Coach has reported a 17.4% increase in profits and 4% increase in sales in Q2.
According to an article on Fortune, Coach has reported a 17.4% increase in profits and a 4% increase in sales in the second fiscal quarter 2016. The brand also reported a 3% increase in sales in North America.
Sales in North America increased by 3% to $744 million. The brand also had a 5% increase in direct sales and a 4% increase in same store sales. The brand’s international sales increased by 3% to $488 million.
The company reported a 17.4 % increase in profits to $199.7 million or 71 cents a share. That’s compared to $170.1 million or 61 cents a share a year earlier. Revenue increased by 3.8% to $1.32 billion. This is also the third quarter in a row the brand has reported a sales increase.
Sales at luxury shoe brand Stuart Weitzman, which coach acquired last year, increased by 26% to $188 million compared to $94 million last year. The brand’s profits increased by 26% to $76 million compared to last year.
Coach only just started reporting a sales and profits increase about a year ago. The brand’s sales had decreased by over 20% in several quarters because of too many discounts and promotions. The brand’s products were always on sale both in Coach boutiques and department stores like Macy’s.
In Q2 2016, however, which included the holiday season, handbags that cost $400 or more accounted for 50% of sales. That’s an increase of 20% compared to a year earlier.
The brand was able to increase profits by selling more expensive handbags. About a year ago the brand only sold bags that cost up to $800 or so. Now the brand sells bags that cost over $1,000.
Coach also increased profits by lowering the amount of inventory sold at overly promotional department stores. The brand will instead increase the amount of bags sold at luxury stores or stores the brand views as a “retail and marketing investment.”
Given the company’s plans, the brand’s sales and profits will probably increase more this year.
So, what do you think? Will Coach’s sales and profits increase? Let me know in the comments below. Also, don’t forget to subscribe to get new posts sent directly to your inbox and follow me on Facebook, Instagram, and Snapchat.
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