Tomahawk, WI 01/23/2014 (BasicsMedia) – Fewer companies excel at marketing men and women’s accessories and gifts as much as Coach, Inc. (NYSE:COH). The products that COH has grown increasingly popular for marketing include trendy handbags and accessories. While COH mainly operates in North America, it has spread its business to twenty-five other countries across the globe as well. The company’s market cap of $13.85 billion makes it one of the largest within this industry. The company’s stock has been on a decline, indicating that things are not going as well as its executives hoped.

Dwindling Sales in North America Operations

One of the main reasons behind the company’s struggles is the dwindling sales within the North America. The luxury brand’s sales have now dropped by as much as nine per cent, and this has led to lower revenues and profits, which are below what Wall Street analysts had predicted. Whereas Wall Street analysts had predicted that COH would gather revenue to the tune of $1.5 billion, the company only managed to raise $1.42 billion, which was lower than what it raised during the same period in 2012. The concern now is whether the current situation will change.

During the same period in 2012, COH’s reported $353 million in profits, which fell to $297 million in 2013. The $1.06 earnings per share were much lower than the $1.11 that analysts had predicted the company would report during its latest quarterly financial reports. The company’s executives say that the main reason behind the poor sales in North American was the lower traffic in its stores within this region. Although the company had good intentions in restricting access to its e-factory sales site, this also affected the sales within the same period, negatively.

Improved Sales in China Operations

While the company reported poor sales in North America, the situation was much better in China, where its sales rose by 25%. Consequently, the company indicates that it expects to meet its profit guideline within the China region, as it has always done in the past. This increase in its China operations has convinced analysts that the stock remains a buy, despite the few shortcomings and poor financials it has reported of late. Its debt levels are within reasonable margins, and the financial position solid enough to make COH more attractive to investors.

Other areas of strength that make Coach Inc attractive to investors include its ever-expanding profit margins, in addition to a significant return on equity, which its competition cannot match. The strengths in the areas mentioned herein, give COH a much better chance of survival and doing well, when measured against its perceived negatives, which mostly hinges on the poor growth in terms of net income. The net profit margin of COH, which stands at 18.93%, is much better compared tom the average within the industry.

It is worth pointing out that Coach Inc’s dwindling revenues have underperformed when compared with 18.4%, which is the average within the industry. Although the revenues have been dropping, the company’s bottom line is unaffected by this turn of events, as clearly demonstrated with its earnings per share, which have remained stable despite all these negative news.

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