Coach Q3 profit rises on 17% sales increase
New York -- Coach Inc. posted a higher-than-expected quarterly profit on Tuesday, benefiting from strong sales and improved margins. The company also announced that its board of directors has voted to increase its cash dividend by 33%.
Net income for the third quarter ended on March 31 was a better-than-expected $225 million compared with $186 million a share, a year earlier.
Revenue rose 16.6% to $1.11 billion, just above analysts’ expectations. Same-store sales in the United States rose 6.7%.
In China, sales jumped 60% and were on pace to hit at least $300 million this year.
Coach also said it is eliminating coupons at its factory outlet stores.
“Leveraging the underlying strength of our North American business we implemented a significant shift in our pricing strategy in factory stores during the quarter, as we eliminated in-store couponing across our network. Our new ‘no math’ pricing structure provides us with greater marketing flexibility, enabling us to balance productivity gains and margin improvement,” said Lew Frankfort, chairman and chief CEO, Coach.
The company said it will buy back its retail business in Malaysia this July, and Korea in 2013, from local partners. That follows similar moves by the chain in Taiwan this year and Singapore last year.