding some items, profit was 89 cents a share, matching the average of 31 analysts’ estimates compiled by Bloomberg.
Coach’s sales were hurt by 50 percent discounts on the new shoe collection it unveiled in March as part of a plan to become a lifestyle brand competing with Michael Kors Holdings Ltd., Fifth & Pacific Cos.’ Kate Spade and Tory Burch LLC. Coach also offered steeper promotions at its outlet stores, Michael Binetti, an analyst at UBS AG, wrote in a report.
Revenue increased 5.8 percent to $1.22 billion, trailing the $1.24 billion average of analysts’ estimates
Coach dropped 2.2 percent to $57.85 in New York yesterday. The shares advanced 4.2 percent this year through yesterday, compared with an 18 percent gain in the Standard & Poor’s 500 Index.
Sales at stores open at least a year in North America sank 1.7 percent in the quarter as handbag sales disappointed. Analysts on average estimated Coach’s North American same-store sales would increase 0.6 percent, according to Retail Metrics LLC, a Swampscott, Massachusetts-based research firm.
By: Cotten Timberlake; Editors: Kevin Orland, James Callan