COH  Coach Inc.

Exchange

NYSE

Sector

Consumer Non-Durables

Industry

Apparel

Market Cap.

13.65B

Vuru Grade

66.65/100

Current Price

$48.55
-0.19 (-0.39%)

Growth Price

$17.99
Overvalued by 62.94%

Stability Price

$20.87
Overvalued by 57.02%

Company Metrics

  • P/E 26.21
  • P/S 3.04
  • P/B 4.74
  • EPS 1.85
  • Cash ROIC 44.74%
  • Cash Ratio 1.60
  • Dividend 1.35 / 2.77%
  • Avg. Vol. 3.03M
  • Shares 281.15M
  • Market Cap. 13.65B

Company Description

Coach, Inc. engages in the design and marketing of accessories and gifts for men and women in the United States and internationally. The company's primary products include handbags, women's and men's accessories, footwear and jewelry products, wearables, business cases, sunwear products, travel bags, fragrance products, and watches. Its accessories product line comprises women's small leather good... more


Download 10 Years of Financial Statements:
Income Statement   Balance Sheet   Cash Flow

News

Stock Alert: Coach Inc Stock Volatility Hits A Rock Bottom Low
CML News - Mar 28, 2017
Before we cover the full analysis we make a quick alert here that Coach Inc (NYSE:COH) has seen its stock price move at a tumbling low level.
Why Has Coach Inc.'s Stock Price Shot Up In 2017?
Nasdaq - Jul 3, 2017
According to a breakdown by Market Watch, among the S&P 500 companies, only two retailers, namely Coach Inc. and O'Reilly Automotive, reported positive comparable sales in the December quarter, a gross margin of at least 50%, and a net income of at ...
Kors, Kate & Coach: Battle for the Purse Strings - Sourcing Journal Online
Why Coach Inc. Stock Has Gained 36.2% So Far in 2017
Motley Fool - Jul 8, 2017
Shares of Coach Inc. (NYSE:COH) have climbed 36.2% so far in 2017, according to data provided by S&P Global Market Intelligence, thanks to a combination of the company's latest strong quarterly report and its subsequent move to acquire competitor Kate ...
Is Coach, Inc. (COH) a good buy? - TopChronicle
Coach, Inc. (NYSE:COH) Upgraded at Buckingham Research - The Cerbat Gem
Bullish on Coach Inc.
The Globe and Mail - Jul 21, 2017
Coach Inc. had a sharp decline from $57.95 to $33.39 (A-B) and then settled in a large bullish base formation known as an Inverse Head-and-Shoulder (solid lines).
Coach - Let's Take Stock Of The Situation
Seeking Alpha - Jun 29, 2017
Coach is successfully implementing a turnaround plan with the goal of elevating the brand and re-establishing brand attractiveness.
Coach, Inc. Completes Acquisition of Kate Spade & Company
Business Wire (press release) - Jul 11, 2017
NEW YORK--(BUSINESS WIRE)--Coach, Inc. (NYSE:COH) (SEHK:6388), a leading New York-based house of modern luxury accessories and lifestyle brands, today announced that it has completed the acquisition of Kate Spade & Company (NYSE:KATE) for ...
Coach Inc (NYSE:COH) Set to Surge Despite Retail Woes - Investorplace.com
Coach, Inc. successfully completed its tender offer for all outstanding shares ... - EPR Retail News (press release)
SOL Capital Management CO Has $20.10 Million Stake in Coach, Inc. (COH)
Week Herald - 4 hours ago
Coach logo SOL Capital Management CO reduced its stake in Coach, Inc. (NYSE:COH) by 33.7% during the second quarter, according to its most recent filing with the SEC.
BMO Capital Markets Reiterates “$42.00” Price Target for Coach, Inc. (NYSE:COH) - BNB Daily (blog)
Coach, Inc. (NYSE:COH) Experiences Lighter than Usual Trading Volume - Highlight Press
Analysts Showing Optimistic Trends For Coach, Inc. (COH)
News Oracle - 9 hours ago
Coach, Inc. (COH) will report its next earnings on Aug 08 BMO. The company reported the earnings of $0.46/Share in the last quarter where the estimated EPS by analysts was $0.44/share.
Today's Brokerage Rating: Coach, Inc. (COH), Fred's, Inc. (FRED)
StockNewsJournal - Jul 21, 2017
Investors who are keeping close eye on the stock of Coach, Inc. (NYSE:COH) established that the company was able to keep return on investment at 13.07 in the trailing twelve month while Reuters data showed that industry's average stands at 7.50 and ...
Coach, Inc. (COH) Saw a 52-Week High - Highlight Press
Coach, Inc. (COH) presents High Dividend Yield at 2.81% - Voice Of Analysts
Michael Kors will pay $1.2 billion for Jimmy Choo footwear
NOLA.com - 4 hours ago
The purchase of Jimmy Choo -- Michael Kors' first deal to expand beyond its own brand name since its initial public offering in 2011 -- gives a presence in higher-end luxury to the New York fashion and accessories company, in a move similar to Coach ...
Michael Kors Plans More Major Deals After Jimmy Choo Purchase - Bloomberg
Michael Kors takes over Jimmy Choo - New York Business Journal
Growth Rate Assumed by Market

We did a reverse valuation to calculate the growth rate the market is assuming for COH to be considered fairly valued at its current market price. It's useful to compare this to the growth rate we're assuming for the Growth Price.

Future Free Cash Flow Growth Rate

This is the annual growth rate we've applied to calculate COH's Free Cash Flow for the next 10 years. To calculate it, we looked at several time periods of the last 10 years. Feel free to adjust it, but we limit the initial growth rate to 20% and slow it down over the years. Otherwise, long-term sustainability issues come into play.

Discount Rate

The discount rate is the annual rate of return an investor requires to take the risk of investing in a single stock. To account for that risk, this should be above 8-10%, as this is the avg. annual rate of return for the S&P500 over the past 100 years.

$48.55 Current Price

$17.99 Growth Price (DCF)

Overvalued by 62.94%


Growth Rate Assumed by Market: 37.95%


Future Free Cash Flow Growth Rate: 1.1%


Discount Rate: 15.0%


Show Free Cash Flow numbers

$20.87 Stability Price (EPV)

Overvalued by 57.02%


Discount Rate: 15.0%

$65.41 Book Price

Undervalued by 34.72%


Excellent Cash Return on Invested Capital over the past 5 years

COH has efficiently invested its financial resources in buildings, projects, and equipment, resulting in strong returns. Annual Reports can be useful in identifying the cause of one-time events and future sustainability.

COH has created $44.74 of cash for every $100 invested.
Figures in USD. Fiscal year ends in June
20122013201420152016
Free Cash Flow 1.04B 1.17B 765.82M 727.60M 353.30M
divided by
Invested Capital 1.47B 1.67B 1.98B 2.31B 2.75B
Cash ROIC 70.62% 70.03% 38.65% 31.55% 12.86%

Excellent Return on Equity over the past 5 years

Over the past 5 years, COH has generated strong profits with money shareholders have invested. This is considered one of the best indicators of quality management. Beware of extremely high Return on Equity (> 50%) as this is often unsustainable.

COH has generated $32.13 of Earnings for every $100 of Shareholders' Equity.
Figures in USD. Fiscal year ends in June
20122013201420152016
Net Income 1.04B 1.03B 781.34M 402.40M 460.50M
divided by
Stockholders' Equity 1.99B 2.41B 2.42B 2.49B 2.68B
Return on Equity 52.13% 42.94% 32.28% 16.16% 17.16%

Excellent Business Performance over the past 10 years

COH has been able to maintain profitability in good times and bad. This could mean COH has an extremely strong business or has the ability to scale down costs when needed. This should be a fairly resilient business, but double check for future sustainability by looking at its Risk Factors in the Annual Report.

COH has created positive free cash flow for 9 or more of the past 10 years.
Figures in USD. Fiscal year ends in June
2007200820092010201120122013201420152016
Free Cash Flow 638.23M 748.64M 568.82M 909.76M 885.53M 1.04B 1.17B 765.82M 727.60M 353.30M

Strong Balance Sheet

COH is financially strong with Current Assets covering Total Liabilities. It's in a fairly liquid position and dependent on the amount and saleability of any inventory; it may have the financial security to survive an economic downturn.
Figures in USD. Fiscal year ends in June
2007200820092010201120122013201420152016
Cash 1.19B 698.91M 800.36M 696.40M 702.04M 917.22M 1.13B 868.63M 1.53B 1.32B
Current Assets 1.74B 1.39B 1.40B 1.30B 1.45B 1.80B 2.07B 1.86B 2.51B 2.17B
Total Assets 2.45B 2.27B 2.56B 2.47B 2.64B 3.10B 3.53B 3.66B 4.67B 4.89B
Current Liabilities 408.00M 450.94M 459.65M 529.04M 593.02M 718.16M 722.51M 813.12M 834.70M 826.70M
Total Liabilities 539.16M 758.02M 868.29M 961.82M 1.02B 1.11B 1.12B 1.24B 2.18B 2.21B
Stockholder' Equity 1.91B 1.52B 1.70B 1.51B 1.61B 1.99B 2.41B 2.42B 2.49B 2.68B
Current Ratio 4.27 3.07 3.04 2.46 2.45 2.51 2.87 2.28 3.00 2.63
TL-to-TA 0.22 0.33 0.34 0.39 0.39 0.36 0.32 0.34 0.47 0.45

Low or No Reinvestment of Profits over the past 10 years

COH has either been retaining a small amount of their earnings or has done so inconsistently. A lack of consistency could be due to COH operating at a loss or them having such a strong economic moat they feel comfortable spending profits on growth. Be wary of future prospects and if applicable, inspect the moat's sustainability.
Figures in USD. Fiscal year ends in June
2007200820092010201120122013201420152016
Retained Earnings 940.76M 375.95M 499.95M -30.05M -445.65M -387.45M -101.88M -219.46M -189.60M -104.10M
Retained Earnings Growth - -60.04% 32.98% -106.01% -1,382.89% 13.06% 73.70% -115.40% 13.60% 45.09%

Shrinking Competitive Advantage over the past 10 years

COH has a shrinking competitive advantage. This could be due to weakening branding, the inability to keep costs low, or by new competitors entering the industry. Look at its future prospects to determine sustainability and whether the economic moat will continue to shrink or if it will rebound.

$18.92 of every $100 of Revenue have been pure profit, on average over the past 10 years.
Figures in USD. Fiscal year ends in June
2007200820092010201120122013201420152016
Net Income 663.67M 783.06M 623.37M 734.94M 880.80M 1.04B 1.03B 781.34M 402.40M 460.50M
divided by
Revenue 2.61B 3.18B 3.23B 3.61B 4.16B 4.76B 5.08B 4.81B 4.19B 4.49B
Net Profit Margin 25.40% 24.62% 19.30% 20.37% 21.18% 21.81% 20.38% 16.26% 9.60% 10.25%

Strong Pricing Power over the past 10 years

COH has maintained substantial gross margins, suggesting that they have been able to set prices without consideration of the cost of goods sold. This potentially leaves flexibility in inflationary environments to raise prices on consumers and maintain profitability.

$72.23 of every $100 worth of sales have been Gross Profit, on average over the past 10 years.
Figures in USD. Fiscal year ends in June
2007200820092010201120122013201420152016
Gross Profit 2.02B 2.41B 2.32B 2.63B 3.02B 3.47B 3.70B 3.30B 2.91B 3.05B
divided by
Revenue 2.61B 3.18B 3.23B 3.61B 4.16B 4.76B 5.08B 4.81B 4.19B 4.49B
Gross Margin 77.44% 75.68% 71.90% 73.00% 72.71% 72.77% 72.86% 68.60% 69.39% 67.93%

Medium Capital Intensity over the past 10 years

COH has used a reasonable amount of their financial resources to invest in facilities and equipment required to produce its goods and services. This isn't perfect, but it shouldn't be an area of concern unless this number is strongly trending upwards.

31.92% of Profits are being spent on Capital Expenditures, like Property, Plant, & Equipment, required to run the business.
Figures in USD. Fiscal year ends in June
2007200820092010201120122013201420152016
Capital Expenditure 140.87M 174.72M 240.33M 81.12M 147.74M 184.31M 241.35M 219.59M 209.80M 405.30M
divided by
Net Income 663.67M 783.06M 623.37M 734.94M 880.80M 1.04B 1.03B 781.34M 402.40M 460.50M
Capital Expenditure Ratio 21.23% 22.31% 38.55% 11.04% 16.77% 17.74% 23.33% 28.10% 52.14% 88.01%

Strong Dividend History over the past 10 years

COH has consistently distributed a dividend for the past 7 years. This suggests COH is established and will likely continue to distribute its dividend for the foreseeable future.
Figures in USD. Fiscal year ends in June
2007200820092010201120122013201420152016
Dividend Paid - - - 94.32M 178.12M 260.28M 339.72M 376.50M 371.80M 374.50M
divided by
Shares Outstanding 377.36M 360.33M 325.62M 315.85M 301.56M 294.13M 286.31M 280.38M 277.20M 279.30M
Dividend Paid Per Share - - - 0.30 0.59 0.88 1.19 1.34 1.34 1.34
Price at Year End 29.46 19.68 36.01 55.23 61.04 54.30 56.39 37.86 32.67 35.02
Dividend Yield - - - 0.54% 0.97% 1.63% 2.10% 3.55% 4.11% 3.83%

Strong History of Stock Buybacks over the past 10 years

COH has a strong history of delivering increased value for shareholders in the form of stock buybacks. These have helped improve financial metrics and increase each shareholders' relative ownership stake in the company, due to fewer shares outstanding and holding the same number of shares.
Figures in USD. Fiscal year ends in June
2007200820092010201120122013201420152016
Shares Outstanding 377.36M 360.33M 325.62M 315.85M 301.56M 294.13M 286.31M 280.38M 277.20M 279.30M
Stock Bought Back - 4.72% 10.66% 3.09% 4.74% 2.53% 2.73% 2.11% 1.15% -0.75%
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