In a large bowl, whisk together the coconut milk and sugar, until the sugar is dissolved. Stir in the coconut extract and 1 1/4 cups coconut.
Chill in the freezer, stirring occasionally until hardened, or prepare in an ice cream maker according to the manufacturer's directions. (I have a Krups ice cream machine, and it took about 30 minutes.)
Meanwhile, in a skillet over medium heat, toast the remaining 1/4 cup coconut, stirring occasionally. Do not walk away, the coconut can quickly burn. Remove from pan and set aside.
Top ice cream with toasted coconut before serving.