Coach, Inc., a leading marketer of modern classic American accessories, reported sales of $831 million for its third fiscal quarter ended March 27, 2010, compared with $740 million reported in the same period of the prior year, an increase of 12%. Earnings per diluted share totaled $0.50 for the quarter compared to $0.36 a year ago, an increase of 40%. Net income rose 37% to $158 million from $115 million reported for the prior year. It should be noted, last yearвЂ™s third quarter included a one-time charge related to certain cost reduction measures of $13 million before tax and $8 million after tax. Excluding this one-time charge from prior year results, net income rose 28% and earnings per share increased 31%.
The company also announced that its Board of Directors has voted to double its cash dividend, raising it to an annual rate of $0.60 per share starting with the dividend to be paid to stockholders in July 2010. Concurrently, the Board has authorized the repurchase of up to $1 billion of its outstanding common stock by June 30, 2012.
Lew Frankfort, Chairman and Chief Executive Officer of Coach, Inc. said, вЂњOur excellent third quarter results showed further strengthening of our full-priced businesses across all geographies and channels. These trends reflect the traction of the strategies we put into place entering 2010, positioning Coach well for the future. Further, the announcements of the doubling of our dividend and the authorization of a new buyback program reflect our financial strength and our confidence in CoachвЂ™s business outlook.вЂќ
вЂњWe were very pleased to achieve results which showed double-digit increases in each key financial metric вЂ“ sales, operating income, net income and earnings per share. Importantly, we are also making significant strides in the globalization of the Coach brand. In China, weвЂ™re continuing to experience rapid growth and our business is trending about a year ahead of our originally articulated plan. WeвЂ™re now targeting to achieve about $250 million in sales during FY12. In addition, weвЂ™re opening our first mainland China flagship, in Shanghai, this week.вЂќ
вЂњLooking beyond North America and Asia, weвЂ™re pleased to announce our expansion plans into Western Europe. Through an agreement with Printemps, the renowned French department store group, we plan to open at least 14 locations in Printemps stores throughout France over the next three years. Our first will be a 1,700 square foot shop in their flagship boulevard Haussmann store in Paris this June. In addition, weвЂ™ve reached an agreement in principle to establish a joint venture with Hackett Limited, the iconic British retailer, to open Coach stores in the U.K., Spain, Portugal and Ireland. We expect that the first locations in the U.K. and Spain will open during the next twelve months. WeвЂ™re confident that the Coach proposition of New York fashion and accessible luxury will resonate with the stylish European consumer, as ithas throughout North America, Asia, and the Middle East,вЂќ Mr. Frankfort added.