NEW YORK (
) has been reiterated by TheStreet Ratings as a buy with a ratings score of A. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, notable return on equity, expanding profit margins and impressive record of earnings per share growth. We feel these strengths outweigh the fact that the company shows weak operating cash flow.
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Highlights from the ratings report include:
- COH's revenue growth has slightly outpaced the industry average of 11.0%. Since the same quarter one year prior, revenues rose by 16.6%. Growth in the company's revenue appears to have helped boost the earnings per share.
- COH's debt-to-equity ratio is very low at 0.01 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, COH has a quick ratio of 1.76, which demonstrates the ability of the company to cover short-term liquidity needs.
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Textiles, Apparel & Luxury Goods industry and the overall market, COACH INC's return on equity significantly exceeds that of both the industry average and the S&P 500.
- The gross profit margin for COACH INC is currently very high, coming in at 76.80%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 20.30% significantly outperformed against the industry average.
- COACH INC has improved earnings per share by 24.2% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, COACH INC increased its bottom line by earning $2.93 versus $2.33 in the prior year. This year, the market expects an improvement in earnings ($3.53 versus $2.93).
Coach, Inc. designs and markets accessories and gifts for women and men in the United States and internationally. It primarily offers handbags, women's and men's bag, accessories, business cases, footwear, wearables, jewelry, sunwear, travel bags, watches, and fragrance products. The company has a P/E ratio of 17.2, equal to the average consumer non-durables industry P/E ratioand below the S&P 500 P/E ratio of 17.7. Coach has a market cap of $16.59 billion and is part of the
industry. Shares are down 5.6% year to date as of the close of trading on Tuesday.
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--Written by a member of TheStreet Ratings Staff.
TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.