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Published
Jan 20, 2010
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Coach profit tops view but shares sink

By
Reuters
Published
Jan 20, 2010

NEW YORK (Reuters) - U.S. leather goods company Coach Inc (COH.N) reported higher-than-expected quarterly sales and profit on Wednesday 20 January, helped by its first same-store sales increase in North America in over a year.

Still, the results did not impress investors, who sent Coach shares down 6 percent in premarket trade.



Coach, which makes handbags, wallets, shoes and other accessories, said net income rose to $241.0 million, or 75 cents per share, in its fiscal second quarter that ended on December 26, from $216.9 million, or 67 cents per share, a year earlier.

Total sales rose 11 percent to $1.07 billion.

Analysts on average were expecting earnings of 72 cents per share on sales of $1.02 billion, according to Thomson Reuters I/B/E/S.

Same-store sales, a closely watched measure of sales at stores open at least a year, rose 3.2 percent in North America, after falling in each of the past four quarters as the economic downturn curbed consumers' appetites for luxury goods.

The company said sales trends in North America built steadily over the quarter, with its strongest performance in December, helped by holiday shoppers.

"Despite the challenging retail environment, we're confident that we'll continue to deliver healthy sales and earnings growth over the balance of the fiscal year," said Coach Chief Executive Lew Frankfort.

Frankfort cited the success of Coach's new lower-priced Poppy line and added that Coach expects to expand its market share in North America irrespective of growth of the entire handbag industry.

Coach shares were down $2.20 to $35.25 in premarket trade.

(Reporting by Martinne Geller; Editing by Derek Caney)

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