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Coach Inc
COH : NYSE : Consumer Goods
$36.49 | %
Today's Range: 36.02 - 36.61
Avg. Daily Volume: 4,537,200
12/19/14 - 4:04 PM ET

Financial Analysis


COACH INC's gross profit margin for the first quarter of its fiscal year 2015 is essentially unchanged when compared to the same period a year ago. Sales and net income have dropped, underperforming the average competitor within its industry. COACH INC has average liquidity. Currently, the Quick Ratio is 1.37 which shows that technically this company has the ability to cover short-term cash needs. The company's liquidity has decreased from the same period last year, indicating deteriorating cash flow.

At the same time, stockholders' equity ("net worth") has remained virtually unchanged only increasing by 2.58% from the same quarter last year. Together, the key liquidity measurements indicate that it is relatively unlikely that the company will face financial difficulties in the near future.

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Income Statement Q1 FY15 Q1 FY14
Net Sales ($mil)1038.81150.76
EBITDA ($mil)260.2369.28
EBIT ($mil)216.9324.32
Net Income ($mil)119.1217.88


Balance Sheet Q1 FY15 Q1 FY14
Cash & Equiv. ($mil)907.5854.75
Total Assets ($mil)3671.03487.39
Total Debt ($mil)170.00.99
Equity ($mil)2440.12378.57


Profitability Q1 FY15 Q1 FY14
Gross Profit Margin73.3275.74
EBITDA Margin25.0432.09
Operating Margin20.8828.18
Sales Turnover1.281.45
Return on Assets18.5929.56
Return on Equity27.9743.34
Debt Q1 FY15 Q1 FY14
Current Ratio2.372.65
Debt/Capital0.070.0
Interest Expense0.00.0
Interest Coverage0.00.0


Share Data Q1 FY15 Q1 FY14
Shares outstanding (mil)275.6280.42
Div / share0.340.34
EPS0.430.77
Book value / share8.858.48
Institutional Own % n/a n/a
Avg Daily Volume4558134.05147130.0

Valuation


HOLD. The current P/E ratio indicates a significant discount compared to an average of 29.71 for the Textiles, Apparel & Luxury Goods industry and a discount compared to the S&P 500 average of 19.99. Conducting a second comparison, its price-to-book ratio of 4.11 indicates a premium versus the S&P 500 average of 2.76 and a significant discount versus the industry average of 6.66. The price-to-sales ratio is above the S&P 500 average, but well below the industry average. Upon assessment of these and other key valuation criteria, COACH INC proves to trade at a discount to investment alternatives within the industry.


Price/Earnings
1 2 3 4 5
premium   discount
  Price/Cash Flow
1 2 3 4 5
premium   discount
COH 14.93 Peers 29.71   COH 10.38 Peers 27.48

Discount. A lower P/E ratio than its peers can signify a less expensive stock or lower growth expectations.

COH is trading at a significant discount to its peers.

 

Discount. The P/CF ratio, a stock’s price divided by the company's cash flow from operations, is useful for comparing companies with different capital requirements or financing structures.

COH is trading at a significant discount to its peers.

 
Price/Projected
Earnings
1 2 3 4 5
premium   discount
  Price to
Earnings/Growth
1 2 3 4 5
premium   discount
COH 18.22 Peers 28.15   COH NM Peers 2.43

Discount. A lower price-to-projected earnings ratio than its peers can signify a less expensive stock or lower future growth expectations.

COH is trading at a significant discount to its peers.

 

Neutral. The PEG ratio is the stock’s P/E divided by the consensus estimate of long-term earnings growth. Faster growth can justify higher price multiples.

COH's negative PEG ratio makes this valuation measure meaningless.

 
Price/Book
1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
COH 4.11 Peers 6.66   COH -32.60 Peers 82.38

Discount. A lower price-to-book ratio makes a stock more attractive to investors seeking stocks with lower market values per dollar of equity on the balance sheet.

COH is trading at a significant discount to its peers.

 

Lower. Elevated earnings growth rates can lead to capital appreciation and justify higher price-to-earnings ratios.

However, COH is expected to significantly trail its peers on the basis of its earnings growth rate.

 
Price/Sales
1 2 3 4 5
premium   discount
  Sales Growth
1 2 3 4 5
premium   discount
COH 2.14 Peers 2.75   COH -7.32 Peers 13.54

Discount. In the absence of P/E and P/B multiples, the price-to-sales ratio can display the value investors are placing on each dollar of sales.

COH is trading at a discount to its industry on this measurement.

 

Lower. A sales growth rate that trails the industry implies that a company is losing market share.

COH significantly trails its peers on the basis of sales growth

 

 

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