Tuesday, October 23, 2007

Coach Warns of Low Traffic

From the Street.com

Same-store sales, or sales at stores open at least a year, jumped 19.3% in the U.S. In Japan, where Coach has a significant presence, same-store sales rose at a low-single-digit rate.

U.S. retail stores recorded a 10.8% rise in same-store sales, while outlet stores saw a 27.3% surge.

For the key holiday period, however, Coach forecast a same-store sales rise in the low-single-digits for its North American retail sales, though it expects its outlet stores will generate growth at least in the mid-teens.

"While we're well positioned for the holiday season, we are, however, concerned with recent traffic trends in our North American retail stores, reflecting the retail environment and the unusually difficult comparisons with last year," said Chairman and CEO Lew Frankfort. "Thus, we believe it's prudent to be more conservative in our comparable-store sales guidance for the balance of the fiscal year."

Coach had a great quarter with strong sales growth. However, they warned about the holiday season. Remember what I posted below about retail stores managing investor's expectations about the holiday season; this could be another move in that area. However, there are pressures on the consumer this year that weren't there last years -- a very weak housing market and higher gas prices.