NEW YORK ( TheStreet) -- Coach is learning a hard lesson for a luxury-goods maker: sometimes the only way to drive sales is by lowering prices. While the aspirational handbag retailer posted a 32% slump in fourth-quarter earnings, revised results were in-line with analysts' expectations. More importantly, while most of the retail space was shrinking, Coach actually opened up more stores, expanding its international business and rolling out a new brand. During the quarter, the company earned $145.8 million, or 45 cents a share, compared with $213.5 million, or 62 cents, in the year-ago period. Excluding one-time items, profit was 43 cents a share, in-line with analysts' expectations. Revenue dropped less than 1% to $777.7 million, from $781.5 million last year, while same-store sales fell 6.1%. Sales were boosted by Coach's new wallet-friendly line of handbags in the range of $200 to $300, which has improved full-price sales in the United States during the quarter. Coach said it will launch a new global brand called Reed Krakoff in 2010, which will include all women's ready-to-wear, handbags, women's accessories, footwear and jewelry. "We believe that this concept will serve to define the new American luxury and engage a different customer," CEO Lew Frankfort said in a statement. Coach also plans to open 20 new North American retail stores in fiscal 2010 and accelerate store openings in China, where sales have been strong.
Nonetheless, shares of the company fell 6% to $26.75 in pre-market trading and on Monday the company was downgraded by an analyst. Lazard Capital Markets analyst Todd Slater cut the company to hold from buy, saying that its shares grew 24% over the past two weeks, "already reflecting good news, yet the fundamentals have not yet proven to have fully troughed or even stabilized." --Reported by Jeanine Poggi in New York.