The First Quarter Profits Of Light Luxury Group Coach Achieved Two Digit Growth.

2016/2017 first quarter of the year, the American light luxury group Coach Driven by the adjustment of brand positioning and optimization of commodity quality strategy, the first quarter profit achieved a two digit growth.

In the third quarter of October 1st, some of the financial data of the Coach group were as follows:

Net profit was $117 million (42 cents per diluted share), up 96 million 400 thousand from the same period last year (35 cents per diluted share), an increase of 21.8%.

Net sales of $1 billion 40 million, an increase of 0.7% over the previous year, lower than analysts estimate of $1 billion 70 million.

Gross profit was $715 million, an increase of 3% over the same period, and gross margin of 68.9%.

Operating profit was $166 million, an increase of 17% over the same period last year.

Sales, management and office expenses (SG&A) were $549 million, down 1% from a year ago.

Coach brand The third quarter's performance is as follows:

North American sales fell 3% to 545 million US dollars over the same period last year. However, sales of specialty stores increased by 4% over the same period last year. Because of the company's strategy to reduce sales of department stores, Coach Department store The company's sales fell by 30% over the same period last year.

Although sales of eOutlet flash shopping continued to decline, comparable store sales in North America rose by 2% over the same period.

Coach international sales grew 7% to $395 million.

Sales in the Greater China region were basically the same as in the same period last year, with the weakness of Hongkong and Macao offset the two digit growth of same store sales in mainland China.

Japan's sales grew by 11% over the same period last year, a decline of 7% compared with the same period last year. The decline in the consumption of Chinese tourists has had a certain impact on the market.

In the conference call with analysts, Coach's CEO Victor Luis said: "we are still building a new brand image of Coach by improving the quality of products, improving the store environment and implementing emotional marketing. At the same time, we are adjusting our brand positioning and streamlining the sales channels of department stores in North America. "

Recently, Coach has been reducing the frequency of promotional activities and reducing the size of poor sales channels, such as e-outlet flash shopping. The group plans to close the 250's weaker department stores before next spring. Luis said that reducing discount promotions can help to maintain consumers' trust in brands and reduce their confusion over sales of different channels.

Coach Andre Cohen, President of North American Marketing and global marketing, said in an interview that the company's goal is to work with department stores to reduce the frequency of discount promotions and better brand image. The drop in sales this quarter was mainly due to the strategy of closing some department stores' sales outlets. In the future, we will mainly develop sales outlets for department stores which have great potential for sale. At present, we have 6 stores in Neiman Marcus's department stores and join their e-commerce websites.

At the same time, the company is also adjusting the discount business. The products sold in this part of the business are mainly the surplus goods in the full price store, and there are also some products specially designed for this channel.

CEO said that the mainland is still an important potential market for the Coach group. He said: "we believe that China has great potential for growth. Besides China, other markets in Southeast Asia, such as Thailand, Indonesia and Australia, are also very potential. " Luis also mentioned that business in Southeast Asia and Europe is still at the "initial stage of development".

The third quarter of the Coach shoe brand Stuart Weitzman, which was purchased by the group, is as follows:

Sales amounted to $88 million, a slight increase compared to $87 million in the same period last year.

Gross profit 51 million U.S. dollars, an increase of 3% over the same period last year.

Operating profit was $5 million, down 37.5% from 8 million US dollars in the same period last year.

The group says that the popularity of Stuart Weitzman in the world and the popularity of the millennial generation are increasing.

Despite rumors about mergers and acquisitions, CEO said the Coach group did not seek to sell or acquire targets. But if there is an excellent brand with potential, global supply chain and excellent management team, Coach may choose to buy it.

The Coach Group expects total sales in the 2016/2017 fiscal year to grow to low single figures. Net profit and diluted earnings per share are expected to achieve two digit growth.