Coach Net Jumps 53%

Earnings before options expenses of 26 cents a share are better than forecast.
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Coach

(COH)

said first-quarter profit rose a better-than-expected 53% from a year ago and the handbag maker said the coming quarter and year look strong.

Coach earned $94 million, or 24 cents a share, in the quarter, compared with $61 million, or 16 cents a share, a year ago. Before an expense for stock options, earnings in the latest period were $100 million, or 26 cents a share. Analysts expected 25 cents a share on that basis.

The company said its gross profit rose 32% from a year ago, reflecting a 1-percentage-point improvement in the gross margin to 76%, driven by product mix and sourcing cost initiatives.

For the second quarter, Coach expects to earn 45 cents a share before options expenses on sales of at least $645 million. Analysts were forecasting earnings of 44 cents a share on sales of $648.9 million. For the year, Coach sees earnings of $1.28 a share on sales of $2.1 billion. Analysts were forecasting earnings of $1.26 a share on sales of $2.11 billion.

The stock closed at $31.25 Monday, about 21 times next year's Thomson First Call earnings consensus of $1.47 a share.