Coach Inc. is the preferred handbag brand in a segment where growth "remains subdued," wrote Cowen & Co. analysts in a Wednesday note. Responses to the Cowen National Handbag Survey, conducted over the course of department store checks in 30 states between October and December, indicate that Coach is regaining market share based on better merchandise and more controlled promotions and inventory, analysts said. Still, the handbag sector is suffering from "too much industry sameness... with multiple luxury players appearing very similar," Cowen said. Coach will announce fiscal second-quarter 2016 earnings on Jan. 26. According to the results of the bank's survey, analysts describe Coach's sales performance as "stable" at an estimated 2% to 3% decline. The survey "revealed more relevant and fashionable bags, a wider assortment, and better visual-merchandising resonating well with customers," the note said. "We're also pleased to see responses indicating inventories and markdowns of Coach handbags under control at U.S. wholesale doors." Analysts say they're concerned Michael Kors Holdings Ltd. is reaching peak market share. Shares of Coach are down 1.5% in Wednesday trading and down 14.9% for the past 12 months. Shares of Michael Kors are down 0.5% on Wednesday and down 46.9% for the past 12 months. The S&P 500 is down 9.8% for the past year.
Copyright © 2016 MarketWatch, Inc.