Coach Q4 profit slides but matches Street expectations
New York City Luxury handbag and accessories maker Coach on Tuesday reported a 32% drop in fiscal fourth-quarter profit on nearly flat sales amid the weak retail environment. For the quarter ended June 27, net income tumbled to $145.79 million from $213.52 million a year ago. The results were in line with analyst expectations.
Sales for the quarter dropped marginally to $777.74 million from $781.50 million in the prior-year quarter. Direct-to-consumer sales of Coach rose 3% to $683 million. North American comparable-store sales declined 6.1% from the prior year.
Lew Frankfort, CEO said, “We maintained the integrity of our full price proposition and did not go on sale in retail stores this fiscal year. This also allowed us to generate robust sales in our factory channel, where we were able to drive business by utilizing appropriate marketing levers.”
In a Reuters report, Frankfort said the economy is still clearly in a severe recession and consumers will be extremely cautious for the rest of the year. But he said he is beginning to see signs of improvement.
“It’s early days for our new quarter, but four weeks into it, we definitely see a sequential improvement in traffic,” he said in a telephone interview, according to the report.
Franford added that Coach will outperform other brands as it ramps up its new Poppy line of less expensive bags, which has been very well received, according to the company. The average price of a Poppy bag is $260, about 20% less than the usual Coach purse.
Coach will open Poppy stores in Japan and possibly the United States at some point, Frankfort said on a conference call, adding it is also developing a few stand-alone men’s shops in Japan.
The company said it will open 20 new North American retail stores in fiscal 2010 and accelerate store openings in China, where sales have been strong. It said it now expects to open about 15 stores in China, up from about 10 previously targeted. Over the next five years, it expects to open at least 50 stores in China.
Target rides wave of new partnership
MINNEAPOLIS Target announced a new partnership with 16-year-old professional surfer Carissa Moore.
“I love Target and I am honored to make my relationship with them official,” said Carissa. “Target opened two stores in Hawaii this year and it’s been great to have one so close to home. I’m really excited and am looking forward to working together. I know we’ll have a lot of fun.”
An 11 time NSSA National Champion, Carissa was born and raised in Honolulu, HI. She is currently tied for first place in the Women’s World Qualifying Series.
“Carissa is a phenomenal athlete as well as a terrific ambassador of women’s surfing. We are excited about the partnership and to be supporting her in ways that will assist her continued progression,” Troy Michels of Target lifestyle marketing, said of the announcement.
Target has been a long-time partner with many athletes that appeal to teens and young adults. Most notably, the company has worked with snowboarder Shaun White on a number of lines for boys and young men.
Ebay rewards good customer service
SAN JOSE, Calif. Ebay announced that its sellers with the best customer service ratings will be promoted for the first time ever with a special Ebay Top-Rated Seller badge, receive discounts of 20% on their final value fees and be elevated in search.
“For buyers, the new Ebay Top-Rated Seller status makes it easy to find the highest quality sellers on eBay based on the feedback of other buyers,” said Lorrie Norrington, president of eBay Marketplaces. “For sellers, the Top-Rated Seller status recognizes and rewards their commitment to consistently delivering the highest level of customer satisfaction.”
The company said it expects to immediately qualify 150,000 Ebay Top-Rated Sellers in the U.S. when the program goes live in October, and will launch at the same time in the United Kingdom and Germany. These highest-rated sellers will display an EBay Top-Rated Seller badge on the “view item page” that displays their listing. Going forward, any seller with as few as 100 transactions a year and $3,000 annual in sales volume can qualify based on buyer feedback.