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NEW YORK — Anyone looking for signs of weakness in the high-end segment is going to have to wait.

On Monday, Coach Inc. delivered stellar first-quarter results with profits soaring 53.5 percent on a 30.5 percent sales gain. And regarding the holiday shopping season, management at the company expects another good year.

“As most of you know, during the last several years, we have established a lane between the moderate segment and the old luxury accessory brands, which we termed ‘accessible luxury.’ This positioning, coupled with our brand and business equities, is Coach’s competitive advantage yielding staying power, more predictable results and increasing productivity,” said Lew Frankfort, chairman and chief executive officer, on a conference call.

Frankfort said U.S. retail comps have been in the double digits for the first quarter in each of the last four fiscal years, and said on average, Coach’s retail stores are “twice as productive as they were just four years ago.”

For the three months ended Oct. 1, net income, including the impact of stock option expense, came in at $93.6 million, or 26 cents a diluted share, compared with $61 million, or 16 cents, in the same year-ago quarter. Wall Street analysts had the company pegged to earn 23 cents a share, according to Thomson Financial. Excluding the expense for stock options, net income was $100 million, or 26 cents, versus $68 million, or 17 cents, a year ago. Sales in the quarter climbed to $449 million from $344.1 million in the prior year.

Shares of Coach rose $1 to close at $32.25 in trading Tuesday on the New York Stock Exchange, with 4.7 million shares trading hands compared with an average three-month trading volume of nearly 2.7 million shares. On Monday, shares of Coach fell to $31.25 on a trading volume of nearly 5.2 million shares, compared with Friday’s close of $32.26. The sell-off followed a research note Monday from Merrill Lynch expressing caution, in part, over possibly less traffic at the outlet centers due to higher energy costs.

After posting results, Coach provided second-quarter guidance, projecting earnings per share of at least 45 cents on sales of $645 million, excluding the 2 cent-per-share cost for option expensing. For the full fiscal-year 2006, the company expects sales in the $2.1 billion range, up 23 percent from last year, and diluted earnings per share of $1.28 before option expense. Analysts are forecasting earnings per share at $1.26. Including option expense, the company expects EPS of at least $1.18 for the year.

This story first appeared in the October 26, 2005 issue of WWD.  Subscribe Today.

During the call, Frankfort said the quarter’s results were driven primarily by “strong gains in U.S. department store and international wholesale sales.” As for the outlet stores, or what Coach calls its U.S. factory store business, Frankfort said that operation has “remained remarkably strong this quarter, even in the wake of higher gasoline prices, given the vibrancy of the brand, the appeal of the Coach product, our exceptional value and the continued relative strength of premium factory centers.”

On the call, Michael Tucci, president of Coach’s Retail North America division, highlighted some of the key product offerings during the quarter. They included Hamptons Weekend in a new fall palette, an updated Soho collection in leather and suede, the Chelsea handbag group in nuboc and the well-received Optic Signature line. Tucci said the limited-edition styles — such as the Optic Signature chenille tote at $598 and the Signature python stripe satchel at $498 — all “blew out,” which spoke to the company’s opportunity to “selectively trade up our average retail [price] in handbags.” The product line for holiday gift-giving will feature metallics, fur and beading embellishments, he said.

Neely Tamminga, an analyst at Piper Jaffray, reiterated an “outperform” rating of Coach following the earnings report. She wrote in her research note that she is “encouraged by a 9 percent increase in average handbag prices from $233 to $255, driven in part by traction achieved with limited-edition handbags.” According to Tamminga, the company’s diversification across product and geography is a positive, as well as the “abundant growth opportunities in Japan.”

Coach said direct-to-consumer sales, which now include sales by Coach Japan, rose 29 percent in the quarter to $315 million from $244 million a year ago. Sales in Japan gained 24 percent in constant currency, fueled by new store openings, expansions and mid-single-digit sales gains in comparable retail locations, the company said. The company said U.S. comps rose 25.1 percent, with retail stores up 14.4 percent and factory stores up 35.8 percent. Indirect sales, which now exclude Coach Japan, rose 34 percent to $134 million from $100 million last year.