NEW YORK (AP) — Coach Inc. said Tuesday its fiscal first quarter profit rose 14 percent on strong demand for its luxury handbags and accessories in the U.S. and abroad.
The results beat Wall Street expectations and Coach shares rose 2 percent in premarket trading. They are an indication the luxury consumer continues to spend in North America despite the uncertain economy, a particularly encouraging sign ahead of the upcoming holidays.
CEO Lew Frankfort said Coach is "well positioned for another excellent holiday season," due to the momentum of its business and breadth of offerings.
The New York company reported net income rose to $215 million, or 73 cents per share, for the three months ended Oct. 1, up from $188.9 million, or 63 cents per share, a year ago.
That beat analysts' expectations of 70 cents per share, according to a poll by FactSet.
Revenue rose 15 percent to $1.05 billion from $912 million a year ago. Analysts expected $1.02 billion. Revenue in stores open at least one year rose 9.2 percent in North America. The measure is important since it excludes results from stores that open or close during the year.
In North America, the company opened two retail stores, including one men's store and closed two locations. At quarter's end, the company operated 345 retail stores and 152 factory stores in North America.
Coach has been focusing on increasing its men's offerings and expanding abroad.
In China, Coach's fastest growing segment, revenue in stores open at least one year rose in the double-digit percentage range. The company opened four new locations in China in the quarter and one in Macau, bringing the total to 71.
The company is forecasting revenue of $300 million from the region for the year, the high end of the guidance the company gave in August.
Frankfort said its men's business has had "excellent response" to its men's offerings both in dedicated stores and dual-gender stores.
"We remain confident in our ability to deliver double-digit sales and earnings growth during our planning horizon given the strength of the Coach brand and our increasing global expansion," Frankfort said.
Shares rose $1.34, or 2.1 percent, to $64 in premarket trading.