Coach, Inc. (NYSE: COH, SEHK: 6388), a leading marketer of modern classic American accessories, today announced sales of $1.45 billion for its second fiscal quarter ended December 31, 2011, compared with $1.26 billion reported in the same period of the prior year, an increase of 15%. Net income for the quarter totaled $347 million, with earnings per diluted share of $1.18. This compared to net income of $303 million and earnings per diluted share of $1.00 in the prior year’s second quarter, increases of 15% and 18%, respectively. Lew Frankfort, Chairman and Chief Executive Officer of Coach, Inc., said, “We’re very pleased with the strong sales and earnings growth we achieved once again this holiday quarter. Our performance reflected the strength of our franchise, our broad and diversified product platform and our multichannel, international distribution model.” For the second fiscal quarter, operating income on a non-GAAP basis totaled $521 million, up 15% from the $453 million reported in the comparable year ago period, while the operating margin was 36.0% versus 35.9% reported in the prior year. During the quarter, gross profit increased 14% to $1.05 billion from $915 million a year ago. Gross margin remained strong on a year-over-year basis at 72.2% compared to 72.4% in the prior year. SG&A expenses as a percentage of net sales on a non-GAAP basis improved to 36.2%, compared to the 36.5% reported in the year-ago quarter. On a GAAP basis, operating income for the quarter was $501 million with a 34.6% margin and the SG&A expense ratio was 37.6%. During the second quarter, the company recorded certain items. They included the one-time effect of a revaluation of deferred tax balances due to a change in Japan’s corporate tax laws and the favorable completion of a multi-year pricing agreement with Japan. Taken together, they yielded a substantially lower tax rate of 30.4% for the quarter, which decreased Coach’s provision for taxes by $12 million. As a result, the company made a contribution of $20 million to the Coach Foundation, impacting SG&A expenses by that amount, and precisely offsetting the effect of the one-time tax benefits to net income and earnings per share.