Accessory maker Coach Inc has reported an earnings increase of almost 60 per cent per diluted share to $0.35 for the quarter ended 2 October, from $0.22 per diluted share in the first quarter of 2003. A 33 per cent gain in net sales combined with improvements in operating margin were behind the improvements the company said.

First-quarter net sales totalled $344 million, up from the $258m recorded in the same period last year. Net income increased 60 per cent to $68m, or $0.35 per diluted share, compared with $42m, or $0.22 per diluted share in the prior year.

During the quarter, gross profit rose 37 per cent to $258m from $188m a year ago. Gross margin expanded by 230 basis points from 72.7 per cent to 75.0 per cent driven by channel mix, product mix and sourcing cost initiatives.

Lew Frankfort, chairman and chief executive officer of Coach said: "Our exceptional results continue to be driven by both the vitality of the Coach brand and the enthusiastic consumer response to our product offerings across all major business units.

"We're confident that the strength of the Coach brand and our distinctive proposition, combined with our well-defined roadmap for growth, will enable Coach to continue to deliver excellent financial results over our planning horizon."

The company now estimates second fiscal quarter sales of at least $505 million, representing a year-over-year increase of at least 23 per cent, and earnings per diluted share of at least $0.64, up at least 28 per cent.

For the fiscal year 2005 the company expects to generate sales of over $1.6 billion, an increase of at least 21 per cent from prior year, and earnings per diluted share of at least $1.78, an increase of at least 31 per cent.