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GuruFocus Financial Strength Rank measures how strong a company’s financial situation is. It is based on these factors

1. The debt burden that the company has as measured by its Interest coverage (current year).
2. Debt to revenue ratio. The lower, the better
3. Altman Z-score.

A company ranks high with financial strength is likely to withstand any business slowdowns and recessions.

Financial Strength : 7/10

vs
industry
vs
history
Cash to Debt 1647.08
COH's Cash to Debt is ranked higher than
81% of the 1083 Companies
in the Global Luxury Goods industry.

( Industry Median: 2.50 vs. COH: 1647.08 )
COH' s 10-Year Cash to Debt Range
Min: 0.01   Max: No Debt
Current: 1647.08

Equity to Asset 0.69
COH's Equity to Asset is ranked higher than
85% of the 1073 Companies
in the Global Luxury Goods industry.

( Industry Median: 0.52 vs. COH: 0.69 )
COH' s 10-Year Equity to Asset Range
Min: 0.45   Max: 0.81
Current: 0.69

0.45
0.81
F-Score: 6
Z-Score: 10.36
M-Score: -2.53
GuruFocus Profitability Rank ranks how profitable a company is and how likely the company’s business will stay that way. It is based on these factors:

1. Operating Margin
2. Trend of the Operating Margin (5-year average). The company with an uptrend profit margin has a higher rank.
••3. Consistency of the profitability
4. Piotroski F-Score
5. Predictability Rank•

The maximum rank is 10. A rank of 7 or higher means a higher profitability and may stay that way. A rank of 3 or lower indicates that the company has had trouble to make a profit.

Profitability Rank is not directly related to the Financial Strength Rank. But if a company is consistently profitable, its financial strength will be stronger.

Profitability & Growth : 9/10

vs
industry
vs
history
Operating margin (%) 30.04
COH's Operating margin (%) is ranked higher than
98% of the 1074 Companies
in the Global Luxury Goods industry.

( Industry Median: 5.56 vs. COH: 30.04 )
COH' s 10-Year Operating margin (%) Range
Min: 3.89   Max: 38.03
Current: 30.04

3.89
38.03
Net-margin (%) 20.38
COH's Net-margin (%) is ranked higher than
97% of the 1073 Companies
in the Global Luxury Goods industry.

( Industry Median: 3.91 vs. COH: 20.38 )
COH' s 10-Year Net-margin (%) Range
Min: 3.34   Max: 25.4
Current: 20.38

3.34
25.4
ROE (%) 42.94
COH's ROE (%) is ranked higher than
98% of the 1056 Companies
in the Global Luxury Goods industry.

( Industry Median: 9.28 vs. COH: 42.94 )
COH' s 10-Year ROE (%) Range
Min: 8.23   Max: 54.62
Current: 42.94

8.23
54.62
ROA (%) 29.29
COH's ROA (%) is ranked higher than
99% of the 1072 Companies
in the Global Luxury Goods industry.

( Industry Median: 4.70 vs. COH: 29.29 )
COH' s 10-Year ROA (%) Range
Min: 5.93   Max: 34.84
Current: 29.29

5.93
34.84
ROC (Joel Greenblatt) (%) 167.75
COH's ROC (Joel Greenblatt) (%) is ranked higher than
97% of the 1073 Companies
in the Global Luxury Goods industry.

( Industry Median: 20.54 vs. COH: 167.75 )
COH' s 10-Year ROC (Joel Greenblatt) (%) Range
Min: 45.14   Max: 193.41
Current: 167.75

45.14
193.41
Revenue Growth (%) 15.80
COH's Revenue Growth (%) is ranked higher than
89% of the 785 Companies
in the Global Luxury Goods industry.

( Industry Median: 6.50 vs. COH: 15.80 )
COH' s 10-Year Revenue Growth (%) Range
Min: 0   Max: 28.8
Current: 15.8

0
28.8
EBITDA Growth (%) 13.40
COH's EBITDA Growth (%) is ranked higher than
79% of the 669 Companies
in the Global Luxury Goods industry.

( Industry Median: 9.40 vs. COH: 13.40 )
COH' s 10-Year EBITDA Growth (%) Range
Min: 11.1   Max: 84.6
Current: 13.4

11.1
84.6
EPS Growth (%) 15.70
COH's EPS Growth (%) is ranked higher than
78% of the 619 Companies
in the Global Luxury Goods industry.

( Industry Median: 11.30 vs. COH: 15.70 )
COH' s 10-Year EPS Growth (%) Range
Min: 10.4   Max: 60.9
Current: 15.7

10.4
60.9
» COH's 10-Y Financials

Financials


Revenue & Net Income
Cash & Debt
Oprt. Cash Flow & Free Cash Flow

» Details

Guru Trades

Q2 2013

COH Guru Trades in Q2 2013

Steven Cohen 84,903 sh (New)
James Barrow 102,400 sh (New)
Dodge & Cox 6,736,200 sh (New)
Steve Mandel 5,858,347 sh (New)
Jim Simons 853,800 sh (+3889.72%)
John Rogers 928,907 sh (+17.67%)
David Rolfe 2,624,036 sh (+15.05%)
Joel Greenblatt 138,460 sh (+2.95%)
Jeff Auxier 68,750 sh (+0.15%)
John Hussman 3,000 sh (unchged)
Ray Dalio Sold Out
Paul Tudor Jones Sold Out
Chuck Royce Sold Out
Pioneer Investments 872,661 sh (-0.28%)
Jeremy Grantham 421,614 sh (-2.5%)
Robert Olstein 149,000 sh (-11.31%)
Meridian Funds 353,000 sh (-18.1%)
Whitney Tilson 40,000 sh (-25.23%)
Zeke Ashton 62,500 sh (-26.47%)
Ken Fisher 5,935 sh (-31.5%)
» More
Q3 2013

COH Guru Trades in Q3 2013

Chuck Royce 58,400 sh (New)
Joel Greenblatt 400,563 sh (+189.3%)
Zeke Ashton 127,200 sh (+103.52%)
Jim Simons 1,380,300 sh (+61.67%)
Dodge & Cox 10,324,217 sh (+53.26%)
John Rogers 1,110,148 sh (+19.51%)
David Rolfe 3,037,439 sh (+15.75%)
Steve Mandel 6,481,247 sh (+10.63%)
Robert Olstein 159,000 sh (+6.71%)
James Barrow 103,900 sh (+1.46%)
Ken Fisher 5,950 sh (+0.25%)
Jeff Auxier 68,750 sh (unchged)
Whitney Tilson Sold Out
Jeremy Grantham 372,628 sh (-11.62%)
John Hussman 2,500 sh (-16.67%)
Pioneer Investments 621,514 sh (-28.78%)
Steven Cohen 26,712 sh (-68.54%)
» More
Q4 2013

COH Guru Trades in Q4 2013

Caxton Associates 54,100 sh (New)
John Griffin 2,420,000 sh (New)
John Hussman 9,500 sh (+280%)
Dodge & Cox 15,101,203 sh (+46.27%)
John Rogers 1,391,461 sh (+25.34%)
Chuck Royce 69,000 sh (+18.15%)
David Rolfe 3,203,502 sh (+5.47%)
Joel Greenblatt 414,056 sh (+3.37%)
Robert Olstein 159,000 sh (unchged)
Steve Mandel 6,481,247 sh (unchged)
Jeff Auxier 68,750 sh (unchged)
James Barrow 103,200 sh (-0.67%)
Jeremy Grantham 353,174 sh (-5.22%)
Ken Fisher 5,465 sh (-8.15%)
Pioneer Investments 542,601 sh (-12.7%)
Steven Cohen 21,153 sh (-20.81%)
Zeke Ashton 80,000 sh (-37.11%)
Jim Simons 770,700 sh (-44.16%)
» More
Q1 2014

COH Guru Trades in Q1 2014

Brian Rogers 1,750,000 sh (New)
» More
» Details

Insider Trades

Latest Guru Trades with COH

GuruDate Trades Impact to Portfolio Price Range * (?) Current Price Change from Average Current Shares
John Griffin 2013-12-31 New Buy1.4%$48.55 - $57.9 $ 49.25-9%2420000
Dodge & Cox 2013-12-31 Add 46.27%0.28%$48.55 - $57.9 $ 49.25-9%15101203
John Hussman 2013-12-31 Add 280%0.03%$48.55 - $57.9 $ 49.25-9%9500
Joel Greenblatt 2013-09-30 Add 189.3%0.46%$51.85 - $59.55 $ 49.25-10%400563
Dodge & Cox 2013-09-30 Add 53.26%0.22%$51.85 - $59.55 $ 49.25-10%10324217
Steve Mandel 2013-09-30 Add 10.63%0.15%$51.85 - $59.55 $ 49.25-10%6481247
Steve Mandel 2013-06-30 New Buy1.6%$49.93 - $59.6 $ 49.25-12%5858347
Dodge & Cox 2013-06-30 New Buy0.46%$49.93 - $59.6 $ 49.25-12%6736200
Meridian Funds 2013-06-30 Reduce -18.1%0.14%$49.93 - $59.6 $ 49.25-12%353000
Ray Dalio 2013-06-30 Sold Out 0.1%$49.93 - $59.6 $ 49.25-12%0
James Barrow 2013-06-30 New Buy0.01%$49.93 - $59.6 $ 49.25-12%102400
Frank Sands 2013-03-31 Sold Out 2.4%$46.5 - $61.8 $ 49.25-4%0
Joel Greenblatt 2013-03-31 Add 118.32%0.18%$46.5 - $61.8 $ 49.25-4%134489
Ray Dalio 2013-03-31 Add 69.49%0.04%$46.5 - $61.8 $ 49.25-4%220622
John Hussman 2013-03-31 New Buy0.01%$46.5 - $61.8 $ 49.25-4%3000
Mario Gabelli 2013-03-31 Sold Out 0.0016%$46.5 - $61.8 $ 49.25-4%0
Premium More recent guru trades are included for Premium Members only!!
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Guru Investment Theses on Coach, Inc.

David Rolfe Comments on Coach - Oct 22, 2013

Coach (COH)

Coach's stock retreated from gains experienced during the 2 nd Quarter as the Company's same store sales (SSS) in North America disappointed the market. While we pay attention to the trajectory of North American SSS, we are more interested in the Company's consolidated growth and profitability. We think Coach continues to have robust opportunity on both scores as they penetrate markets that are underserved by affordable luxury players and also expand the brand into new product categories in more established markets. We think the Company's peer-leading profitability will be maintained as it continues to own and operate the distribution fronts for nearly 90% of its revenue, a quarter of which we estimate is generated in markets where western luxury competitors have little or no presence, due to a lack of brand awareness and/or distribution capabilities.

From David Rolfe's Wedgewood Partners third quarter 2013 commentary.


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Wedgewood Partners Comments on Coach - Apr 10, 2013

Despite Coach (COH)'s weak revenue results reported for the holiday quarter, the Company managed to maintain its core profitability profile, which we think is a particularly rare attribute in retailing, and is a testament to the strength of the Coach brand. As more apparel-­‐focused retailers enter the handbag market, Coach is countering by expanding into more "lifestyle" based products, including ready-­‐to-­‐ wear, footwear, fragrance and watches (to name a few). While much of consensus is concerned that the Company's profitability will be hampered by these new categories, we think the bulk of any incremental costs, particularly distribution, are already "sunk" in the Coach-­‐owned and operated, world-­‐wide distribution footprint -­‐ which includes over 900 branded full-­‐price stores and outlets. In fact, almost 90% of Coach's sales are derived from its stores and website, so we believe that allocating incremental store space to lifestyle will require minimal incremental investment. For instance, the Company can give employees portable point-­‐of-­‐sales units and convert checkout counter space into product floor space. This is in stark contrast to branded competitors that typically rely on wholesale distribution channels. These brands have a very limited amount of space to utilize so it is very difficult to roll out incremental products without displacing an established competitor, which would probably require larger up-­‐front pricing concessions to the wholesaler. Of course, a company can certainly do well by expanding via this route, but wholesale distribution is extremely competitive (Coach management drily refers to the floor of a wholesaler as "the wilderness"). Without having to rely on wholesale, Coach is less susceptible to the same competitive pressures that many of its peers would face attempting this sort of product expansion.

Although Coach's near-­‐term growth trajectory has disappointed markets, we are confident that the Company has robust enough prospects for double-­‐digit growth -­‐ particularly in markets where there is an expanding middle class, such as tier-­‐2 and tier-­‐3 cities in China. For Coach, these markets offer higher margins and growth prospects compared to developed markets, since traditional competitors, including boutique designers as well as high-­‐end brands, are sparse. As the stock continues to trade towards a historically low earnings multiple, we continue to believe that Coach's substantial competitive edge and growth prospects are not being recognized by the market and we, in turn, will look to add to positions on pullbacks.

From Wedgewood Partners’ first quarter 2013 investor letter.


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David Rolfe's Wedgewood Partners Comments on Coach - Nov 12, 2012

In July 2012, we initiated positions in Coach (COH) as we are convinced that the Company managed to solidify its competitive edge, evidenced by the fact that they have maintained a return on invested capital far superior to its competitive peer group of publicly traded suppliers, rivals & substitutes. The Company’s competitive edge has been strengthened over the past decade as Coach has maintained rigorous contact with consumers, interviewing tens of thousands per year. Of course, this helps with short-term fashion trends, but more importantly and more sustainably, we think this helped Coach understand that luxury consumers were less interested in exclusivity related to physical shortages of a product and more interested in exclusivity related to “virtual rarity” – or the abstract feelings of privilege and of exclusivity. Elements like country of origin and even the quality of materials have been deemphasized in favor of accessibility.1 As a result, Coach now manufactures about 75% of its products in China, which reduces cost of goods relative to European and American made luxury products. Further, Coach sells 90% of its products through direct channels which protects gross margins from the pricing pressures of wholesalers. Prior to the Coach acquisition, the Fund lacked a holding that was focused on retail apparel and accessories, so we think this position adds diversity.

Coach exhibited most of our process factors as early as 2008, but at any one time, our list of potential holdings that exhibit four out of five factors, usually hovers in a range of about 15 to 25 names, with the majority of those names exhibiting an unattractive valuation. But valuation is a very dynamic element and it can change especially rapidly in volatile markets. On the other hand, during market rallies or other periods of market placidity, the valuations of our potential ideas generally maintain their unattractiveness.

From Wedgewood Partners Third Quarter 2012 Review and Outlook.


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Top Ranked Articles about Coach, Inc.

Weekly Three-Year Low Highlight: COH, GLPI, AUO, JCP
According to GuruFocus list of three-year lows; Coach Inc., Gaming and Leisure Properties Inc., AU Optronics Corporation and J.C. Penney Co. Inc. have all reached their three-year lows. Read more...
Coach, Waters, Netflix - ‘Biggest Losers’ Held by Gurus
Over 12 months, Coach Inc. (COH) is down 16%, Waters Corporation (WAT) is up 26% and Netflix Inc. (NFLX) is up 451%. All three companies are among the "Biggest Losers" in the S&P 500. Coach Inc. just reported that while its North American and international sales are down 1% year-over-year, the company is rapidly expanding in mainland China where sales are up 35% for the quarter. Read more...
David Rolfe Comments on Coach
Coach (COH) Read more...
Finding Value in Coach (COH)
Background Read more...

Ratios

vs
industry
vs
history
P/E(ttm) 14.30
COH's P/E(ttm) is ranked higher than
74% of the 885 Companies
in the Global Luxury Goods industry.

( Industry Median: 17.70 vs. COH: 14.30 )
COH' s 10-Year P/E(ttm) Range
Min: 5.65   Max: 44.86
Current: 14.3

5.65
44.86
P/B 5.50
COH's P/B is ranked lower than
69% of the 1036 Companies
in the Global Luxury Goods industry.

( Industry Median: 1.70 vs. COH: 5.50 )
COH' s 10-Year P/B Range
Min: 2.46   Max: 14.87
Current: 5.5

2.46
14.87
P/S 2.80
COH's P/S is ranked lower than
81% of the 1100 Companies
in the Global Luxury Goods industry.

( Industry Median: 0.73 vs. COH: 2.80 )
COH' s 10-Year P/S Range
Min: 1.21   Max: 8.52
Current: 2.8

1.21
8.52
PFCF 15.00
COH's PFCF is ranked higher than
71% of the 593 Companies
in the Global Luxury Goods industry.

( Industry Median: 19.33 vs. COH: 15.00 )
COH' s 10-Year PFCF Range
Min: 6.63   Max: 39.84
Current: 15

6.63
39.84
EV-to-EBIT 9.20
COH's EV-to-EBIT is ranked higher than
76% of the 965 Companies
in the Global Luxury Goods industry.

( Industry Median: 13.30 vs. COH: 9.20 )
COH' s 10-Year EV-to-EBIT Range
Min: 3.2   Max: 26.6
Current: 9.2

3.2
26.6
PEG 0.90
COH's PEG is ranked higher than
74% of the 521 Companies
in the Global Luxury Goods industry.

( Industry Median: 1.29 vs. COH: 0.90 )
COH' s 10-Year PEG Range
Min: 0.19   Max: 1.83
Current: 0.9

0.19
1.83
Shiller P/E 16.20
COH's Shiller P/E is ranked higher than
73% of the 541 Companies
in the Global Luxury Goods industry.

( Industry Median: 21.42 vs. COH: 16.20 )
COH' s 10-Year Shiller P/E Range
Min: 8.19   Max: 64.91
Current: 16.2

8.19
64.91

Dividend & Buy Back

vs
industry
vs
history
Dividend Yield 2.70
COH's Dividend Yield is ranked higher than
69% of the 743 Companies
in the Global Luxury Goods industry.

( Industry Median: 2.03 vs. COH: 2.70 )
COH' s 10-Year Dividend Yield Range
Min: 0.25   Max: 2.76
Current: 2.7

0.25
2.76
Dividend Payout 0.38
COH's Dividend Payout is ranked higher than
75% of the 645 Companies
in the Global Luxury Goods industry.

( Industry Median: 0.32 vs. COH: 0.38 )
COH' s 10-Year Dividend Payout Range
Min: 0.1   Max: 0.44
Current: 0.38

0.1
0.44
Dividend growth (3y) 48.90
COH's Dividend growth (3y) is ranked higher than
97% of the 394 Companies
in the Global Luxury Goods industry.

( Industry Median: 7.70 vs. COH: 48.90 )
COH' s 10-Year Dividend growth (3y) Range
Min: 0   Max: 135.1
Current: 48.9

0
135.1
Yield on cost (5-Year) 71.93
COH's Yield on cost (5-Year) is ranked higher than
100% of the 768 Companies
in the Global Luxury Goods industry.

( Industry Median: 2.34 vs. COH: 71.93 )
COH' s 10-Year Yield on cost (5-Year) Range
Min: 6.66   Max: 73.53
Current: 71.93

6.66
73.53
Share Buyback Rate 3.20
COH's Share Buyback Rate is ranked higher than
92% of the 654 Companies
in the Global Luxury Goods industry.

( Industry Median: -0.60 vs. COH: 3.20 )
COH' s 10-Year Share Buyback Rate Range
Min: 5.8   Max: -9.1
Current: 3.2

Valuation & Return

vs
industry
vs
history
Price/Net Current Asset Value 101.80
COH's Price/Net Current Asset Value is ranked lower than
87% of the 326 Companies
in the Global Luxury Goods industry.

( Industry Median: 8.80 vs. COH: 101.80 )
COH' s 10-Year Price/Net Current Asset Value Range
Min: 19.87   Max: 859.2
Current: 101.8

19.87
859.2
Price/Tangible Book 6.60
COH's Price/Tangible Book is ranked lower than
74% of the 953 Companies
in the Global Luxury Goods industry.

( Industry Median: 2.00 vs. COH: 6.60 )
COH' s 10-Year Price/Tangible Book Range
Min: 4.26   Max: 15.69
Current: 6.6

4.26
15.69
Price/DCF (Projected) 0.90
COH's Price/DCF (Projected) is ranked higher than
75% of the 560 Companies
in the Global Luxury Goods industry.

( Industry Median: 1.20 vs. COH: 0.90 )
COH' s 10-Year Price/DCF (Projected) Range
Min: 0.64   Max: 4.04
Current: 0.9

0.64
4.04
Price/Median PS Value 0.60
COH's Price/Median PS Value is ranked higher than
89% of the 1025 Companies
in the Global Luxury Goods industry.

( Industry Median: 1.00 vs. COH: 0.60 )
COH' s 10-Year Price/Median PS Value Range
Min: 0.4   Max: 1.85
Current: 0.6

0.4
1.85
Price/Peter Lynch Fair Value 1.00
COH's Price/Peter Lynch Fair Value is ranked higher than
70% of the 324 Companies
in the Global Luxury Goods industry.

( Industry Median: 1.00 vs. COH: 1.00 )
COH' s 10-Year Price/Peter Lynch Fair Value Range
Min: 0.32   Max: 1.79
Current: 1

0.32
1.79
Price/Graham Number 2.00
COH's Price/Graham Number is ranked lower than
58% of the 788 Companies
in the Global Luxury Goods industry.

( Industry Median: 1.40 vs. COH: 2.00 )
COH' s 10-Year Price/Graham Number Range
Min: 1.21   Max: 5.12
Current: 2

1.21
5.12
Earnings Yield (Greenblatt) 10.90
COH's Earnings Yield (Greenblatt) is ranked higher than
77% of the 983 Companies
in the Global Luxury Goods industry.

( Industry Median: 7.40 vs. COH: 10.90 )
COH' s 10-Year Earnings Yield (Greenblatt) Range
Min: 3.8   Max: 31.1
Current: 10.9

3.8
31.1
Forward Rate of Return (Yacktman) 19.78
COH's Forward Rate of Return (Yacktman) is ranked higher than
84% of the 724 Companies
in the Global Luxury Goods industry.

( Industry Median: 10.57 vs. COH: 19.78 )
COH' s 10-Year Forward Rate of Return (Yacktman) Range
Min: 15.8   Max: 50
Current: 19.78

15.8
50

Business Description

Industry: Retail - Apparel & Specialty » Luxury Goods
Compare:LVMUY, CFRUY, HESAY, PPRUY, PRDSY » details
Traded in other countries:6388.Hongkong, COY.Germany
Coach, Inc., was incorporated in the state of Maryland in June 2000. The Company is a marketer of fine accessories and gifts for women and men. Its product offerings include women's and men's bags, accessories, business cases, footwear, wearables, jewelry, sunwear, travel bags, watches and fragrance. It operates in two segments namely Direct-to-Consumer and Indirect. The Direct-to-Consumer segment includes sales to consumers through Coach-operated stores in North America; Japan; Hong Kong, Macau and mainland China; Taiwan; Singapore and the Internet. Beginning with the first quarter of fiscal 2013, this segment also includes Coach-operated stores in Malaysia and Korea. The Indirect segment includes sales to wholesale customers and distributors in 25 countries, including the United States, and royalties earned on licensed product. The Company faces competition from European and American luxury brands as well as private label retailers, including some of its wholesale customers. Its imported products are subject to existing or potential duties, tariffs or quotas that may limit the quantity of products that it may import into the U.S. and other countries or may impact the cost of such products.

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