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Coach Beats Earnings on Strong China Sales, Hikes Dividend

Adam Jeffery | CNBC

Coach reported higher-than-expected quarterly results and raised its annual dividend, sending shares of the upscale leather goods maker sharply higher.

(Click here to track the latest quotes for the company's shares.)

The new dividend of $1.35 per share is 13 percent higher than its previous payout, the company said.

Coach, which sells handbags for as much as $1,200, is expanding into Asia as it shifts from a maturing U.S. market that recorded a 2 percent decline in same-store sales during the important holiday season quarter.

However, in the latest quarter to March, the company reported a 1 percent rise in same-store sales in North America. Overall sales in the region, including online sales, rose 7 percent.

International sales rose 6 percent to $382 million in the quarter, driven by a 40 percent rise in sales in China.

Overall revenue rose 7 percent to $1.19 billion in the third quarter, beating the average analyst forecast of $1.18 billion, according to Thomson Reuters I/B/E/S.

Net income rose to $239 million, or 84 cents per share, for the quarter ended March 30 from $225 million, or 77 cents per share, a year earlier.

Analysts on average expected the company to report per share earnings of 80 cents.

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