Editor's Note: 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.
NEW YORK (
) has been reiterated by TheStreet Ratings as a buy with a ratings score of B . The company's strengths can be seen in multiple areas, such as its impressive record of earnings per share growth, compelling growth in net income, revenue growth, largely solid financial position with reasonable debt levels by most measures and expanding profit margins. Although no company is perfect, currently we do not see any significant weaknesses which are likely to detract from the generally positive outlook.
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Highlights from the ratings report include:
- COACH INC has improved earnings per share by 26.5% 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 $3.54 versus $2.93 in the prior year. This year, the market expects an improvement in earnings ($3.85 versus $3.54).
- The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and greatly outperformed compared to the Textiles, Apparel & Luxury Goods industry average. The net income increased by 24.2% when compared to the same quarter one year prior, going from $202.48 million to $251.43 million.
- Despite its growing revenue, the company underperformed as compared with the industry average of 17.3%. Since the same quarter one year prior, revenues rose by 12.0%. 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 1.52, which demonstrates the ability of the company to cover short-term liquidity needs.
- The gross profit margin for COACH INC is currently very high, coming in at 72.60%. Regardless of COH's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, COH's net profit margin of 21.80% significantly outperformed against the industry.
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 16, equal to the average consumer non-durables industry P/E ratio and below the S&P 500 P/E ratio of 17.7. Coach has a market cap of $16.1 billion and is part of the
industry. Shares are down 7.5% year to date as of the close of trading on Wednesday.
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--Written by a member of TheStreet Ratings Staff.
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