Leading marketer of luxury leather goods Coach Inc on Tuesday reported an 80 per cent surge in fourth quarter net profit to $16.6 million from $9.2m last year thanks to soaring sales of its handbags in the US and Japan.

The New York-based company net sales for the period climbed 30 per cent to $171.4 million and for the full-year, net income rose 31 per cent to $88m before the impact of reorganisation charges related to factory closures in Florida and Puerto Rico.

Including the impact of these charges in both periods, net income was $85.8m, up 34 per cent from prior-year levels. Diluted earnings per share before the impact of the reorganisation charges rose 29 per cent to $0.97, versus $0.75 a year ago.

Gross margin in the quarter increased by 400 basis points on a year-over-year basis from 62.6 per cent to 66.6 per cent, while gross margin for the year expanded from 63.6 per cent to 67.2 per cent.

Coach said full-year net sales were up 20 per cent at $719.4m from $600.5m in 2001, and said it expects sales of $805m-$830m in fiscal 2003, and earnings of $1.13-$1.15 per share before one-off items, better than previous forecasts.

Chairman and CEO, Lew Frankfort, commented: "Naturally, I'm extremely pleased with our fiscal fourth quarter and full year 2002 results. Our strong top line growth reflects the rejuvenation of the Coach brand over the last several years.

"Further, our ability to execute our plans and exceed our financial goals, especially in light of the circumstances of the past year, reinforces the sustainability of our growth strategies and the talent and experience of the Coach management team."

He added his company sees first quarter sales of at least $180m, up 19 per cent on the year-ago period.