Fine accessory company, Coach, Inc. (COH) reported that it will now expand its footwear options for consumers, but analysts remain skeptical..
As competition has grown for Coach, the company is now looking to expand its shoe offers. Although increasing its product line in the shoe market could help the company expand into other markets, Coach will be faced with a great amount of risk.
Analysts now worry that the expansion may hurt Coach’s profits as growth in the shoe market is much slower than with handbags. The new market will present several new challenges for Coach.
While handbags are offered in one size, shoes must be produced to fit many sizes. Coach will now run the risk of miscalculating demand for specific sizes.
The new shoes will be introduced in the second half of 2013, and will likely be in department stores. Coach also said that it considering men shoes as well. Coach’s CEO Victor Luis noted, “we see ourselves growing a very substantial footwear business.”
Looking ahead, the company said that it expects to see footwear revenue to reach $250 million for the fiscal year that is ending in June.
Coach shares were up 49 cents, or 0.84% during Monday morning trading. The stock is up 6% YTD.
The Bottom Line
Shares of Coach, Inc. (COH) have a 2.31% yield, based on Friday’s closing price of $58.52.
Coach, Inc. (COH) is not recommended at this time, holding a Dividend.com DARS™ Rating of 3.3 out of 5 stars.
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