Boston, MA 10/24/2013 (wallstreetpr) – One of the companies having a very rough time in the 2013 financial year is Coach, Inc. (NYSE:COH). One of the problems or one that analysts see becoming a major problem, is the company’s management reluctance to address the worst short-term results. One of the other major aspects that has been blamed for the company’s woes is the over dependence of the factory stores. Even though they pose as a good option for selling the company’s aged merchandise at higher price, and played a pivotal role in the company’s good run in 2011, the company has overly relied on the factory stores rather than direct sales.
The company has also faced stiff competition from companies like Michael Kors Holdings Ltd (NYSE:KORS). The competitors have eaten into COH’s market share especially that between the ages 20-35. COH has retaliated by selling more clothes and footwear, but analysts predict the price margins in these areas are not enough to cover up for the loss caused by handbags and also they do not attract price tags equivalent to those of handbags.
In the company’s Q1.2014 financial results, the company posted a 6.8% fall in the North American same-store sales in the 3 months ending September 28. The total sales also fell by 1% to $1.15 billion. The North American sales which also account for the company’s 68% of total sales plunged down 1%. Net income for the company slipped 1.6% to $217.9 million which is an equivalent of 77 cents per share.
After the announcing of the results, the company’s shares plunged by a 9%. Despite the disappointing performance the worst is yet to come. According to the company’s CEO Jane Nielson, the North American same-store sales would plunge deeper by single digits for the rest of the financial year ending June 2014.
