Analysts on average expected a profit of 31 cents a share for the period ended Sept. 30. "We once again effectively executed our growth plans and realized company-wide performance that outpaced our stated goals," Lew Frankfort, chairman and chief executive officer of Coach, said in a conference call with analysts and investors.
Frankfort said continued growth in the US handbag market, including strong demand for its Signature Stripe bags, along with strong consumer interest in Coach's line of accessories, helped fuel the strong results. A spokeswoman with the New York City-based firm said it was the 24th time in the past 25 quarters that profits exceeded analysts' estimates.
The company, which operates 230 retail stores and 87 factory stores, opened a total of 20 retail stores in North America and Japan and added one factory store to its North American lineup during the quarter. Coach also plans to open seven more retail stores in the US before the holidays and two others in Japan.
Coach said overall retail sales were up 29% to $404 million during the quarter compared to $315 million for the same period in the past year. Sales at US stores open at least a year increased 21.4% with sales at retail stores rising 16% and factory store sales growing 27.1%.
Frankfort said the results reflected a double-digit first quarter increase in each of the past five years. Sales in Japan, the firm's second largest market next to the US, increased by 21% for the quarter on a constant-currency basis while comparable store sales rose at a mid-single-digit rate, the company said.
Indirect sales, including sales to other retailers not owned by Coach, were also up by 11%, rising from 134 million in the first quarter of the past year to $150 million in the current quarter. Coach also raised its year-end forecast, saying it expects full-year earnings of at least $1.63 per share.
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