Coach‘s stock took a nosedive after the company released its fourth quarter and full year (year ended June 2017) earnings. Mixed fourth quarter results, coupled with disappointing FY 2018 guidance, led the stock to drop by around 15%. Highlights of the quarter included double-digit growth in net income, solid international sales, particularly in China and Europe, and improving comps in the domestic market. In a bid to boost its luxury image, the company has pulled back its level of merchandise from department stores and cut back on its discounting. These factors pressured the company’s sales, but improved comparable sales and increased e-commerce revenues in the U.S. helped to offset it. Excluding the additional week in Q4 2016, the company’s revenues would have actually increased by 6% as reported, and 7% in constant currency.

Coach Brand Transformation And Elevation
  • Coach has been working hard to transform its brand in recent years, in the wake of market share loss to Michael Kors and other rivals, who employed a similar strategy of selling luxury products at affordable prices.
  • The company hired a new designer, Stuart Vevers, who introduced higher end products, and moved to remodel stores into a new luxury format, ending the year with just over 720 store renovations.
  • The retailer has also recruited Selena Gomez to be its new face in order to…