COH  Coach Inc.

Exchange

NYSE

Sector

Consumer Non-Durables

Industry

Apparel

Market Cap.

13.02B

Vuru Grade

66.65/100

Current Price

$46.33
+0.26 (+0.56%)

Growth Price

$18.00
Overvalued by 61.15%

Stability Price

$20.88
Overvalued by 54.94%

Company Metrics

  • P/E 25.02
  • P/S 2.87
  • P/B 4.48
  • EPS 1.85
  • Cash ROIC 44.74%
  • Cash Ratio 1.60
  • Dividend 1.35 / 2.91 %
  • Avg. Vol. 3.59M
  • Shares 281.03M
  • Market Cap. 13.02B

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

Coach Inc (COH) Position Lowered by Oakbrook Investments LLC
Sports Perspectives - Apr 24, 2017
Coach logo Oakbrook Investments LLC decreased its position in shares of Coach Inc (NYSE:COH) by 8.2% during the first quarter, according to its most recent 13F filing with the Securities and Exchange Commission (SEC).
Coach is buying Kate Spade for $2.4 billion
Los Angeles Times - May 8, 2017
Coach Inc. is going to spend $2.4 billion for Kate Spade & Co., tying together two premier brands in the luxury goods sector that have fought to snare younger shoppers.
Kate Spade & Co. acquired by Coach Inc. - Dayton Daily News
Coach Inc. Jumps Today as It Finally Inks Deal With Kate Spade - Motley Fool
Did Coach Inc Get a Good Deal for Kate Spade?
Motley Fool - May 15, 2017
In this segment from Market Foolery, Chris Hill and Jason Moser discuss major consolidation in the fashion world as Coach (NYSE:COH) will be adding Kate Spade (NYSE:KATE) to its growing brand portfolio.
Coach Bags Kate Spade: Here's What The Experts Think Of The Deal - Benzinga
Coach Inc. Shows Progress in Its Turnaround Plan
Motley Fool - May 2, 2017
This week, Coach (NYSE:COH) posted a sales decline for its fiscal third quarter. Yet the company also showed solid progress at improving the brand's positioning in a tough market for luxury retailers.
Coach, Inc. Reports Fiscal 2017 Third Quarter Results Consistent with Expectations - Yahoo Finance
Coach CEO Victor Luis on the Selena Gomez Effect, His Acquisition Strategy and ... - Footwear News
Why the Market Is Rewarding Coach Inc. Today
Motley Fool - May 2, 2017
For the quarter ended April 1, Coach reported sales of $995 million, down 4% year over year, but beat analyst estimates on profit.
Cutback On Discounts Results In Bottom Line Improvement For Coach Inc. - Nasdaq
Coach earnings preview - Seeking Alpha
Coach Is Banking on Acquisitions
Bloomberg - May 1, 2017
Luxury handbag maker Coach Inc. has spent the past few years working to revive sales, refresh designs and shake off heavy discounting.
Coach, Inc. Launches Tender Offer to Acquire Kate Spade & Company for $18.50 ...
Business Wire (press release) - May 26, 2017
NEW YORK--(BUSINESS WIRE)--Coach, Inc. (NYSE:COH) (SEHK:6388), a leading New York design house of modern luxury accessories and lifestyle brands, today announced that its wholly owned direct subsidiary, Chelsea Merger Sub Inc., has ...
Coach Inc (COH) Stake Decreased by Morningstar Investment Services LLC - The Cerbat Gem
UBS Lifts Coach Inc (COH) Price Target to $55 - Smаrt Stоck Nеws
BRIEF-Coach Inc launches tender offer to acquire Kate Spade & Co for $18.50 ...
Reuters - May 26, 2017
ACCRA, May 26 Ghana will issue a three-year cedi bond next week to roll over maturing paper as the West African oil, gold and cocoa exporter seeks to restructure its high public debt, the Central Bank said on Friday.
Coach shares jump 11 percent on earnings beat, as M&A rumors still stir
CNBC - May 2, 2017
Earlier, Coach reported a better-than-expected quarterly profit. Coach has pulled out of more than 250 department stores, as lower foot traffic in malls has required the company to realign its resources, focus more on e-commerce and increase efforts to ...
Fewer discounts, luxury-handbag demand drive Coach profit beat - Reuters
Coach Inc (COH) Downgraded to "Hold" at Vetr Inc.
The Cerbat Gem - 7 hours ago
Coach logo Coach Inc (NYSE:COH) was downgraded by stock analysts at Vetr from a “buy” rating to a “hold” rating in a research note issued on Monday, May 8th.
Coach Inc (COH) Receives "Buy" Rating from Nomura - Chaffey Breeze
Envestnet Asset Management Inc. Increases Stake in Coach Inc (COH) - Markets Daily
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.

$46.33 Current Price

$18.00 Growth Price (DCF)

Overvalued by 61.15%


Growth Rate Assumed by Market: 36.56%


Future Free Cash Flow Growth Rate: 1.1%


Discount Rate: 15.0%


Show Free Cash Flow numbers

$20.88 Stability Price (EPV)

Overvalued by 54.94%


Discount Rate: 15.0%

$65.41 Book Price

Undervalued by 41.18%


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%
Share your thoughts about COH

Sign Up or Log In to start contributing!


Discussion

Nothing here yet. Be the first to post!