Coach Q4 income tops expectations, but sales miss
New York — Coach Inc. reported Tuesday that net income for the quarter ended June 30 rose 24% to $251.4 million, from $202.5 million in the same period last year, topping Wall Street projections.
The company’s revenue in the quarter rose 12% to $1.16 billion, below analysts’ expectations of $1.2 billion. Slowing growth at the company’s factory-outlet stores impacted sales. Coach reinstated coupons at its factory stores late in the quarter amid increasing discounting among retailers.
Same-store sales at North American stores edged up 1.7%.
Coach’s full-year earnings climbed to $1.04 billion from $880.8 million in the previous year. Annual revenue rose 14% to $4.76 billion, from $4.16 billion.
Deloitte survey: Back-to-school shoppers ready to spend, driven by mobile
New York — A survey released Tuesday by Deloitte found that shoppers are prepped to spend on back-to-school items, and plan to use their mobile phones in the process.
Deloitte’s annual Back-to-School survey revealed that smartphones and online channels will guide bargain-hungry shoppers again this year. More than four in 10 (43%) of smartphone owners indicate they use their devices at least half the time for back-to-school shopping. Price-checking tops shoppers’ lists, cited by 62% of smartphone owners who will use their devices for back-to-school shopping. Nearly half (45%) of those smartphone shoppers will download discounts, coupons and sale information.
Among those who plan to visit social media sites during the back-to-school shopping season, 70% will seek promotions and nearly half (49%) will browse products. Social media users are also increasingly seeking and posting reviews. For example, four in 10 (39%) plan to seek out reviews, up from 28% last year, and the number who plan to post them doubled, from 9% in 2011 to 18% in 2012.
In terms of spending, the survey found that 88% of consumers plan to spend the same or more on back-to-school shopping this year, with higher prices a contributing factor for some families. Among the 34% who plan to spend more this year, nearly six in 10 (58%) cite higher prices as their reason for doing so, and 34% say their children need more expensive items than last year.
Despite these intentions, few intend to forego the tradition of setting a budget or looking for a sale. Nearly six in 10 (59%) consumers have a budget in mind for back-to-school shopping, and while 66% say they will shop for items on sale, fewer respondents feel stores are offering them more value for their money (36% in 2012 versus 47% in 2011).
"Consumers’ price sensitivity and bargain habits have been hard to break," said Alison Paul, vice chairman, Deloitte LLP, and retail & distribution sector leader. "Retailers will likely have to give consumers a good reason to fill the baskets in their stores, such as promotions that incentivize volume purchases or return trips. Retailers may need to quickly analyze their customer data and traffic to identify, replenish and market the popular items that can keep the momentum up throughout the season."
Additional back-to-school spending may come from students. Deloitte’s survey found that 68% of parents expect their school-aged children to spend $51 or more, an 18 percentage point increase over 2011.
Deloitte’s survey shows that traditional media and word of mouth will serve as the strongest influences over what consumers plan to buy this year. Television ranks as the No.1 source for parents to hear about the items they intend to purchase, cited by 41% of respondents, followed by family members (37%), newspapers (37%) and friends (36%).
J. Crew to make Asia debut in 2013
Hong Kong — A Tuesday report by Bloomberg said that J. Crew will open its first Asia store – in Hong Kong – as early as 2013. CEO Millard “Mickey” Drexler told the news service that the retailer is also seeking sites in Beijing and Shanghai.
“We feel that we’re ready to go international,” said Drexler. “Going international is a strong learning curve and it could distract us from building our business in the United States, but we feel that the time is right now.”
Drexler also said that the company will open a store in London next year, ahead of Hong Kong, according to the report. It presently doesn’t have any stores outside the United States and Canada.