Coach bags bigger third quarter profits
Sales of its leather trimmed fabric handbags helped the US accessories manufacturer Coach to pre-tax profits of $237.5 million in the third quarter ended March 27 2004, a 49% increase on the year before. Net sales rose 42% to $313 million as gross margin expanded by 340 basis points from 72.5% to 75.9%, driven by channel mix, sourcing cost initiatives and product mix.
“Colourful spring offerings, driven by handbags and women's accessories, have drawn an enthusiastic response from consumers,” commented Chairman and CEO Lew Frankfort. “We're particularly pleased with the performance of the Soho handbag collection across multiple fabrications and silhouettes, highlighted by the new flap hobo. In addition, we're also pleased with the continued strength of Hamptons - notably the updated carryalls, popular buckle demi and flap satchel. Our results in Japan were also very strong, as comparable locations again posted double-digit sales gains, and our new shops exceeded our expectations.”
The company estimates 2004 sales of over $1.3 billion for the full fiscal year ending July 3, 2004, an increase of about 37% on the year before, with earnings per share of at least $1.32, up 67% from last year, compared with analysts' current consensus estimate of $1.25.
