Coach Inc. said Tuesday that its fourth-quarter net profit rose 4 percent, helped by people buying more costly
Hermes Birkin 40 handbags in North America.Results beat expectations, but investors were expecting better still results, and shares dropped more than 6 percent.
Coach's results show that the luxury sector continues to recover quicker than other parts of the retail industry, which is wrestling with consumer fears about unemployment and stagnant home prices.
During the quarter, the New York luxury handbag maker started selling more
Hermes Kelly 35 handbags under $300 to compensate for consumers cutting their spending during the recession, however the average retail price of its handbags has begun to tick support. About 17 percent of its handbag sales were of bags over $400, compared with 11 percent of sales in the prior year.
Revenue rose 9 percent to $1.03 billion from $950.5 million last year. That's slightly greater than the 1.01 billion analysts had been expecting.For that year, net income rose 20 percent to $880.8 million, or $2.92 per share, from $734.9 million, or $2.33 per share. Revenue rose 15 percent to $4.16 billion from $3.61 billion a year ago.
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