More shoppers buying full-price handbags helped Coach Inc.'s fiscal third-quarter profit rise 37 percent.
The results provide fresh evidence that well-heeled shoppers are increasingly in a mood to splurge, driving rising sales at luxury brands after pulling back spending sharply during the recession.
The luxury handbag maker said Tuesday profit rose to $157.6 million, or 50 cents per share during the three months ended March 28. That's up from $114.9 million, or 36 cents per share, in last year's third quarter.
Revenue rose 12 percent to $830.7 million in the quarter, which ended March 27.
Results beat analysts expectations of a profit of 46 cents per share on revenue of $811.5 million, according to a poll by Thomson Reuters.
Coach is also doubling its annual cash dividend to 60 cents per share. That starts with the dividend distributed in July. And it plans to buy back up to $1 billion of its common stock by June 30, 2012.
Sales through Coach's own stores, Web site and catalogs rose 15 percent to $726 million during the third quarter.
Sales in stores open at least one year, considered a key measure of a retailer's financial health, rose 5.1 percent in North America.
Sales at stores other than its own fell 1 percent to $105 million, mainly because of lower shipments to U.S. department stores. The company has cut back on its presence in department stores, which saw sinking sales during the recession.
Coach said it is about a year ahead of its expansion plan in China and now expects about $250 million in sales during fiscal 2012. The company's first mainland China store, in Shanghai, opens this week.
Coach also announced expansion plans in Europe, including an agreement with French department store group Printemps to open at least 14 locations in Printemps stores over the next three years.
It also started a joint venture with U.K. retailer Hackett Ltd. to open Coach stores in the U.K., Spain, Portugal and Ireland. U.K. and Spain stores should open over the next year.
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