Coach profits soar 70% on rising handbag sales
The New York-based designer of high-end leather accessories, Coach Inc., has surprised the markets with a 70% leap in first quarter profits to $22.5 million. For the three months ended September 28 2002, sales were up 28% to $193 million, helped by the popularity of its handbags in the United States and Japan. Costs were reduced by improving margins and by the company gaining control of its Japanese distribution operations through a joint venture.
On the basis of the results, the company was able to raise its second quarter forecast to $290 million and earnings per share to around 61 cents. For fiscal 2003, sales are now predicted to come in at around $865 million, as opposed to the previously forecast range of $805 million to $830 million, before one-time items.
"We do plan conservatively. We manage our budget and inventories tightly, but we are in a position to adapt, should the demand come forward," said chairman and chief executive Lew Frankfort. The strength of our brand has been somewhat of a surprise to us."
