Boston, MA 10/23/2013 (wallstreetpr) – Coach, Inc. (NYSE:COH) declared its 1Q14 on October 22, 2013. Revenues fell to $1.15 billion with net income of $217.9 million. The earnings translate to $0.77 per share. These were slightly below the analysts’ expectations. Revenues were hit by 1% drop in sales in North America, they now account for 68% of the total revenues. Increased competition in this market saw the company lose customers in the 20-35 age-groups. The company increased sales in clothing and footwear lines, but with low margins, the revenues and profit margins in these lines were not sufficient to offset losses in its main handbags segment. International sales also decreased to $365 million from $367 million QoQ. The revenues were hit due to stronger dollar, on a constant currency basis, international sales increased by 9%.
North America: Revenues declined to $778 million for the quarter from $784 million for the same period last year with comparable store sales also declining by 6.8%. The company is expecting the trend to continue for the rest of the year. The company opened five stores in North America while it closed down one. Coach has 350 full price and 198 factory outlets spread over 150 malls in North America.
International Sales: Coach saw excellent growth in emerging markets. Sales in China were up by 35% and comparable store sales up by double-digit. In Japan, sales declined by 2% on constant currency basis; the weaker yen saw sales in dollar terms decrease by 22%. The company also acquired its European joint venture in this quarter. Distribution was strengthened in Asia with the company now operating 196 in 30 malls in Japan, 132 stores in 49 cities of China, 48 in Korea, 27 in Taiwan, 10 in Malaysia, and 9 in Singapore.
Investors were spooked by the talk of expected decrease in North America sales and the stock lost 7.53% of its value on October 22, closing at $50.10 per share.
