Coach Profit Declines 29% As Sales Drop, Starts First Dividend set at 7.5 cents per Quarter

Coach (COH quote) shares jumped 12% to $20.41. Although the retailer's third-quarter profit fell 29%, the decline was less than Wall Street analysts had expected. The company saw an improvement in traffic and comparable-store-sales trends from the holiday quarter.

Coach also said it will begin paying a quarterly dividend of 7.5 cents a share on June 29 to shareholders of record as of June 8. The new dividend "reflects our financial strength and our confidence in Coach's business outlook," Frankfort said.

Coach's profit for the three months ended March 28 fell to $114.9 million, or 36 cents per share, from $162.4 million, or 46 cents per share last year. Excluding charges related to its cost-cutting plan, profit was 38 cents per share -- 2 cents better than analysts expected.

Revenue edged down less than 1 percent to $739.9 million from $744.5 million. That was better than the $711.4 million analysts predicted.

Coach shares rose $2.77 to $21 in morning trading. They have traded between $11.41 and $37.64 during the past 52 weeks.

Disclosure I do not own coh.