Coach (COH) said Tuesday that its fourth-quarter profit climbed 18% during the quarter but higher labor costs forced its margins lower, sending its shares lower in morning trade.

Strong 17% revenue growth in North America and its growing global presence in China and other East Asian markets helped to offset a slowdown in Japan following the March 11 earthquake and tsunami in Japan that stifled demand and production in the region, the company said.

The New York-based upscale handbag and accessory designer posted fourth-quarter net income of $202 million, or 68 cents a share, compared with $195.5 million, or 64 cents a share, in the same quarter last year. Analysts polled by Thomson Reuters were expecting on average a slightly stronger profit of 65 cents.

Revenue for the three months ended July 2 was $1.03 billion, up 17% from $950.5 million, just beating the Streets view of$1.01 billion. Coach attributed the higher sales to the success of its renewed focus on Mens and its digital strategies.

Coach CEO Lew Frankfort, who said he was extremely pleased with the companys fourth-quarter and fiscal results. Looking ahead, he said the company remains confident in its growth prospects and its ability to drive sales and earnings at a double-digit pace.

Were continuing to drive sales through higher productivity and distribution expansion, globally, he said.

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