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Coach Sets Standard for Luxury Stocks

Coach raises the bar for luxury retailers, reporting better-than-expected earnings, doubling its dividend and initiating a new stock repurchase plan.



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is setting the bar high for luxury retailers, as its third-quarter profit shot up 37%, boosted by full-price selling.

During the quarter, the handbag maker earned $157.6 million, or 50 cents a share, compared with $114.9 million, or 36 cents, in the year-ago period. Analysts expected a profit of 46 cents a share for Coach.

Coach's revenue grew 12% to $830.7 million, while its same-store sales increased 5.1%.

Coach's China business is one year ahead of its growth plan, with sales now expected to hit $250 million during fiscal 2012. The company will open its first mainland China store in Shanghai this week.

The company also announced expansion plans in Europe -- which include stores in Spain, Portugal and Ireland.

Coach also doubled its annual cash dividend to 60 cents a share, and announced that it plans to repurchase $1 billion of its common stock by June 30, 2012.

"The repurchase plan and dividend raise are strong signals that Coach remains a vibrant domestic brand with identifiable international growth opportunities," Wall Street Strategies analyst Brian Sozzi wrote in a note.

Today's Coach earnings report sets a standard for other luxury retailers like

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, which have also been recovering nicely from the recession.

-- Reported by Jeanine Poggi in New York.

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