NEW YORK — Coach Inc. delivered another quarter of robust sales and earnings growth on Tuesday but wants even more: The handbag and accessories firm said it is aiming to double sales in five years.
The company posted a 36.5 percent jump in fourth-quarter profits while full-year earnings gained 34.3 percent from year-ago results. Sales swelled 30 percent in the three-month period, which was its 22nd consecutive quarter of sales growth of at least 20 percent.
"We're pacing ourselves. We have a blueprint to double our volume to $5 billion over four to five years," Lew Frankfort, chairman and chief executive officer, told WWD. Coach's current sales volume is $2.61 billion.
For the quarter ended June 30, net income rose to $160.6 million, or 42 cents per diluted share, from $117.6 million, or 31 cents, in the same period a year ago as sales climbed to $652.1 million from $501.6 million.
For the year, net income rose to $663.7 million, or $1.76 per diluted share, from $494.3 million, or $1.27, a year ago, while sales grew 28.4 percent to $2.61 billion from $2.04 billion.
For fiscal 2008, Coach expects sales to gain about 21 percent to $3.16 billion, the company said in its quarterly report. "Operating income is expected to rise about 23 percent with an operating margin improvement of at least 50 basis points," the company said in its statement. "Earnings per share are forecast to rise to at least $2.06, up about 22 percent from last year."
The positive outlook did little to raise Coach's share price Tuesday as investors took profits following a run-up of the stock prior to the earnings announcement. Shares of Coach closed down 5 percent to $45.46, which is about where the stock was prior to the gains made during Monday's run-up.
Of note during the quarter were sales in Japan, which gained 19 percent on a constant-currency basis. "In Japan, we were particularly pleased with our outstanding sales and market share growth in both the fourth quarter and for the year, which we achieved despite continued softness in the imported accessories market," Frankfort said in a statement. "Our rapidly expanding sales in Japan reflect the success of our distribution strategy, and demonstrate how well the Coach proposition resonates with the stylish Japanese consumer. This was clearly evidenced by the success of Ergo, reflecting the appeal of these lightweight leather handbags with minimal hardware."
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