Published January 24, 2012
Coach (COH) revealed a 15% increase in second-quarter profit on Tuesday as holiday sales surged both domestically and abroad and its newer men’s business continued to grow.
The New York-based designer handbag and accessories maker earned $347 million, or $1.18 a share, compared with $303 million, or $1.00, in the year-earlier period. The results trumped average analyst estimates in a Thomson Reuters poll of $1.15.
Revenue for the three months ended Dec. 31 was $1.45 billion, up 15% from $1.26 billion a year ago, just beating the Street’s view of $1.43 billion. Those gains were led by a 17% increase in direct-to-consumer sales and 8.8% improvement in North American comparable store sales.
“We were especially pleased with our ongoing strength in North America during the holiday season,” Coach CEO Lew Frankfort said in a statement. “This growth indicates that we are continuing to increase our share of an expanding U.S. accessories market.”
The company said its directly-operated businesses in China are “growing nicely,” with the help of “excellent gains” in China, which is on track to generate at least $300 million in sales this year. Coach took control of its domestic retail business in Taiwan last quarter and will acquire its Malaysian business in July.
Coach has also predicted its men’s business will double in fiscal 2012 to more than $400 million globally. The success of Coach Men’s has underscored the company’s plan to expand the brand through new locations and existing real estate.