Coach Continues To Be Economic Victim (COH)

Douglas A. McIntyre

Coach_logoIt has been long-removed since the belief that Coach, Inc. (NYSE: COH) was going to be immune from the consumer spending squeeze.  Tonight we are seeing this again with a forecast of lower earnings and lower sales.

The handbag and accessories maker lowered its Q4 quarterly guidance to $0.67 EPS, which is under estimates and under its priorguidance of $0.77 EPS.  It is also under the $0.69 reported in theprior year’s comparable period.  Sales were down 2% to $960 million andwere under prior targets of roughly $1.05 billion.

The same-store sales figures are pretty atrocious as well.  Those fellby 13% for the Q4 period in North America.  It is of little surprisethat Coach has decided not to offer guidance.

Shares closed down 3% at $20.90 in regular trading, and fell about 4% more to $19.98 in the after-hours session.  The 52-weektrading range is $13.19 to $37.64.  Two years ago this stock was north of$50.00.

This was a great success story for some time.  You just have towonder now if the company can retain its top status when the economyeventually recovers. Even at the close, Coach still has a market cap north of $6 billion.

Jon C. Ogg
January 8, 2009