Good results for Coach

China now accounts for only about 3% of Coach's sales, but the company expect that the middle of the decade, that could rise to 10%, or about $500 million.

Coach said sales rose 22.2% to $950.5 million in its fourth quarter, while analysts had forecast sales of $888.87 million. The period included an extra week, without which Coach said sales would have been up 13%.

Sales at North American stores open at least a year rose 6.3% during the quarter.

Coach are confident that their sales and profits could continue to rise at a double-digit pace, aided by global expansion in places such as China and Western Europe, where Coach is just entering the market.

For the fiscal year that just ended, retail sales in China doubled. Coach has 41 stores in China as of July 3, and has plans to open another 30 locations there this fiscal year.

Coach reported shipments in its wholesale business to US department stores were flat during the quarter compared with a year earlier. Coach's efforts to expand its outlets have boosted sales and profits in North America, and more than made up for any stagnation in department store sales. Coach operates 342 retail stores and 121 factory outlets in North America.

Coach's gross margins rose 2.9% points to 73.3%, in part because of a drop in leather prices. However, Coach expect the costs of raw materials to edge upward.

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