1Q17: Coach Delivers In-Line Earnings, Misses on Revenue



Snapshot of the series

Coach (COH) reported its results for the first quarter of 2017 before the market opened on November 1, 2016. The results relate to the three-month period that ended October 1, 2016.

The company reported earnings of $0.45 per share, in line with Wall Street analysts’ estimates. However, the company missed revenue estimates by $30 million and reported total sales of $1.0 billion.

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About Coach

Established in 1941, Coach is a luxury fashion and accessory brand. The company’s products target the affordable luxury business and include handbags, watches, footwear, and apparel, among other things.

Valuation and stock recommendation

As of November 2, 2016, COH was trading at a one-year forward price-to-earnings ratio of 16.2x. In comparison, Michael Kors (KORS), Ralph Lauren (RL), and Kate Spade (KATE) were trading at ratios of 11x, 18.3x, and 17.3x, respectively.

The mean 12-month price target by the 36 analysts covering Coach is $43.80, which suggests the stock could gain about 23% over the next year. 22 of the 36 analysts have made a “buy” recommendation on the stock, 14 have recommended to “hold,” and two have given a “sell” rating.

Investors looking to invest in Coach through ETFs could invest in the iShares Morningstar Mid-Cap Value ETF (JKI). Coach makes up 0.75% of JKI.

This series

This series is an overview of Coach’s 1Q17 results. We’ll discuss the company’s financial performance in 1Q17, key revenue drivers, guidance, stock market performance, target price, and current valuation. We’ll also look at analysts’ views on Coach.


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