Updated from 7:57 a.m. EST

Touting strong holiday sales, Coach ( COH) blew past second-quarter earnings targets Tuesday and raised its full-year guidance.

"Clearly the Coach brand has reached a new level of popularity among North American customers," CEO Lew Frankfort said during a conference call with analysts.

Coach earned $227.5 million, or 61 cents a share, for the quarter ended Dec. 30, up from $174.2 million, or 45 cents a share, a year earlier.

Sales surged to $836.4 million from $650.4 million a year earlier. Analysts polled by Thomson Financial were looking for earnings of 58 cents a share and sales of $797 million.

Same-store sales at U.S. stores jumped 25.7%.

"It's worth noting that U.S. full price store sales accelerated again this quarter," Frankfort said in a statement, "as we generated the highest level of holiday comparable store sales increases in the company's public history. It was also the 19th consecutive quarter of double-digit comps in retail stores."

Michael Tucci, retail division president, said on the conference call that Coach's new "Legacy" accessories were a stand-out for the quarter, generating about 18% of total sales.

Frankfort said the company will be seeking to raise brand awareness in emerging markets, including China, Korea and the Middle East. He described Japan -- where the company already has a big presence -- as a "vital, but increasingly mature market."

As for new initiatives, Tucci said Coach will be rolling out jewelry for all stores in the fall. The company also plans on selling fragrances in retail stores and on the Internet.

Coach said it is having a strong January, driven by "an enthusiastic response" to its transitional and early spring offerings.

Coach now sees full-year earnings of $1.71 a share and sales of $2.63 billion. The company's prior forecast called for a profit of at least $1.63 a share and sales of $2.55 billion.

Analysts had targeted fiscal-year earnings of $1.67 a share on $2.58 billion in sales.

The company expects to open 10 additional stores this year, boosting its 2007 store opening target to 40.

Shares were trading up 10 cents to $44.08.

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