Coach Posts Gains for Q4, Year

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Fourth-quarter net income at Coach Inc., New York, rose 80 percent, reflecting 35 percent growth in net sales combined with "significant operating margin improvement," the company said yesterday.

Also, for the fiscal year ended June 28, net sales climbed 32 percent as net income skyrocketed 67 percent versus the previous fiscal year, before the effect of reorganization charges related to the closing of a manufacturing facility in Puerto Rico in fiscal 2002. Including these costs in the year-ago period, net income rose 71 percent.

In the quarter, net sales totaled $231.5 million while net income was $29.9 million, up from $16.6 million a year ago.

In the 2003 fiscal year, net sales reached $953.2 million, up from $719.4 million. Net income reached $146.6 million compared with $88 million the previous year, excluding reorganization charges.

Fourth fiscal quarter and full-year sales grew in each of Coach's primary channels of distribution, including:

· Direct-to-consumer sales, which consist mainly of sales at Coach stores, ballooned 31 percent to $139.9 million in the quarter from $106.5 million in the year-ago period. Comparable-store sales rose 21.6 percent, with retail stores up 37.1 percent and factory stores up 3.6 percent. In the full year, DTC sales rose 25 percent to $559.6 million. Overall, comparable-store sales for the fiscal year increased 15.2 percent, with retail stores up 24.6 percent and factory stores up 5 percent.

· Indirect sales climbed 41 percent to $91.6 million in the fourth quarter. During the year, indirect sales rose 45 percent to $393.7 million, from $272.3 million in 2002.


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