Coach (NYSE:COH) reported Tuesday a stronger-than-expected 34% rise in third-quarter profit on higher North American sales and the designer’s continued push to expand overseas.
The New York-based company posted net income of $189 million, or 63 cents a share, compared with $141 million, or 44 cents a share, in the same quarter last year.
Revenue for the handbag maker was $912 million, up 20% from $761 million a year ago.
Results for the period ended Oct. 2 beat the Street’s view of 55 cents for earnings and $845.1 million for revenue.
Coach CEO Lew Frankfort said the company is “extremely pleased” with the quarterly earnings, attributing the beat to the “resiliency of the premium handbag and accessory category in North America,” as well as growth in developing markets.
“This quarter’s performance demonstrated a continuation of the strength we have seen in our business throughout 2010, as the wind was once again at our back,” he said.
Direct-to-consumer sales boosted revenue, up 19% to $775 million from $654 million a year ago, driven by an 8.5% rise in North American comparable store sales, or stores that have been open at least 13 months, while indirect sales gained 27% to $136 million, compared with $108 million a year ago, driven by higher shipments into US department stores and international wholesale.
In an effort to expand globally, Coach continued opening shops in Japan and China, adding eight in China last quarter to a total of 49. In upcoming months, the company plans to open its first regional global flagship in London, and additional locations in France, Spain and Portugal.
“We’re well positioned for the upcoming holiday season and the balance of the fiscal year and remain confident in our growth prospects and ability to drive sales and earnings at a double-digit pace, given the current strength of the Coach business and our increasing global expansion,” Frankfort said.
During the three-month period, Coach repurchased about 3.6 million of its shares at an average cost of $38.35, totaling some $137 million. At the end of the first-quarter, the company still had $422 million remaining under the authorization.