Coach (COH): Stitching Up a Solid Quarter - Barron's
Tweet
Share
E-mailGet Alerts COH Hot Sheet
Join SI Premium – FREE
Coach, Inc. (NYSE: COH) is primarily known by their little, delicious, indestructible, and always fashionable handbags, and now the company may also be known for its strong growth resurgence, Barron's reports today.
Coach is set to gain even more market share with new-product launches and store openings both domestically and abroad. Barron's sees earnings up 7% over FY09 results to approximately $664 million. This represents an EPS of $2.07 on revs of $3.4 billion. Consensus is $2.08 on revs of $3.41 billion, so Barron's is slightly conservative on their numbers.
CEO Lew Frankfort said that Coach is having a “very good holiday season.” An analyst at S&P says that Coach having a “steady stream” of new handbags will allow the company to report positive comps for Q210, after reporting a 1% decline in Q110.
Frankfort introduced the new Poppy label last summer, adding to an increase in store traffic and a 1% gain in sales for Q110. Average retail price of a Coach bag is $300, and the Poppy line has an average price of $240.
Coach currently occupies 26% of the U.S. handbag market, up from 22% two years ago. Coach believes that, despite having 340 stores in the U.S. and Canada currently, the brand should be able to support 500 full-priced North American stores. Current plans call for an addition of just 20 this year in North America. Coach also has 116 factory stores currently in North America.
Globalization is also something that the company is focusing strongly on. China’s handbag and accessories market is growing by a mind-boggling 40% per year, and Coach generated about $54 million sales in that market last year. Plans currently call for an additional 15 in FY10, on top of the 33 already in operation.
Coach is currently trading at 17.4x FY10 EPS. Coach also beats the Retail sector on return-on-equity, posting 38% versus the sectors 10% average. They also have given a quarterly dividend of $0.075 recently, yielding 0.8%.
CEO Frankfort said that sales of $250 million forecasted for China in five years are “extremely conservative.” Goldman Sachs sees sales expanding to about $400 million over that time, adding about $0.34 to EPS. Coach is currently trading at 17.4x FY10 EPS, relatively cheap compared to 2007, when the company sold for 32x EPS. Coach is a leader in the retail sector for return-on-equity, posting 38% versus the sector’s 10% average. They also have given a quarterly dividend of $0.075 recently, yielding 0.8%.
Goldman Sachs recently upgraded Coach from Neutral to Buy on November 16, 2009. The firm also raised their price target from $37 to $42.
Shares, trading at $36.73 today, are up from their March 2009 low of around $11, and up about 15% over the last three months.
Coach is set to gain even more market share with new-product launches and store openings both domestically and abroad. Barron's sees earnings up 7% over FY09 results to approximately $664 million. This represents an EPS of $2.07 on revs of $3.4 billion. Consensus is $2.08 on revs of $3.41 billion, so Barron's is slightly conservative on their numbers.
CEO Lew Frankfort said that Coach is having a “very good holiday season.” An analyst at S&P says that Coach having a “steady stream” of new handbags will allow the company to report positive comps for Q210, after reporting a 1% decline in Q110.
Frankfort introduced the new Poppy label last summer, adding to an increase in store traffic and a 1% gain in sales for Q110. Average retail price of a Coach bag is $300, and the Poppy line has an average price of $240.
Coach currently occupies 26% of the U.S. handbag market, up from 22% two years ago. Coach believes that, despite having 340 stores in the U.S. and Canada currently, the brand should be able to support 500 full-priced North American stores. Current plans call for an addition of just 20 this year in North America. Coach also has 116 factory stores currently in North America.
Globalization is also something that the company is focusing strongly on. China’s handbag and accessories market is growing by a mind-boggling 40% per year, and Coach generated about $54 million sales in that market last year. Plans currently call for an additional 15 in FY10, on top of the 33 already in operation.
Coach is currently trading at 17.4x FY10 EPS. Coach also beats the Retail sector on return-on-equity, posting 38% versus the sectors 10% average. They also have given a quarterly dividend of $0.075 recently, yielding 0.8%.
CEO Frankfort said that sales of $250 million forecasted for China in five years are “extremely conservative.” Goldman Sachs sees sales expanding to about $400 million over that time, adding about $0.34 to EPS. Coach is currently trading at 17.4x FY10 EPS, relatively cheap compared to 2007, when the company sold for 32x EPS. Coach is a leader in the retail sector for return-on-equity, posting 38% versus the sector’s 10% average. They also have given a quarterly dividend of $0.075 recently, yielding 0.8%.
Goldman Sachs recently upgraded Coach from Neutral to Buy on November 16, 2009. The firm also raised their price target from $37 to $42.
Shares, trading at $36.73 today, are up from their March 2009 low of around $11, and up about 15% over the last three months.
You May Also Be Interested In
- Activist Jana Partners takes 6.3% stake in Alkami Technology, urges sale
- Easterly Asset Management acquires Olstein fund business
- Gulfport Energy and Mobility Global to join S&P SmallCap 600
Create E-mail Alert Related Categories
Insiders' BlogRelated Entities
Standard & Poor's, Barron's, Lew Frankfort, DividendSign up for StreetInsider Free!
Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!
