NEW YORK (AP) - Luxury handbag maker Coach Inc. reports earnings for its third quarter on Tuesday. The following is a summary of key developments and analyst opinion related to the period.
OVERVIEW: Luxury retailers have been among the hardest hit as consumers cut spending during the recession. Last quarter, Coach said it would lower its prices 10 percent to 15 percent and offer more handbags under $300 in an effort to combat the consumer spending drop-off. Price cuts have begun and will be completed over the course of the year.
BY THE NUMBERS: Analysts polled by Thomson Reuters predict a profit of 36 cents per share on revenue of $709.5 million. A year ago, Coach reported third-quarter profit of 46 cents per share on revenue of $744.5 million.
ANALYST TAKE: Stifel Nicolaus analyst David Schick, who rates the company’s stock a buy, estimated in a note to investors that same-store sales, or sales in stores open at least one year, fell 13 percent during the quarter.
“Some sequential improvement is likely in the factory stores as Coach has moved full-price inventory to the factory channel in order to clear (it),” he wrote.
He said he expects same-store sales to be hit by declining consumer traffic and lower average selling prices.
WHATS AHEAD: Analysts will be watching for any comment on inventory levels and how consumers are responding to lower price points.
STOCK PERFORMANCE: Shares fell 14 percent during the quarter beginning Dec. 28, 2008.
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