NEW YORK — Coach Inc. is planning on introducing jewelry offerings next year, as well as a foray into the fragrance business “within the foreseeable future.”
Coach chairman and chief executive officer Lew Frankfort made the revelations Tuesday during a conference call to Wall Street analysts after the com-pany posted a 34.6 percent jump in net income for the third quarter.
Frankfort said the company is “actively developing” a jewelry group and is looking to introduce jewelry into its full-priced business, as well as on the Internet, “sometime in the third quarter” of the next fiscal year, or between February and April. He added that the company might “introduce some items if we’re ready by the holiday season,” which would be during the firm’s second quarter. Currently Coach sells cuff bracelets, but plans to add proprietary items in the areas of charms, bracelets, earrings and necklaces, the chairman said.
Outside of Coach’s core handbag business, footwear represents 10 percent of sales, Frankfort noted. He also said the company is working on an entry into the fragrance business.
“It’s a little early for us to announce anything, but I think you can expect that we will be in the fragrance business within the foreseeable future,” he said.
For the three months ended April 1, the company posted a net income that rose to $108.8 million, or 28 cents a diluted share, from $80.9 million, or 21 cents, in the same year-ago period. The firm’s earnings per share beat analysts’ consensus estimates by 1 cent.
Sales rose 19.7 percent to $497.9 million from $415.9 million, which included a 22 percent increase to $374 million in direct-to-consumer sales and a 21 percent gain in U.S. same-store sales. The total comps gain was boosted by an 11.7 percent rise in retail same-store sales and a 34 percent jump in comps at the company’s factory stores. Indirect sales were up 14 percent to $124 million. Sales in Japan rose 23 percent on a constant-currency basis.
For the nine months, net income rose 40.1 percent to $376.6 million, or 96 cents a diluted share, from $268.8 million, or 69 cents, a year ago. Sales gained 23.6 percent to $1.6 billion from $1.29 billion.
This story first appeared in the April 26, 2006 issue of WWD. Subscribe Today.
Coach is estimating sales of $2.1 billion for the year ending July 1, an increase of 23 percent from a year ago, and projecting sales growth of 19 percent to $2.5 billion for fiscal 2007.
In addition to its core markets in the U.S. and Japan, the company is eyeing an expansion in mainland China, with its initial focus on Hong Kong. Coach’s 13th retail store in Hong Kong, on Canton Road, will open in July. The company already has two small stores in mainland China, and plans to open at least 10 locations in major cities during the next two to three years, Frankfort said during the call.