Coach reports earnings growth of more than 36 percent

Coach Inc., New York, today announced an increase of 36 percent in earnings per diluted share before option expense to $0.47 for its second quarter ended Dec. 31, up from $0.34 per diluted share a year ago. Net sales were $650 million, 22 percent higher than the $532 million reported in the same period of the prior year. Lew Frankfort, chairman and CEO, said in a statement: "Across all businesses, handbags and women's accessories continued to drive our business results. Our key item strategy was very successful, with the highlighted groups and collections generating over 60 percent of our holiday sales. Duffles and Gallery Totes were important handbag initiatives during the quarter and were very well received by consumers. In addition, the Soho and Hamptons collections continued to perform well, as did Madison, our evening group. New accessories, including letter charms, iPod covers and cell phone lanyards, were the perfect add-on holiday gifts. We were particularly pleased by the performance of our entry-level handbags--such as the Soho Small Flap--and the pinnacle portion of our offering, such as the Daphne Satchel. This strength, across multiple price points, speaks to the broad appeal of Coach's assortment." This spring, as planned, Coach will add about 15 more retail stores in the United States, bringing the total to around 25 new retail stores in fiscal 2006. The company will also be adding at least six new locations in Japan during the second half, including a 6,200-sq.-ft. Kobe flagship.