Increased Share Of Internet Search Traffic Could Mean Better Comp Sales For Coach And Kate Spade

Baird analysts recently wrote to investors regarding handbag stock performance. The handbag sector underperformed in June for the third straight month, and ongoing concerns about sluggish retail foot traffic have driven a pullback in share prices.

Looking beyond retail store visits, Baird also examined internet search traffic and found Coach Inc COH and Kate Spade & Co KATE showed the most improvement. Their research found the following for the month of June:

• Michael Kors Holdings Ltd KORS - Traffic down 14 percent YoY globally, though the trend improved from the month prior (when traffic dropped 16 percent globally).
• Coach - Traffic up 4 percent globally, showed more sequential global search traffic improvement than any other brand, YoY declines improved sequentially.
• Kate Spade - Positive trends continued with traffic up 9 percent YoY globally.

Vera Bradley, Inc VRA also was mentioned, with U.S. traffic down 8 percent, though that’s an improvement from May, when traffic was down 17 percent.

Historically, the analysts mention, comp sales have had a strong correlation to search traffic data.

Coach is the only company in the group that offers a dividend. The current yield is 3.32 percent, 58 percent higher than the 2.10 percent average yield for the S&P 500.