Quarterly sales at existing stores in North America rose for the first time in three years. And as Fred Katayama reports, Coach's profit jumped seven-fold.
More signs of a turnaround at Coach. The handbag maker's quarterly sales at existing stores in North America rose for the first time in three years, up 2 percent. Its acquisition of the shoe brand, Stuart Weitzman, help pump up overall sales 15 percent, as did double digit sales growth in Greater China and Europe. Profit rose seven-fold. Coach has been offering fewer discounts to spruce up its brand in a highly promotional environment that has hit rival Kate Spade hard. It has also been renovating its stores and hiring famous designers in a bid to boost sales. Mizuho Securities USA analyst Betty Chen said, "It's definitely encouraging to see sequential improvement every quarter culminating in a positive 2 percent. The question now is, can they continue that trend in a tougher fiscal 2017?" Coach was upbeat for that year ending next June, forecasting double-digit growth in income. While Coach saw stronger sales at its own stores, it has reduced the number of department stores it sells to, and that cut sharply into sales of its goods there. Its shares, which are up nearly 27 percent this year, fell in early trading.