Onward, Coach!

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If you thought consumers would be all shopped out for the holidays, and that such retailers as Coach (NYSE: COH) might suffer winter sales doldrums, think again. It looks like lots of handbags and other leatherware were wrapped up for Valentine's Day sweethearts, because the retailer upped its earnings guidance today for the second half of the year.

Coach now expects earnings of $0.58 per diluted share, compared to last year's $0.33 per share, for the second half of the year, with sales of at least $615 million. Previous guidance suggested that earnings would come in at $0.48 per share, with $595 million in sales. For all of 2004, the company expects to deliver earnings of $1.24 per share, with sales of almost $1.3 billion.

Although third- and fourth-quarter earnings are expected to come in at $0.26 per share -- flat on a sequential basis -- analysts had previously expected earnings of $0.25 and $0.24 per share, respectively. Coach expects third- and fourth-quarter sales of $300 million and $315 million.

The news is hardly surprising, for anyone following Coach; upping guidance seems to be one of its pastimes. The company has been a consistent earnings performer, even against such odds as the recent recession. It said today that same-store sales in Japan -- an important growth region for Coach -- continue to perform strongly, with double-digit gains in Asia.

Last month, Coach posted an impressive second quarter, but the classy purse purveyor's high share price still leaves plenty to be desired. While the stock enjoyed a boost in pre-session trading, investors suddenly lost interest this morning. While Coach shoppers have an insatiable taste for nice things, the stock's still trading at about 30 times forward earnings and darn near its 52-week high. If investors snubbed the news, it's likely Coach shares still feel a bit too rich for many people's taste.

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Alyce Lomax does not own shares of any companies mentioned.