Michael Kors Holdings Ltd (KORS), Coach, Inc. (COH): This Company Works on Expanding its Product Line

The Juicy Couture brand experienced significantly lower gross margins than in 2012, and the brand’s issues are being worked on under the direction of a new CEO. The Kate Spade brand was a top performer with a 34% increase in net sales, which totaled $141 million, and a 22% increase in direct-to-consumer comparable sales. Prospects are high for the newly launched Kate Spade Saturday product line and the brand is also expanding in Asia.

My Foolish conclusion

Coach, Inc. (NYSE:COH)’s future seems dependent on whether it can expand beyond its core handbag and accessories business, which is not performing well at the moment in its core North American market. The company also seems focused on moving its inventory through its discounted outlet stores rather than its regular price locations, a move that could hurt the brand’s image over the long term. Throughout 2014, Coach plans to open two traditional retail stores and close 16, while the company plans to open 14 outlet locations. Michael Kors Holdings Ltd (NYSE:KORS)’ shares, trading at 21.55 times 2015 earnings and with a PEG ratio of 0.93, seem to be the best buy of the group and has a strong product line that Coach may be seeking to emulate.

Eileen Rojas has no position in any stocks mentioned. The Motley Fool recommends Coach. The Motley Fool owns shares of Coach.

The article Coach Works on Expanding its Product Line originally appeared on Fool.com.

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