Update Coach (COH)

Looking for signs that the global consumer is back? You’ll find them in the third quarter fiscal 2010 earnings that Coach (COH) reported before the stock market opened on April 20.

The company announced earnings of 50 cents a share, 4 cents a share above Wall Street expectations, on revenue of $830.7 million. Wall Street had been projecting revenue of $811.5 million. Revenue grew by 12.3% from the third quarter of fiscal 2009. Gross margin climbed to 74.1% from 70.96% in the third quarter of fiscal 2009. Wall Street analysts had estimated margins at 72.53% for the quarter. The gross margin for the third quarter just about matches the 74.2% gross margin in the second quarter. To me it’s clear that Coach’s revamped product line and aggressive efforts to cut costs in its manufacturing system have paid off—and are sustainable.

The better than projected results came from both existing and new stores. Read more