Even though Coach reaffirmed earnings guidance for the year, its stock has jumped more than 13% today as investors bag one of the few bright spots in retail these days. That's not to say Coach isn't struggling with the same "very difficult retail environment" that everyone else faces, but it's still planning to deliver 10% sales growth for fiscal 2009.
Double-digit sales growth is nothing to sneeze at these days. September same-store sales numbers were dreadful, with high-end retailers like Chico's FAS
Things aren't perfect at Coach. Indirect sales through department stores such as Nordstrom
With that said, Coach looks like one of the few great buys in a downright depressing retail market. Coach has a trailing-12-month P/E of less than 10, versus the industry average of 13.4, and a history of outperforming the competition, with a five-year sales growth rate of 27%. Anyone delivering double-digit retail sales growth these days looks like a real hero, and Coach is positioning itself as a leader in an otherwise dim retail environment.
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