NEW YORK — Coach Inc.’s financial results are as hot as its handbags.

The New York-based leather goods company said Tuesday its net income skyrocketed 72.6 percent to $29.9 million, or 32 cents a diluted share, for the fourth quarter ended June 28, compared with $17.3 million, or 19 cents, in the same period last year. Results were ahead of its own expectations as well as Wall Street’s forecast of 30 cents a share.

With new introductions, category expansions and ongoing successful collections driving old and new customers into the stores, sales increased 35.1 percent to $231.5 million from $171.4 million and same-store sales were up 21.6 percent. Direct-to-consumer sales rose 31 percent to $139.9 million, with its retail store comparable-store sales increasing 37.1 percent and factory store comps up 3.6 percent. Indirect, or wholesale, sales increased 41 percent to $91.6 million, driven by strong gains at Coach Japan.

“While all areas of our business performed well in the quarter, we were particularly delighted with the continued momentum of our U.S. full-price business, which enjoyed increases in both traffic and conversion in our own stores and significant increases in U.S. department stores’ point-of-sale sales,” Lew Frankfort, chairman and chief executive, told Wall Street analysts on a conference call.

Coach shares finished the day down $1.17, or 2.1 percent, at $54.20 but established a new 52-week high of $57 in intraday trading on the New York Stock Exchange Tuesday.

The company also reported that Frankfort; Keith?Monda, president and chief operating officer, and Reed?Krakoff,?president and executive creative director, inked five-year employment agreements. Associated with these deals was a sign-on bonus expense for Krakoff that impacted fourth quarter after-tax results by 3 cents.

The momentum across all business channels has continued into July, allowing the company to boost its guidance. For the first quarter, Coach expects earnings of at least 33 cents, compared with 24 cents last year, on sales that are expected to grow about 19 percent to at least $230 million. It also now estimates 2004 earnings of at least $1.92, as sales are forecast to swell 16 percent to $1.1 billion.

Frankfort, sounding as excited about the financial results as he did its new fall lineup, said Coach will unveil new products for fall-holiday, starting in July with the Soho Signature group as part of its transitional assortment. This will be followed in August by a Soho leather and suede group, an updated Hampton leather group in September and a Soho Duffle group in October. In addition, he said Coach plans to introduce a holiday plaid group and the Gallery Tote and offer a collection of occasion bags and clutches as well as its cold weather assortments.Coach, which started in 1941 and currently operates 156 retail stores and 76 outlets, said due to the strong market share gains it has made over the past several years, it now believes the brand can support between 300 and 350 doors. It said is expects to add 100 U.S. retail stores over the next four to five years, including 20 new stores in fiscal 2004.

Maribeth Holland, an analyst with Goldsmith & Harris, said“There is a solid cachet with a Coach bag that similarly-priced bags don’t carry,” she said, underscoring the brand loyalty of the Coach customer and that her average age is coming down to 35 years.

For the full year, earnings rocketed 70.8 percent to $146.6 million, or $1.58 a share, versus $85.8 million, or 94 cents, last year, including reorganization charges. Excluding the charge, income in 2002 reached $88 million. Sales in 2003 rose 32.5 percent to $953.2 million over $719.4 million.

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