NEW YORK — Demand for Coach Inc.’s on-trend leather accessories fed holiday sales and is contributing to the company’s optimistic outlook on spring.
Citing a 27 percent rise in U.S. sales and a 35 percent sales jump in Japan, the luxury handbag retailer Wednesday lifted its fiscal, second-quarter sales and earnings projections to above analysts’ consensus.
The New York-based company now sees earnings in the quarter ended Jan. 1 of at least 67 cents a share versus a prior forecast of 64 cents. The Wall Street consensus is 66 cents.
Total sales in the quarter were $532 million, up 29.1 percent from $412 million in the prior year. That compares with previous guidance of $505 million, and analysts’ forecast for $515.4 million.
Coach’s complete results for the holiday quarter will be released on Jan. 25.
“Our performance speaks to the vitality of the brand, as we continue to grow market share in a rapidly expanding U.S. premium accessories category,” said Lew Frankfort, chairman and chief executive officer of Coach, in a statement. The company also cited improved gross margins and expense management for the profit guidance increase.
Direct-to-consumer sales in the second quarter came in at $307 million, up 29.5 percent from $237 million last year. Indirect sales were up 29.3 percent to $225 million, for which the company cited strong sales in Japan, U.S. department stores and international wholesale.
Same-store sales in the U.S. jumped 16.5 percent. Retail store sales rose 13.9 percent, while factory store sales gained 20.7 percent.
“Coach is benefiting from its status brand positioning while at the same time being accessible in its price points for the handbag and small leather goods category with little competition,” wrote Piper Jaffray analyst Neely Tamminga in a Wednesday report.
Coach noted in its statement that U.S. comparable retail stores are 55 percent more productive than they were three years ago.
In Japan, along with the 35 percent increase in sales in constant currencies, same-store sales increased in the high-single digits. That was despite what Frankfort called “lackluster category sales.”
“Our results underscore the success of our distribution strategy in Japan, notably the acceleration of flagship openings and the expansions of existing shops,” Frankfort said.
In yet another fashion show shuffle, @elleryland is moving its show in sync with the Paris couture calendar — though the brand is still keeping one foot on the city’s ready-to-wear schedule. Their runway show in January will coincide with the launch of a new strategy: designing two main collections each year instead of four, which will then be released in four drops. “As we all know, the system needs to change. We need to show sooner to give time back to artisans and designers to do what they do best — create,” said founder Kym Ellery. #wwdnews #wwdfashion (📷: @kukukuba)
@maxmara’s classic 101801 coat was the cornerstone of its pre-fall 2018 collection. The design team expanded the traditional double-breasted, kimono-sleeved style into a trapeze coat, lean belted styles and a peacoat and presented them in monochromatic looks – like the camel one pictured here. #wwdfashion #prefall18 (📷: George Chinsee)
The @cfda has shifted the dates of #NYFW, with Men’s showing on February 5 through February 7, and Women’s will directly follow, running from February 8 through 14. The preliminary schedule will be released on the CFDA’s web site in the next few days, but Mark Beckham, VP of marketing for the CFDA, revealed that @rafsimons will be back to close the men’s-specific part of the week with a show on February 7 #wwdfashion (📷: Kelly Taub)
@ferragamo is introducing a new space dedicated to the development of women’s and men’s leather good samples. The laboratory, which is created eco-friendly materials and designed to reduce the environmental impact of the manufacturing processes, will allow the company to expand its accessories offering through traditional artisanal approaches. #wwdfashion (📷: @aitorrosasphoto)
How does a “regular, degular, schmegular” girl from the Bronx, N.Y., become a Grammy-nominated artist with a certified platinum record in less than a year? Call it the @iamcardib come up. The 25-year-old has become a musical sensation, and the fashion world is taking note. “If I could describe her style I would say drama. She’s really into the dramatics,” says Cardi B’s stylist @kollincarter. See how Carter styles her bold and out there looks with the link in bio. #wwdfashion
“There is no formula. There is no guideline. I can watch Ted Talks all day, but there is no one who can advise me on exactly what it is I should be doing,” said @ronniefieg, CEO of @kith, in an interview with WWD’s @ariahughes at the brand’s new SoHo office in Manhattan. Head to WWD.com to see how Fieg went from hanging out in shoe stockrooms at 13 to building his own business. #wwdfashion (📷: @weston.wells)
@fearofgod and @maxfieldla have teamed up on a pop-up installation. The store, located in the gallery space across from Maxfield’s Melrose Ave location, is the site of the brand’s House of God pop-up in which Fear of God founder @jerrylorenzo has created a church-inspired installation. A dozen vintage church pews sit in front of an LED screen playing 90s gospel singers in an effort to re-create an environment akin to a Southern Baptist Church, Lorenzo explained. Read more about the pop-up on WWD.com #wwdfashion (📷: Jennifer Johnson)
Known for his sleek, sophisticated American glamour, Norman Norell is the subject of an upcoming exhibition at @fitnyc. “Norell: Dean of American Fashion,” which runs from February 9 through April 14, will feature approximately 100 ensembles and accessories. His best work is exemplified by the designer’s glittering “mermaid” gowns frosted with thousands of hand-sewn sequins – like the one pictured. (📷: William Helburn) #wwdfashion
For pre-fall 2018, @balmain didn’t let go of the glitz. A crystal embroidered baseball jacket priced at around $40,000 hangs in the “couture” section of the brand’s first men’s pre-collection. Sporting the words “Balmain Army” across the back, the item took around two months to make. “When it was completed, it was like Christmas, it was like, ‘It’s done, it’s exactly what I wanted,’” said Balmain’s creative director @olivier_rousteing during a tour of the collection in a Paris showroom on Monday. #wwdfashion