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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 3.68
COH's Cash to Debt is ranked higher than
73% of the 1126 Companies
in the Global Luxury Goods industry.

( Industry Median: 2.13 vs. COH: 3.68 )
COH' s 10-Year Cash to Debt Range
Min: 0.01   Max: No Debt
Current: 3.68

Equity to Asset 0.67
COH's Equity to Asset is ranked higher than
85% of the 1117 Companies
in the Global Luxury Goods industry.

( Industry Median: 0.50 vs. COH: 0.67 )
COH' s 10-Year Equity to Asset Range
Min: 0.45   Max: 0.81
Current: 0.67

0.45
0.81
F-Score: 5
Z-Score: 7.64
M-Score: -2.43
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 : 8/10

vs
industry
vs
history
Operating margin (%) 30.04
COH's Operating margin (%) is ranked higher than
98% of the 1081 Companies
in the Global Luxury Goods industry.

( Industry Median: 5.46 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 1081 Companies
in the Global Luxury Goods industry.

( Industry Median: 3.54 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 1063 Companies
in the Global Luxury Goods industry.

( Industry Median: 9.36 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 1079 Companies
in the Global Luxury Goods industry.

( Industry Median: 4.38 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 1078 Companies
in the Global Luxury Goods industry.

( Industry Median: 20.96 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
91% of the 982 Companies
in the Global Luxury Goods industry.

( Industry Median: 5.30 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
83% of the 806 Companies
in the Global Luxury Goods industry.

( Industry Median: 6.10 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
81% of the 775 Companies
in the Global Luxury Goods industry.

( Industry Median: 7.20 vs. COH: 15.70 )
COH' s 10-Year EPS Growth (%) Range
Min: 10.4   Max: 58.7
Current: 15.7

10.4
58.7
» COH's 10-Y Financials

Financials


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

» Details

Guru Trades

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%)
Mario Cibelli 65,000 sh (unchged)
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)
Mario Cibelli 65,000 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)
David Dreman 7,776 sh (New)
Jeremy Grantham 963,311 sh (+172.76%)
James Barrow 266,285 sh (+158.03%)
John Griffin 4,330,000 sh (+78.93%)
John Rogers 1,576,003 sh (+13.26%)
David Rolfe 3,560,821 sh (+11.15%)
Robert Olstein 176,000 sh (+10.69%)
Dodge & Cox 16,061,130 sh (+6.36%)
Chuck Royce 73,000 sh (+5.8%)
Jeff Auxier 68,750 sh (unchged)
John Hussman 9,500 sh (unchged)
Jim Simons Sold Out
Pioneer Investments Sold Out
Mario Cibelli Sold Out
Caxton Associates Sold Out
Zeke Ashton 70,000 sh (-12.5%)
Ken Fisher 4,340 sh (-20.59%)
Joel Greenblatt 265,110 sh (-35.97%)
Steven Cohen 6,494 sh (-69.3%)
Steve Mandel 1,569,635 sh (-75.78%)
» More
Q2 2014

COH Guru Trades in Q2 2014

Brian Rogers 2,000,000 sh (+14.29%)
Ken Fisher Sold Out
» More
» Details

Insider Trades

Latest Guru Trades with COH

(List those with share number changes of more than 20%, or impact to portfolio more than 0.1%)

GuruDate Trades Impact to Portfolio Price Range * (?) Current Price Change from Average Current Shares
Mario Cibelli 2014-03-31 Sold Out 1.9%$45.41 - $56.39 $ 34.77-30%0
Steve Mandel 2014-03-31 Reduce -75.78%1.21%$45.41 - $56.39 $ 34.77-30%1569635
John Griffin 2014-03-31 Add 78.93%1.06%$45.41 - $56.39 $ 34.77-30%4330000
Joel Greenblatt 2014-03-31 Reduce -35.97%0.2%$45.41 - $56.39 $ 34.77-30%265110
David Dreman 2014-03-31 New Buy0.03%$45.41 - $56.39 $ 34.77-30%7776
James Barrow 2014-03-31 Add 158.03%0.01%$45.41 - $56.39 $ 34.77-30%266285
John Griffin 2013-12-31 New Buy1.4%$48.55 - $57.9 $ 34.77-36%2420000
Dodge & Cox 2013-12-31 Add 46.27%0.28%$48.55 - $57.9 $ 34.77-36%15101203
John Hussman 2013-12-31 Add 280%0.03%$48.55 - $57.9 $ 34.77-36%9500
Joel Greenblatt 2013-09-30 Add 189.3%0.46%$51.85 - $59.55 $ 34.77-37%400563
Dodge & Cox 2013-09-30 Add 53.26%0.22%$51.85 - $59.55 $ 34.77-37%10324217
Steve Mandel 2013-09-30 Add 10.63%0.15%$51.85 - $59.55 $ 34.77-37%6481247
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 - Jul 25, 2014

Coach (COH) shares significantly declined during the quarter and have been a relative detractor since we first began purchasing shares in July 2012. With clearer hindsight, where did we go wrong on our initial timing? Our view then was that the Company's lackluster North American sales slump was largely due to a pause in creative new product. Thus, our initial investment in these shares came far too early in the Company's efforts to reinvigorate their iconic brand.

Of course, the journey in our ownership in Coach, thus far, has been long...and wrong. When we initiated Coach, we recognized that there was increasing competitive encroachment in the North American handbag and accessories market. However, we underestimated the aggressive expansion of Coach’s competitors, as well as the pernicious effects of brand underinvestment during the previous business cycle. The core risk of Coach has been centered on its North American business, which has been losing share over the past, roughly 3 years. Competitors Michael Kors, Kate Spade and Tory Burch have all successfully copied key aspects of the high return on capital Coach playbook, and now the original progenitor of "accessible luxury" now finds itself at the crossroads of not only redefining and rebuilding its own brand, but fighting off it's well entrenched progeny. We still think Coach has a sustainable competitive advantage, and we do not think that the competitive inroads of Coach's peer group are sustainable over the next 3 to 5 years.

In our view, the Company’s competitors have expanded too quickly and will soon reach a point of saturation. For instance, Michael Kors reported roughly $400 million in sales for its fiscal 2009; the Company recently guided to just above $4 billion in sales for the period ending June 2015 - a roughly ten-fold increase in just six years. For more perspective, consider the growth of the Company’s well-known peers: Burberry - an iconic affordable luxury brand that is over 100 years old - eclipsed $400 million in sales 2001. According to IBES estimates, the Company will surpass $4 billion in March 2017. In other words, it has taken Burberry, roughly 16 years to go from $400 million to $4 billion in sales. But that's actually about normal: Ralph Lauren took at least 15 years. Coach: 16 years. Hermes: 22 years, and Tiffany's: 25 years. All told, we think the exclusivity of the Kors value proposition is at risk, and therefore not sustainable.

We attended Coach's Investor Day last month in New York. Over the course of the Company's four-hour presentation we found ourselves nodding our head in agreement as the Company addressed mistakes and shortcomings in their current brand and marketing strategy. We agree too that the Company's comprehensive remedies are welcome news for frustrated shareholders. However, as we sat throughout the detailed presentations from all of the Company's top executives it became quite clear that the "fix” at Coach will be very expensive, inducing a sharp decline in the Company's earnings power over the next 12-18 months - and the projected brand and earnings renewal won't be quick. In fact, the fix will take a few years to fully complete in order for the Company to reclaim their once vaunted industry leading profitability.

While the effects of these competitive pressures and unforced-errors are being felt by shareholders today, we still think Coach’s steady-state earnings power over the next three to fives years will be significantly higher compared to what the business will earn over the next 12-18 months. Further, the Company’s international segment continues to grow at a robust pace, as their revenues represent still small share of each of their geographical addressable markets. We believe the success of the Company’s growth efforts in China and Europe, combined with flat market share in the more mature Japanese market, and a robust balance sheet, is enough to justify a substantial portion of the current market capitalization.

Several months ago, Coach embarked on an aggressive plan to reinvest in the brand and buttress its competitive positioning in North America. We think this is very necessary after years of underinvestment. This reinvestment plan has included the hiring of a new head of creative, and repositioning the brand by curtailing dilutive impressions, particularly by closing underperforming stores and online "flash-sales" as well as elevating flagship full-price stores to dictate Coach's value proposition of modern luxury. While these investments have hurt sales growth over the past 6 months and will continue to do so for the next 12 months, we think it will lead to a healthier brand impression and a much higher, sustainable level of earnings power in 3 to 5 years.

In our opinion, the Company's competitive positioning remains relatively unassailed in its international markets - especially in faster growing markets, such as Greater China. As the North American business remains challenged, we expect international will come to represent 40% or more of revenues.

We look at future earnings power, particularly over the next 3 to 5 years. While we underestimated the rate of competitive incursion and its effects on Coach's business in the near-term, we still think Coach has the ability to post earnings that are two to three times higher than trough earnings estimates, over the next 3 to 5 years. The Company's total addressable market is expanding at a robust mid to high-single digit rate and should be close to $50 billion in 5 years. We expect that the negative leverage from the Company's aggressive reinvestment will subside over the next 12 to 18 months, and double-digit earnings growth will resume.

Despite the planned sales declines and a dramatic increase in overhead (as a percent of revenues), Coach is still immensely profitable. This speaks to the Company's financial strength and competitive positioning. Currently, we estimate the market is assigning a $2.5 billion value to the Company's North American business - we expect sales in North America to bottom around a similar level, leading to a price to sales multiple of just 1X. We believe that a 1X price/sales is much too low for a Company that has a profitability profile and growth opportunities similar to Coach. That said, our valuation assumptions for North America are predicated on the continued success of Coach's international franchise. In addition, the Company remains dedicated to paying its current dividend, which is nearing a 4% yield. If Coach runs into difficulties overseas, there is a good chance we will move on, as the international business is the financial engine that will drive the near-term transformation in North America and support the Company's fortress balance sheet. Last, and as always, if we find a meaningfully more attractive risk-reward opportunity, we will sell Coach.

Philosophically, we expect stocks to track in-line with earnings growth, over a multi- year time horizon. We continue to think that the Company's aggressive reinvestment in the brand will yield earnings that are at least twice as high as today, particularly over the next 3 to 5 years. All told, we believe that the market has amply discounted the North American business at current prices and that the shares offer an excellent risk-reward profile at current valuations, so we added to positions.

From David Rolfe (Trades, Portfolio)’s Wedgewood Partners Second Quarter 2014 Client Letter.

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John Rogers Comments on Coach Inc. - May 07, 2014

A few of our holdings struggled at quarter end. Specialty retailing Coach, Inc. (COH) de clined –10.91% after missing expectations. The company reported EPS of $1.06 after making $1.23 per share last year. Consensus had been $1.11. The main culprit was lower traffic in retail stores. It has been a very difficult winter for many retailers, but for Coach the more important issue is its st yle turnaround. Stuart Vevers, the new creative director, has his first complete line appearing this spring and hitting stores next fall. As long- term investors, a six-month waiting period is not difficult, but obviously, Wall Street is less patient than we are. We believe the company will emerge with its brand largely intact, new products to captivate customers and better financial results to follow.



From John Rogers (Trades, Portfolio)' Ariel Appreciation Fund first quarter 2014 letter.

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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

David Rolfe Comments on Coach
Coach (COH) shares significantly declined during the quarter and have been a relative detractor since we first began purchasing shares in July 2012. With clearer hindsight, where did we go wrong on our initial timing? Our view then was that the Company's lackluster North American sales slump was largely due to a pause in creative new product. Thus, our initial investment in these shares came far too early in the Company's efforts to reinvigorate their iconic brand. Read more...
John Rogers Comments on Coach Inc.
A few of our holdings struggled at quarter end. Specialty retailing Coach, Inc. (COH) de clined –10.91% after missing expectations. The company reported EPS of $1.06 after making $1.23 per share last year. Consensus had been $1.11. The main culprit was lower traffic in retail stores. It has been a very difficult winter for many retailers, but for Coach the more important issue is its st yle turnaround. Stuart Vevers, the new creative director, has his first complete line appearing this spring and hitting stores next fall. As long- term investors, a six-month waiting period is not difficult, but obviously, Wall Street is less patient than we are. We believe the company will emerge with its brand largely intact, new products to captivate customers and better financial results to follow. Read more...
Weekly Insider Sells Highlight: TWTR, COH, UTIW, PINC, ELX
According to GuruFocus list of 3-year lows; Twitter Inc, Coach Inc, UTi Worldwide Inc, Premier Inc, and Emulex Corp have all reached their 3-year lows. Read more...
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...

Ratios

vs
industry
vs
history
P/E(ttm) 10.60
COH's P/E(ttm) is ranked higher than
91% of the 1171 Companies
in the Global Luxury Goods industry.

( Industry Median: 22.10 vs. COH: 10.60 )
COH' s 10-Year P/E(ttm) Range
Min: 5.65   Max: 44.86
Current: 10.6

5.65
44.86
P/B 4.00
COH's P/B is ranked higher than
51% of the 1171 Companies
in the Global Luxury Goods industry.

( Industry Median: 1.90 vs. COH: 4.00 )
COH' s 10-Year P/B Range
Min: 2.46   Max: 14.87
Current: 4

2.46
14.87
P/S 2.01
COH's P/S is ranked lower than
51% of the 1171 Companies
in the Global Luxury Goods industry.

( Industry Median: 0.80 vs. COH: 2.01 )
COH' s 10-Year P/S Range
Min: 1.21   Max: 8.52
Current: 2.01

1.21
8.52
PFCF 12.40
COH's PFCF is ranked higher than
89% of the 1171 Companies
in the Global Luxury Goods industry.

( Industry Median: 36.66 vs. COH: 12.40 )
COH' s 10-Year PFCF Range
Min: 6.63   Max: 39.84
Current: 12.4

6.63
39.84
EV-to-EBIT 6.68
COH's EV-to-EBIT is ranked higher than
92% of the 1171 Companies
in the Global Luxury Goods industry.

( Industry Median: 16.27 vs. COH: 6.68 )
COH' s 10-Year EV-to-EBIT Range
Min: 3.2   Max: 26.7
Current: 6.68

3.2
26.7
PEG 0.70
COH's PEG is ranked higher than
92% of the 1171 Companies
in the Global Luxury Goods industry.

( Industry Median: 6.75 vs. COH: 0.70 )
COH' s 10-Year PEG Range
Min: 0.19   Max: 1.83
Current: 0.7

0.19
1.83
Shiller P/E 11.40
COH's Shiller P/E is ranked higher than
93% of the 1171 Companies
in the Global Luxury Goods industry.

( Industry Median: 9999.00 vs. COH: 11.40 )
COH' s 10-Year Shiller P/E Range
Min: 8.14   Max: 64.08
Current: 11.4

8.14
64.08
Current Ratio 2.27
COH's Current Ratio is ranked higher than
81% of the 1120 Companies
in the Global Luxury Goods industry.

( Industry Median: 1.61 vs. COH: 2.27 )
COH' s 10-Year Current Ratio Range
Min: 1.24   Max: 4.69
Current: 2.27

1.24
4.69
Quick Ratio 1.53
COH's Quick Ratio is ranked higher than
85% of the 1120 Companies
in the Global Luxury Goods industry.

( Industry Median: 0.87 vs. COH: 1.53 )
COH' s 10-Year Quick Ratio Range
Min: 0.42   Max: 3.79
Current: 1.53

0.42
3.79

Dividend & Buy Back

vs
industry
vs
history
Dividend Yield 3.88
COH's Dividend Yield is ranked higher than
85% of the 780 Companies
in the Global Luxury Goods industry.

( Industry Median: 1.93 vs. COH: 3.88 )
COH' s 10-Year Dividend Yield Range
Min: 0.25   Max: 3.95
Current: 3.88

0.25
3.95
Dividend Payout 0.41
COH's Dividend Payout is ranked higher than
86% of the 1171 Companies
in the Global Luxury Goods industry.

( Industry Median: 9999.00 vs. COH: 0.41 )
COH' s 10-Year Dividend Payout Range
Min: 0.1   Max: 0.5
Current: 0.41

0.1
0.5
Dividend growth (3y) 48.90
COH's Dividend growth (3y) is ranked higher than
97% of the 572 Companies
in the Global Luxury Goods industry.

( Industry Median: 4.60 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) 103.90
COH's Yield on cost (5-Year) is ranked higher than
99% of the 799 Companies
in the Global Luxury Goods industry.

( Industry Median: 2.22 vs. COH: 103.90 )
COH' s 10-Year Yield on cost (5-Year) Range
Min: 6.66   Max: 105.23
Current: 103.9

6.66
105.23
Share Buyback Rate 3.20
COH's Share Buyback Rate is ranked higher than
91% of the 782 Companies
in the Global Luxury Goods industry.

( Industry Median: -0.40 vs. COH: 3.20 )
COH' s 10-Year Share Buyback Rate Range
Min: 5.8   Max: -9.9
Current: 3.2

Valuation & Return

vs
industry
vs
history
Price/Net Current Asset Value 386.30
COH's Price/Net Current Asset Value is ranked higher than
83% of the 1171 Companies
in the Global Luxury Goods industry.

( Industry Median: 9999.00 vs. COH: 386.30 )
COH' s 10-Year Price/Net Current Asset Value Range
Min: 19.87   Max: 859.2
Current: 386.3

19.87
859.2
Price/Tangible Book 4.80
COH's Price/Tangible Book is ranked higher than
55% of the 1171 Companies
in the Global Luxury Goods industry.

( Industry Median: 2.81 vs. COH: 4.80 )
COH' s 10-Year Price/Tangible Book Range
Min: 4.26   Max: 15.69
Current: 4.8

4.26
15.69
Price/DCF (Projected) 0.60
COH's Price/DCF (Projected) is ranked higher than
95% of the 1170 Companies
in the Global Luxury Goods industry.

( Industry Median: 5.19 vs. COH: 0.60 )
COH' s 10-Year Price/DCF (Projected) Range
Min: 0.64   Max: 4.04
Current: 0.6

0.64
4.04
Price/Median PS Value 0.50
COH's Price/Median PS Value is ranked higher than
94% of the 1171 Companies
in the Global Luxury Goods industry.

( Industry Median: 1.08 vs. COH: 0.50 )
COH' s 10-Year Price/Median PS Value Range
Min: 0.41   Max: 1.91
Current: 0.5

0.41
1.91
Price/Peter Lynch Fair Value 0.80
COH's Price/Peter Lynch Fair Value is ranked higher than
94% of the 1171 Companies
in the Global Luxury Goods industry.

( Industry Median: 9999.00 vs. COH: 0.80 )
COH' s 10-Year Price/Peter Lynch Fair Value Range
Min: 0.32   Max: 1.79
Current: 0.8

0.32
1.79
Price/Graham Number 1.50
COH's Price/Graham Number is ranked higher than
73% of the 1171 Companies
in the Global Luxury Goods industry.

( Industry Median: 2.07 vs. COH: 1.50 )
COH' s 10-Year Price/Graham Number Range
Min: 1.21   Max: 5.12
Current: 1.5

1.21
5.12
Earnings Yield (Greenblatt) 14.80
COH's Earnings Yield (Greenblatt) is ranked higher than
90% of the 1029 Companies
in the Global Luxury Goods industry.

( Industry Median: 7.30 vs. COH: 14.80 )
COH' s 10-Year Earnings Yield (Greenblatt) Range
Min: 3.7   Max: 31.1
Current: 14.8

3.7
31.1
Forward Rate of Return (Yacktman) 20.65
COH's Forward Rate of Return (Yacktman) is ranked higher than
86% of the 839 Companies
in the Global Luxury Goods industry.

( Industry Median: 8.99 vs. COH: 20.65 )
COH' s 10-Year Forward Rate of Return (Yacktman) Range
Min: 15.8   Max: 50
Current: 20.65

15.8
50

Business Description

Industry: Retail - Apparel & Specialty » Luxury Goods
Compare:LVMUY, CFRUY, HESAY, PPRUY, PRDSY » details
Traded in other countries:06388.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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User Comments

Mocheng
ReplyMocheng - 1 month ago
Stockvaluepicker,I think coach brand got trashed, heard a lot of shoppers cursing at Coach when they bought at a retail store 1 month before and saw the same bags are outlets 30% lowered in price.
Stockvaluepicker
ReplyStockvaluepicker - 1 month ago
Coach, Inc (NYSE: COH, $40) O/S: 278.8m; Market cap: $11.07bn; EV: $10.52bn; P/E: 12; EV/EBITDA: 7
Coach is a luxury goods retailer and has been in the business for > 70 years. Company sells premium leather handbags, footwear, watches and accessories for women (80% of sales), men (10%) and other (10%). Coach sells its products in North America (70% of sales) and internationally (30%) including Japan and China.
Investment thesis:
After its recent free-fall (YTD-28%) due to weak Q3 results (SS sales down -13% q/q in 2Q and -21% q/q in 3Q in NA) and lower guidance, Coach offers a compelling long-term investment opportunity.
1. First, Coach is led by the one of the best management team in retail. 2004-2013, sales grew from $1.3b to $5.0b (CAGR 20%); FCF/share up from $0.99 to $4.10 (CAGR 17%)
2. Coach has strong moat (in terms of emotional attachment with customer); evidenced by ROC of ~35% consistently over the last 10 years.
3. Despite, stiff competition from Michael Kors, Coach achieves gross margins of 70%; best margins in the luxury retail sector
4. Growth prospects are robust as new product line (focused on Men) and geographic expansion (China sales up 25%) working well
5. Huge operating leverage
6. No debt; cash balance of ~$800m
All good, but why the market is punishing the stock/ bear hug?
1. NA sales decline intensified in Q3
2. Guidance lowered (management expects NA sales decline in 2015 also)
3. Dual sales (factory outlet and direct stores) channel might dilute the brand value
4. International sales might drag gross margins as competition intensifies
5. Market has recently seen many retail turnarounds failing (JC Penny)
Argument: Sales decline; management is
- NA gross margins are at (68% to 63%) and International gross margins are at (80%) - effects of foreign currency translation should be noted.
- International expansion should boost sales growth
Valuation
- Huge margin of safety
- Intrinsic value in different scenario
- Bull Case: $74 (upside 84%); Bear Case: $52 (upside 30%); Base case:$62(upside 54%)

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