Jim Trippon CPA

Last week, we reported that luxury leather goods maker Coach (NYSE: COH) was a strong candidate for a dividend increase when it delivered earnings results this Tuesday. After all, Coach announced its first-ever dividend in April 2009 when it reported earnings. The company's first annual payout amounted to just 30 cents and had the stock yielding just 0.70% recently. Nothing to get too excited about if you're an income investor, but Coach is taking steps to change that.

After a reporting a 32% jump in quarterly results on Tuesday, Coach also announced that it is doubling its dividend. That's a pretty good track record of dividend growth even though Coach doesn't have a long history as a dividend payer. The company said sales in North America grew by 5.1% during the quarter, but they grew by double digits in China.

As we've said before, Coach is a prodigious generator of cash and the company's balance sheet looks very sturdy indeed with just $24.2 million in debt and $907.7 million in cash at the end of the quarter. Some of that cash will fund the company's $1 billion share repurchase plan, which was also announced on Tuesday. Coach will repurchase the shares through June 30, 2012.

The broader luxury goods sector is looking very strong at this point and that may portend good things for the economy at large. Coach's dividend and buyback news follows in the footsteps of Tiffany (NYSE: TIF), which raised its dividend by 18% earlier this year and reinstated a $402 million repurchase plan.