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Coach Marching Ahead of the Industry: What's Behind Rally?
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In the past three months, Coach, Inc. has exhibited an impressive run in the index. The stock has not only outperformed the Zacks categorized Textile-Apparel Manufacturing industry but also the broader sector. In the said period, the stock has increased 12.4%, while the industry has lost 9.6%. Meanwhile the broader Consumer Discretionary sector advanced 7%.
As one of the leading American marketers of fine accessories and gifts, Coach boasts a proven strategy of investing in stores to enhance sales output through product innovation, a compelling pricing strategy, new merchandise assortments and a cost-effective global sourcing model. We believe that these strategies will help drive comparable-store sales and operating margins in the long term. The company’s growth drivers include expansion of global distribution model and venturing into under-penetrated markets.
Coach, which shares space with Lululemon Athletica Inc. (LULU - Free Report) , Columbia Sportswear Company (COLM - Free Report) and Delta Apparel, Inc. (DLA - Free Report) is undergoing a brand transformation and introducing modern luxury concept stores in key markets. The acquisition of Stuart Weitzman has been accretive to performance and is being viewed as a significant step in efforts toward becoming a multi-brand company. Further, it remains optimistic about dual-gender Legacy lifestyle collection, dedicated men's stores and international growth opportunities. Additionally, the company is aggressively expanding eCommerce platform.
Impressive Earnings Streak & Decent Outlook
The company has undertaken transformational initiatives revolving around products, stores and marketing to bring itself back on the growth trajectory and emerge as a multi-brand company. These efforts have helped it to outpace the industry so far this year, amid a backdrop of tough retail environment, volatility in tourist spending and macroeconomic headwinds. It also facilitated the company to post 12th straight quarter of earnings beat, when it reported second-quarter fiscal 2017 results, wherein both the top line and bottom line grew year over year.
Due to strengthening of the U.S. dollar, management now envisions low-single digit increase in fiscal 2017 revenue, including an expected unfavorable impact of 50 basis points (bps) from foreign currency. Earlier, the company had projected low-to-mid single digits increase in revenue, including a favorable impact of 100–150 bps from foreign currency.
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Coach Marching Ahead of the Industry: What's Behind Rally?
In the past three months, Coach, Inc. has exhibited an impressive run in the index. The stock has not only outperformed the Zacks categorized Textile-Apparel Manufacturing industry but also the broader sector. In the said period, the stock has increased 12.4%, while the industry has lost 9.6%. Meanwhile the broader Consumer Discretionary sector advanced 7%.
As one of the leading American marketers of fine accessories and gifts, Coach boasts a proven strategy of investing in stores to enhance sales output through product innovation, a compelling pricing strategy, new merchandise assortments and a cost-effective global sourcing model. We believe that these strategies will help drive comparable-store sales and operating margins in the long term. The company’s growth drivers include expansion of global distribution model and venturing into under-penetrated markets.
Coach, which shares space with Lululemon Athletica Inc. (LULU - Free Report) , Columbia Sportswear Company (COLM - Free Report) and Delta Apparel, Inc. (DLA - Free Report) is undergoing a brand transformation and introducing modern luxury concept stores in key markets. The acquisition of Stuart Weitzman has been accretive to performance and is being viewed as a significant step in efforts toward becoming a multi-brand company. Further, it remains optimistic about dual-gender Legacy lifestyle collection, dedicated men's stores and international growth opportunities. Additionally, the company is aggressively expanding eCommerce platform.
Impressive Earnings Streak & Decent Outlook
The company has undertaken transformational initiatives revolving around products, stores and marketing to bring itself back on the growth trajectory and emerge as a multi-brand company. These efforts have helped it to outpace the industry so far this year, amid a backdrop of tough retail environment, volatility in tourist spending and macroeconomic headwinds. It also facilitated the company to post 12th straight quarter of earnings beat, when it reported second-quarter fiscal 2017 results, wherein both the top line and bottom line grew year over year.
Due to strengthening of the U.S. dollar, management now envisions low-single digit increase in fiscal 2017 revenue, including an expected unfavorable impact of 50 basis points (bps) from foreign currency. Earlier, the company had projected low-to-mid single digits increase in revenue, including a favorable impact of 100–150 bps from foreign currency.
Coach currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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In addition to the recommendations that are available to the public on our website, how would you like to follow all Zacks' private buys and sells in real time?
Our experts cover all kinds of trades… from value to momentum . . . from stocks under $10 to ETF and option moves . . . from stocks that corporate insiders are buying up to companies that are about to report positive earnings surprises. You can even look inside exclusive portfolios that are normally closed to new investors. Starting today, for the next month, you can have unrestricted access. Click here for Zacks' private trades >>