US: Coach "disappointed" with Q2 profit rise
- Q2 profit climbed 1.7% to $353m
- Sales up 4% to $1.50bn
- CEO "disappointed" with performance in North America
The New-York based retailer was it was "disappointed" with its performance in North America
Footwear, handbags and accessories retailer Coach Inc has said it is "disappointed" with its second-quarter results after a tough holiday season weighed on sales in North America.
Net income climbed 1.7% to US$353m for the quarter to 29 December against $347m the year before.
Sales rose 4% to $1.50bn, compared to $1.45bn the same period the prior year. On a constant currency basis sales were up 5%.
The New-York based retailer said gross margin remained strong at 72.2%, flat with the prior year.
CEO and chairman Lew Frankfort said: "During the holiday quarter we drove modest growth and continued to gain overall traction on our key strategies. We posted strong international results, leveraged the men's opportunity globally and strengthened our digital capabilities.
"However, we were disappointed by our performance in North America, where the holiday season proved challenging.
"Most broadly, the consumer was impacted by a muted macroeconomic environment, while in the women's handbag category competition intensified and promotional activity increased. Importantly, we maintained our pricing strategies despite the retail climate, protecting our brand proposition."
International growth was led by China, which is on track to generate at least $400m in sales this year.
For the half year, net income reached $574m, up 2% on $562m the year before. Net sales increased 7% to $2.67bn against $2.50bn the prior year.
"Looking ahead, we're confident in our ability to address the near-term challenges in North America while leveraging the global opportunity, as we continue to evolve the Coach brand," Frankfort added.
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