Coach Inc.'s (COH) fiscal third-quarter earnings rose 21% on
strong sales in China as the company also raised its dividend
33%.
The luxury handbag, accessories and leather-goods maker has seen
its profit grow for over two years on the strength of its North
American direct-to-consumer businesses and global expansion. The
company also is broadening its men's business with more
male-oriented products and by opening men's stores in the U.S. and
Japan. But customers' growing concerns about the global economy may
temper Coach's momentum.
For the quarter ended March 31, Coach reported a profit of $225
million, or 77 cents a share, up from $186 million, or 62 cents, a
year earlier. Excluding items such as tax adjustments and
charitable contributions, earnings were 62 cents a share in the
year-earlier quarter.
Sales jumped 17% to $1.11 billion.
Analysts polled by Thomson Reuters had most recently forecast
earnings of 75 cents on revenue of $1.11 billion.
Gross margin rose to 73.8% from 72.8%.
Direct-to-consumer sales, which now include its Singapore
business, increased 18% to $984 million. Same-store sales rose 6.7%
in North America.
Sales were up 10% in Japan, on a constant-currency basis. China,
which the company has called its largest geographic growth
opportunity, saw sales grow 60%, driven by distribution growth and
double-digit same-store sales. Indirect sales rose 10% to $125
million.
Coach's board voted to increase the cash dividend to an annual
rate of $1.20 from 90 cents, starting with the dividend to be paid
in July.
Shares closed Monday at $75.12 and were inactive premarket. The
stock is up 23% so far this year.
-By Melodie Warner, Dow Jones Newswires; 212-416-2283;
melodie.warner@dowjones.com