Coach (NYSE:COH) has been breaking some rules, all right. While many retailers have been slashing prices to lure the last dregs of holiday shoppers this week, Coach has had such a successful time of it that it doesn't need to adhere to a holiday tradition most retailers don't relish: marked-down merchandise.
Maybe that's not good news to any post-Christmas shoppers looking to get some Coach handbags or accessories at a bargain price, but it's most certainly good news to Coach's long-term investors, who have seen the stock price increase about 50% over the course of the last year.
On Monday, Reuters reported that the leather and luxury accessories provider expects its sales to rise 25% for its second quarter, as compared to its original forecast for a 23% increase in sales. And it won't be participating in the margin-deteriorating price-cutting exercises that many retailers have been forced to resort to in order to move their holiday inventories.
Several Fools have been following the recent progress of Coach, including Seth Jayson, who recently asked if Coach was a Rule Breaker. Seth also recently discussed the idea that luxury retailers have got it good right now despite the mixed messages about consumer spending and sentiment. That idea is definitely borne out by Coach's happy holidays, not to mention its latest quarter.
Given the stock's appreciation over the last year, it's not too difficult to surmise that maybe Coach's shares are just as fully priced as the company's goods are right now -- and that maybe prospective investors ought to think twice before jumping into Coach. On the other hand, it never hurts to consider a retailer that can hold on to full-price allure.
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Alyce Lomax does not own shares of any of the companies mentioned.
