Coach (COH) is expected to report a year-over-year increase in second-quarter earnings and revenue before tomorrow's opening bell despite the difficult handbag environment. 

Analysts surveyed by FactSet estimate that the luxury retailer will report adjusted earnings of 74 cents per share on revenue of $1.32 billion, up from adjusted earnings of 68 cents per share on $1.27 billion a year ago.

Same-store sales are projected to be up 2.2%, according to FactSet, compared to a 4% decline for the year-ago period.

Investors will likely look for comments on the accessories market, which has been hurt by steep discounts at department stores, and M&A prospects.

Coach has reportedly expressed interest in acquiring rival handbag maker Kate Spade (KATE) . 

Credit Suisse reiterated an "outperform" rating on Coach stock ahead of the results, noting that promotions were stable throughout the holidays and the company's average unit retail, or net sales divided by number of units sold, were up 27% year-over-year.