Japan's Earthquake Crisis Will Affect Coach's Fourth Quarter Earnings

　　 Cox Chi (Coach) the company warns investors. Japan crisis This will continue to affect the results of the season, bringing shadow to high-end handbag makers over the market expected sales and earnings reports.

Coach said Tuesday that sales in the third quarter increased by 14% to $950 million 700 thousand, thanks mainly to a 10.3 increase in the North American market and double-digit growth in the Chinese market. The company is fully developing the Asian market.

Coach is famous for its handbags. The company said Japan's March 11th earthquake and subsequent tsunamis. Nuclear crisis Still far-reaching.

18% of last year's Coach sales came from the Japanese market. The company expects to cut sales by 20 million US dollars in June 2nd, down 2% and earnings per share by 2 to 3 cents.

According to market expectations, this will account for about 5% cents of its fourth quarter profit of 64 cents.

But LewFrankfort, chief executive of Coach, says the worst is likely to be over.

"We can't see long-term damage," he said. In fact, our full price store has fully recovered.

Coach has 174 branches in Japan, of which seven are still operating.

Coach said sales in the third quarter ended April 2nd and sales of $2.5 were reduced by 20 million dollars, due to Japan's crisis.

In the past two years, Coach has positioned itself as a "popular luxury brand" because more and more consumers are Hermes High priced handbags are being transferred to the brand.

In the past few years, it has reduced the average selling price of handbags by about 10% by introducing new parity prices and increasing discount stores.

Coach shares fell 58 cents in the pre opening trading, down 1% to $56.50.

Focusing on the male market and the Chinese market

LewFrankfort said Japan was already a shrinking market before the crisis. In order to reduce the brand's dependence on the Japanese market, Coach will focus on the Chinese market and expand the series of masculine accessories.

Male products currently account for only about 3% of Coach sales. But LewFrankfort says the market is full of business opportunities.

Sales in the Chinese market increased by less than 5%, but the brand is expected to reach 10% by 2014. Coach plans to open ten new stores this season, increasing the number of Chinese stores to 55.

In the third quarter ending April 2nd, Coach recorded a net income of $186 million, or 62 cents per share, an increase of 18% over the same period last year of 157 million 600 thousand dollars or 50 cents per share.

That is higher than the previous 947 million 200 thousand US dollar sales volume of 60 cents per share.

The gross profit of Coach remained stable at 72.8%.

Coach raised dividends by 50% to 90 cents per share.