Coach Profit Trails Estimates as Mall Visits Sink During Holiday

Coach Inc. (COH), the largest U.S. luxury handbag maker, reported fiscal second-quarter profit that trailed analysts estimates after mall visits dropped during the holiday season and other chains promoted goods.

Net income in the three months ended Dec. 28 dropped to $297.4 million, or $1.06 a share, from $352.8 million, or $1.23, a year earlier, New York-based Coach said today in a statement. The average of 30 analysts’ estimates compiled by Bloomberg was $1.11.

Sales at North American stores open at least a year sank 14 percent as consumers curtailed mall visits and gravitated to deals at more promotional chains like Macy’s Inc. and brands like Michael Kors Holdings Ltd. (KORS) Coach itself had warned in November that its customers planned to spend 4 percent less overall during the important year-end season.

Analysts surveyed by Retail Metrics Inc. estimated on average a 6.8 percent decline for North American comparable sales at Coach.

Coach fell 7.7 percent to $48.50 at 7:03 a.m. in early trading. The shares advanced 1.1 percent last year, compared with a 30 percent jump for the Standard & Poor’s 500 Index.

Revenue fell 5.6 percent to $1.42 billion, trailing the $1.48 billion average estimate.

Photographer: Victor J. Blue/Bloomberg

Customers browse at a Coach Inc. store in New York. Close

Customers browse at a Coach Inc. store in New York.

Close
Open
Photographer: Victor J. Blue/Bloomberg

Customers browse at a Coach Inc. store in New York.

To contact the reporters on this story: Cotten Timberlake in Washington at ctimberlake@bloomberg.net

To contact the editor responsible for this story: Robin Ajello at rajello@bloomberg.net

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.