Luxury leather goods retailer Coach ( COH) posted a 76% rise in third-quarter profit Tuesday on a big jump in total sales. Results surpassed the Wall Street consensus by 3 cents and the company's own estimate by 4 cents. After also projecting fourth-quarter and both fiscal year 2004 and 2005 earnings above analysts' estimates, shares of the company were 3.4% higher in premarket trading. In the quarter ended March 27, the company earned $58.3 million, or 30 cents a share, compared with $31.9 million, or 17 cents a share, in the year-ago period. Analysts had been calling for 27 cents a share. Revenue was $313.1 million, up 42% from $220.4 million in the prior-year quarter. Same-store sales in the quarter jumped 20.5%. "Colorful spring offerings, driven by handbags and women's accessories, have drawn an enthusiastic response from consumers," the company said in a statement. "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 had
said on Feb. 23 that it expected third-quarter results to come in a penny above analysts' then-consensus of 25 cents a share. Coach said gross margin in the third quarter expanded to 75.9% of sales from 72.5% of sales a year ago, citing channel mix, sourcing cost initiatives and product mix. Shares of the New York-based company were lately up $1.35 at $40.85 in the premarket trading session. The company expects sales to be over $1.3 billion for the full fiscal year ending July 3, which would be an increase of about 37% from prior year. Earnings are seen as at least $1.32 a share in fiscal year 2004, which would be a 67% increase from last year. Analysts' consensus estimate is $1.25 a share. Coach said its 2004 estimates reflect sales of at least $330 million in the fourth quarter and earnings of at least 30 cents a share, which is up from a previous estimate for 26 cents a share. Analysts' consensus estimate is 26 cents a share. The company earned 16 cents a share in the same period of fiscal 2003. In fiscal 2005, the company expects sales to increase 19% to at least $1.55 billion with earnings up 21% to least $1.60 a share. Analysts are projecting a profit of $1.51 a share. The company had 167 retail stores and 77 factory stores as of March 27. Coach added one location in Japan during the quarter, which brought its total there to 100 stores. In the fourth quarter, the company plans to add seven more retail stores in the U.S., bringing the total to 19 new retail stores in fiscal 2004.