Coach’s profit fell 1.6% in the most recent quarter as the luxury U.S. handbag maker faces stiff competition from Michael Kors, Kate Spade and Tory Burch.
“We were disappointed by our overall performance in women’s handbags and accessories,” Coach Chairman and CEO Lewis Frankfort said in an earnings call Tuesday.
Net income dropped to $US217.9 million — or 77 cents per share — down from $US221.4 million a year earlier, in the company’s fiscal first quarter that ended Sept. 28, Coach said Tuesday.
A major driver behind the New York-based company’s falling profit was a 6.8% decline in sales at stores open at least a year in North America.
International sales also decreased slightly — about 0.5% — to $US365 million, the company said.
Looking ahead, Coach said it expects same-store sales in North America to continue falling at a high single-digit rate. Globally, the company expects to deliver flat-to-low single digit sales growth going forward.
“The retail environment remains challenging with soft mall traffic and volatility in consumer [spending],” Frankfort said.
He emphasised the success of Coach’s foray into men’s handbags and accessories, where he said sales were up 25 per cent globally in the most recent quarter.
“We remain bullish about the prospects of our global men’s business,” he said.
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