Net sales growth for Coach in second quarter

Worldwide
Published:  01 February, 2017

American leather goods company Coach has posted net sales of US$1.32 billion for the second fiscal quarter, an increase of 4% over the prior year on a reported basis.

According to Coach, its positive performance in the second fiscal quarter is due to the Company’s strategic decision to elevate the Coach brand’s positioning in the North American wholesale channel through a reduction in promotional events, despite some retail closures negatively impacting sales growth by approximately 100 basis points in the period.

Net sales for the Coach brand totalled US$1.20 billion for the second fiscal quarter, an increase of approximately 2% on a reported and constant currency basis. In North America, the Coach brand sales increased 2% on both a reported and constant currency basis to US$744 million versus US$731 million in the previous year. Direct sales rose 5% for the quarter. Total physical store sales rose approximately 4%. “As planned”, sales at department stores declined approximately 30% on both a POS and net sales basis.

Internationally, sales for the Coach brand increased 3% to US$448 million on a reported basis from US$437 million in the prior year, and 1% on a constant currency basis. Greater China sales were said to be approximately even with prior year in dollars and increased 6% on a constant currency basis. Hong Kong and Macau are also reported to have experienced a significant improvement in the quarter from previous trends. Sales in Japan increased 9% in dollars and -2% in constant currency, impacted by a decline in Chinese tourist spend, lapping last year’s dramatic increase, according to the Company. Europe is reported to have remained strong, growing at a double-digit rate in both total and comparable store sales.

Net sales for the Stuart Weitzman footwear brand totalled US$118 million for the second fiscal quarter against US$94 million in the same period of the prior year, an increase of 26% “driven by strong growth in the directly operated channels and positively impacted by a wholesale shipment timing shift from the first quarter”. Gross profit totalled US$76 million, an increase of 26% versus prior year, on a reported and non-GAAP basis. Gross margin for the quarter was even with prior year at 64.3% on a reported basis. On a non-GAAP basis, gross margin was 64.4% compared with 64.3% a year ago.

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