New Products And Services Can Drive Sales, Stock Price.(MAKING MONEY)(INVESTOR'S CORNER)

Byline: NANCY GONDO

Consumers love snapping up the next big thing, whether a gadget, a new service or even low-carb foods. Innovative companies know coming up with new products is key to growing sales, and their stock price.

That's why the N in CAN SLIM stands for new products or services, new management or new industry conditions. In fact, more than 95% of the biggest stock market winners from 1952 to 2001 got a boost from at least one of those criteria, an IBD study found.

A young, exciting company can burst out of the gate. But once people get used to its product or service and the business matures, growth can slow down. Rivals may crop up, come up with a better product, or the industry landscape could also undergo changes.

How a firm responds to such challenges can make a difference in its financial results and its share price.

Coach, founded in 1941, started selling high-quality handbags at prices slightly lower than those charged by haute couture designers. When it got bought by Sara Lee in 1985, it was a money-making machine, growing sales an annual 32% to $540.4 million the fiscal year ended June 1997.

But it ran out of steam. Coach's sales fell 3.4% in fiscal 1998 and 2.8% in '99. What happened? Some other designers also began offering stylish, yet affordable, high-end products. At the same time, firms making ...