Coach Inc. Tuesday said its net income leaped 60 percent in the latest quarter, as sales and operating margin both improved at the luxury handbag and accessories retailer.
The New York-based company has also raised its earnings outlook for the full year.
For the fiscal 2005 first quarter ended Oct. 2, Coach reported net income of $67.7 million, or 35 cents a share. That's up from the prior year's $42.3 million, or 22 cents a share.
The latest results beat Wall Street expectations. Analysts surveyed by Thomson First Call had forecast, on average, earnings of 33 cents a share.
Coach shares were at $44.85 in early trading Tuesday, up $3.13, or 7.5 percent, on the New York Stock Exchange.
Coach's first-quarter net sales rose 33 percent to $344.1 million from $258.4 million.
Direct-to-consumer sales, which consist primarily of sales at U.S. Coach stores, rose 30 percent to $175 million from $134 million.
Same-store sales, which are generally sales at stores open at least a year, were up 15.1 percent for the quarter.
Indirect sales rose 36 percent to $169 million from $124 million, helped by international sales in Japan and elsewhere and by sales at U.S. department stores.
Coach also said its gross margin increased to 75.0 percent from 72.7 percent, helped by efforts to deal with sourcing costs.
For the full year, Coach raised its forecast to a profit of at least $1.78 a share. That's up from the $1.71 a share Coach forecast in September. The company held its sales projection steady, at over $1.6 billion.
Last fiscal year, Coach earned $1.36 a share on sales of $1.32 billion.
First Call's projections for the current year are earnings of $1.73 a share on sales of $1.62 billion.
