Victor Luis, Chief Executive Officer of Coach said, “We are pleased with our third quarter performance which was consistent with our plan and annual guidance despite the increased negative impact of foreign exchange on our top-line results. As was the case in our second quarter, we drove sequential improvement in our North America bricks and mortar business while further reducing our eOutlet events. In addition, our international businesses posted moderate growth on a constant currency basis, highlighted by double-digit increases in Europe and China. Importantly, our brand transformation remains on track across the three key brand pillars, as we continued to open and renovate modern luxury concept stores globally, successfully introduced Stuart Vevers’s product in our outlet channel and had an overwhelmingly positive reception to our third New York Fashion Week presentation.”

Third fiscal quarter sales results in each of Coach’s segments were as follows:

  • Total North American sales decreased 24% to $493 million from $648 million last year, as expected. North American direct sales declined 23% for the quarter with comparable store sales down 23% including the impact of reduced eOutlet events, which pressured total comparable stores sales by about 11 percentage points. 
  • International sales decreased 3% to $428 million from $441 million last year. On a constant currency basis, International sales grew 4%. Sales in China rose 10% on a constant currency basis and 8% in dollars with positive comparable store sales and slower distribution growth. In Japan, sales declined 11% on a constant currency basis, better than expected given last year’s double-digit gain prior to the April 1st tax increase. Dollar sales in Japan were 23% below the prior year, reflecting the weaker yen. Constant currency sales for the remaining directly operated businesses in Asia grew modestly while Europe remained strong, growing at a double digit pace. At POS, sales in international wholesale locations were essentially flat with prior year while shipments rose significantly due to timing.