Piper Jaffray's Erinn Murphy Upgrades Coach To Overweight

Analyst Erinn Murphy mentioned that quarter-to-date checks suggest that Coach is executing on plan.

“We believe we are seeing the sequential improvement in comp from both a new customer that is coming to the brand from categories like footwear and RTW as well as a lapsed customer that is responding well to Stuart Vever's use of the iconic Coach brand elements including glovetanned leather,” Murphy stated.

Related Link: UPDATE: Piper Jaffray's Murphy On Coach Brand Is Showing Signs Of Near-Term Improvement

Conversion is likely to have continued to improve, driven by tighter promotions year-on-year, while collections like Swagger are being received well across the globe.

Murphy believes there are various catalysts that would drive comps to turn positive by FQ4, such as increased penetration of the under $300 handbags, store refreshes prior to the holiday season and increased penetration of the Stuart Vever line at outlets.

Meetings with the CEO and management team during the quarter have raised Murphy’s confidence in the “strategic direction of Coach's turnaround.”

Image Credit: By Raysonho @ Open Grid Scheduler / Grid Engine (Own work) [CC0], via Wikimedia Commons