Coach (COH) fell 4.2% to close at $35.04 per share during the second week of September 2016. The stock’s weekly, monthly, and year-to-date (or YTD) price movements were -4.2%, -9.9%, and 9.9%, respectively, as of September 16. COH is trading 8.0% below its 20-day moving average, 12.6% below its 50-day moving average, and 5.9% below its 200-day moving average.
Related ETF and peers
The ALPS Sector Dividend Dogs ETF (SDOG) invests 2.0% of its holdings in Coach. The ETF tracks an equal-weighted index of the five highest-yielding S&P 500 securities in each sector. The YTD price movement of SDOG was 17.4% on September 16.
The market caps of Coach’s competitors are as follows:
Morgan Stanley downgraded Coach’s rating to “underweight” from “equal-weight” and also set the stock’s price target at $32.0 per share.
Performance of Coach in fiscal 4Q16 and 2016
Coach reported fiscal 4Q16 net sales of $1.2 billion, a rise of 20.0% compared to net sales of $1.0 billion in fiscal 4Q15. The company’s gross profit margin fell by 1.0% in fiscal 4Q16 compared to the prior-year period.
Its net income and EPS (earnings per share) rose to $81.5 million and $0.29, respectively, in fiscal 4Q16 compared to $11.7 million and $0.04, respectively, in fiscal 4Q15. The company reported adjusted EPS of $0.45 in fiscal 4Q16, a rise of 45.2% compared to fiscal 4Q15.
Fiscal 2016 results
In fiscal 2016, COH reported net sales of $4.5 billion, a rise of 7.1% YoY (year-over-year). The company’s gross profit margin fell by 0.23%, and its operating income rose by 5.7% in fiscal 2016.
Its net income and EPS rose to $460.5 million and $1.65, respectively, in fiscal 2016 compared to $402.4 million and $1.45, respectively, in fiscal 2015.
Coach’s cash, cash equivalents & short-term investments, and inventories fell 13.3% and 5.3%, respectively, in fiscal 2016. Its current ratio and debt-to-equity ratio fell to 2.6x and 0.82x, respectively, in fiscal 2016 compared to 3.0x and 0.87x, respectively, in fiscal 2015.
The company has made the following projections for fiscal 2017:
- revenue growth in the low-to-mid single digits. This projection includes the benefit from foreign currency of ~1.0%–1.5%
- operating margin in the range of 18.5%–19.0%
- interest expense of ~$25 million
- a tax rate of ~28%
- double-digit net income growth
- double-digit EPS growth
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