(Reuters) - Coach Inc reported a higher-than-expected quarterly profit, as the handbag maker cut back on discounting its products in the United States.
Coach, which is trying to regain its premium-brand tag, has limited promotions on its products and pulled out of over 250 department stores.
Affordable luxury brands such as Coach and rival Michael Kors Holdings Inc have suffered after they expanded their retail presence too quickly and sold too heavily in outlet stores, diluting the exclusivity that once caused shoppers to line up for the next hot handbag.
Net income rose to $122.2 million, or 43 cents per share, in the quarter, from $112.5 million, or 40 cents per share, a year earlier.
Excluding items, the company earned 46 cents per share, beating analysts' estimate of 44 cents per share, according to Thomson Reuters I/B/E/S.
Coach is also battling low mall traffic as shoppers prefer to shop online or spend on big-ticket items such as cars.
Net sales fell 3.7 percent to $995.2 million in the third quarter ended April 1. Coach said its decision to cut back on discounts and shut underperforming stores in North America hit sales growth in the quarter by about 150 basis points. (Reporting by Jessica Kuruthukulangara in Bengaluru; Editing by Supriya Kurane)
May 2, 2017 at 07:20AM
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