Coach, Inc. (COH – Analyst Report) continues to trade strong in the recently volatile market, hitting a fresh 52-week high on the heels of another earnings surprise from late April. With estimates on the rise and a bullish growth projection, this stock has momentum in the bag.
Although Coach has been trading higher for most of 2011, shares got an extra boost in late April after the company reported strong Q1 results that once again came in ahead of expectations.
Strong First-Quarter Results
Revenue for the period was up 14% from last year to $951 million. Earnings also looked good, coming in at 62 cents, 3% ahead of the Zacks Consensus Estimates, where the company has an average earnings surprise of 9% over the last four quarters.
The company saw a pretty even performance from its different channels, with direct-to-consumer sales up 15% to $832 million and indirect sales up 14% to $119 million. On the geographic front, North America led the way, with same-store sales up an impressive 10% from last year.
Buying Shares Back
Coach was also active returning value to shareholders, purchasing 3.53 million shares during the quarter for $192 million.
Estimates
We saw some very marginal movement in estimates off the solid quarter, with the current year adding 2 cents to $2.89 while the next-year estimate added 4 cents to $3.30, a bullish 14% growth projection.
We saw some very marginal movement in estimates off the solid quarter, with the current year adding 2 cents to $2.89 while the next-year estimate added 4 cents to $3.30, a bullish 14% growth projection.
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Valuation
In light of recent gains and some stagnation in estimates, COH does look a bit pricey, trading with a forward P/E of 21.5X against its peer average of 13X.
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