Coach Upgraded To Hold At BB&T

By Tonya GarciaMarketWatch Pulse

Coach Inc. has been upgraded to hold from underweight at BB&T Capital Markets. The handbag category is "showing signs of stabilization" and Coach's "market share deterioration is slowing," analysts said in a Monday note. While BB&T believes the designs from creative director Stuart Vevers aren't as appealing to Coach's core customers, the new merchandise is improved. It's geared towards younger customers in style, with cross-body designs and wristlets, and its lower prices will drive traffic, the note said. Coach has also improved the in-store experience through its new Modern Luxury Outlet stores, said BB&T, though the slow roll out of these stores may be due to negative comparative-store sales at some of them. "We continue to believe this is evidence that the Coach brand is not as highly regarded as it once was and that market share losses are unlikely to be regained," the note said. Coach shares are up 11.7% over the past three months while the S&P is up 2.6% for the same period.

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