* 4th-qtr sales, adjusted profit beats estimates
* International sales up 7 pct, with China up 20 pct
* Sees China sales rising 20 pct in fiscal 2015
* Says strongly committed to continue paying dividends
* Shares rise nearly 6 pct
(Adds details from conference call; updates shares)
Aug 5 Coach Inc, known for its Poppy
handbags, reported better-than-expected sales for the first time
in four quarters, helped by strong demand in international
markets, especially China.
New York-based Coach's shares rose nearly 6 percent in
morning trading after the company also said it was "strongly
committed" to paying a dividend, allaying analysts' concerns
about the sustainability of its payouts.
Coach, founded in 1941 in a Manhattan loft, is looking to
grow its brand of affordable luxury goods in Asia and Europe as
it loses ground in its biggest market, North America, to
fast-growing rivals such as Michael Kors Holdings Ltd.
While Coach sells its handbags, shoes and clothes at a
discount in North America, it commands full prices abroad.
That helped international sales rise 7 percent in the fourth
quarter ended June 28, with China sales rising 20 percent.
The company expects sales in China to rise 10 percent in the
year ending June 2015 as it opens more stores to expand in tier
3 and tier 4 cities.
Coach's results in China contrasted with those of LVMH
, the No.1 maker of luxury goods, which reported lower
sales from the region due to government efforts to crack down on
corruption and conspicuous spending.
WEAK NORTH AMERICA
Coach said it expects China sales to top $600 million in
fiscal 2015, higher than the $545 million a year earlier.
The growth in China will help Coach partly offset the weak
North American market, where the company expects sales to fall
in low double digits in percentage terms.
Coach's sales in North America fell 16 percent in the fourth
quarter, while same-store sales decreased for the fifth straight
time. In contrast, Michael Kors' sales rose 30 percent in North
America during the same period.
Coach in June outlined plans to shut about 70 stores in the
region, most of which will be in the first half of the year, and
cut discounted online sales to arrest the slide.
The company is also sprucing up its in-store presentations
by having more open, accessible and prominently branded
displays, CEO Victor Luis said on a conference call on Tuesday.
However, the store closures and inventory adjustment hit
fourth-quarter profit and is expected to impact the current
year's results as well.
Coach's net income fell 66 percent in the quarter. Excluding
items, it earned 59 cents per share.
Net sales fell 7 percent to $1.14 billion, dragged down by
the weak North American business, which contributed 61 percent
Analysts on an average had expected earnings of 53 cents on
revenue of $1.09 billion, according to Thomson Reuters I/B/E/S.
Coach's shares were up 5 percent at $35.94 on Tuesday.
Up to Monday's close, the stock has fallen 36 percent in the
last year compared with a 13.6 percent rise in the S&P 500
(Reporting by Sruthi Ramakrishnan in Bangalore; Editing by
Simon Jennings and Savio D'Souza)