Wednesday, January 23, 2008

Coach Posts Earnings: Up 6.2% At End Of Trading

Coach (NYSE: COH), who we've been critical of as of late (and whose stock has fallen precipitously, at one point more than 50% since its high last April) has just reported earnings of 69 cents/share for the most recent quarter, beating analysts by a penny and sending Coach shares up 6.18%. The recent selloff could've been an overreaction, and this positive performance might've just been a rebound back to sanity - long term, we're still not bullish on this stock. No matter how far a stock has fallen, it doesn't become a value stock until a sound, independent analysis of the firm's value determines that the firm is selling at a discount because the market overreacted. If you don't see any value in a brand's future, it's difficult to gauge a future value, and obviously we wouldn't advise anybody to own shares in a firm in which they don't see a future.

Consider yourself warned, Coach bulls. You may have won today, but only the future will tell if Coach can regain its cachet, net margin, and attractiveness as an investment candidate.

2 comments:

Jeanna said...

What did Coach do to you? You're constantly picking on them!

Xavier said...

Read today's WSJ article on luxury players. Coach is mentioned, and it's quite clear that you have a mild obsession with everything that happens to them.