Updated from 11:18 a.m. ET with additional information throughout.NEW YORK ( TheStreet) -- Coach ( COH) surged Tuesday after increased international sales bolstered the luxury retailer's third-quarter profit beating analysts' forecasts. Shares jumped 9.8% to $55.55 on more than triple the normal daily trading volume. The company's net income for three-month period ended March 30 totaled $239 million an increase of 6% compared to the same period a year ago. Earnings per diluted share of 84 cents came in at the high-end of analysts' estimates. Coach Chairman and CEO Lew Frankfort attributed the strong results to the company's growing international sales, men's division and digital business as well as a continued turnaround of the brand to focus on accessories, particularly with the re-launch of its footwear division. The company is reinvigorated about "the next chapter of our growth story now under way as we transform Coach into a global, lifestyle brand anchored in accessories," Frankfort said in his opening comments during the earnings call. Analysts expected the luxury retailer to post quarterly earnings of 80 cents a share with the lowest estimate coming in at 74 cents and the highest at 84 cents a share, according to Thomson Reuters. Coach posted earnings per share of 77 cents in the year-earlier quarter. The company also announced that its board of directors voted to increase its cash dividend by 15 cents annually, raising it to an annual rate of $1.35 per share starting with the dividend to be paid to stockholders in July 2013. Coach said sales rose 7% to $1.19 billion for the quarter. (On a constant currency basis sales rose 10% for the quarter.) Operating income totaled $348 million, up 3% from the comparable year-ago period. Operating margin was 29.3% versus 30.4% reported in the prior year, Coach said. In North America, sales rose 7% to $792 million over last year. Direct sales for the region rose 8% for the quarter, while comparable store sales nudged higher at 1%. International sales was buoyed by strong growth in China. Overall international sales rose 6% to $382 million. Total China sales jumped 40%, with comparable store sales rising at a double-digit rate, the company said. In Japan, sales were flat over the prior year on a constant-currency basis, while dollar sales declined 14%, reflecting the weaker yen, Coach said. Coach has been under pressure from luxury retailer rivals, in particular trendier Michael Kors ( KORS). Coach is now looking to provide more sophisticated offerings to customers and focus on its men's division. It launched its new footwear offerings in March. At quarter-end, Coach had 352 retail stores and 191 factory stores. Store openings focused on Asia. At quarter-end, the company operated seven locations in Singapore, 27 in Taiwan, 10 in Malaysia and 49 in Korea, it said. Separately, the company announced that Coach veteran Reed Krakoff, its president and executive creative director will not renew his contract, which expires in June 2014. He plans to focus exclusively on his namesake brand. Coach is exploring "strategic options" for the Reed Krakoff brand, which may involve a sale to a group in which Krakoff would participate. In addition, the company is looking for a successor to replace Krakoff. Piper Jaffray analysts Neely Tamminga and Alex Fuhrman are somewhat concerned about how the Krakoff's departure will affect the company's turnaround. "Reed Krakoff's impending departure could serve as a disruption to the creative process and product innovation," the analysts wrote in a note earlier Tuesday. -- Written by Laurie Kulikowski in New York. Follow @LKulikowski To contact Laurie Kulikowski, send an email to: Laurie.Kulikowski@thestreet.com. >To submit a news tip, email: firstname.lastname@example.org.
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