Coach Inc reports 98.9% CAPEX growth and 7.2% Revenue growth
09/08/2016 • About Coach Inc (
$6388) • By InTwits
Coach Inc reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Coach Inc has medium CAPEX intensity: 5 year average CAPEX/Revenue was 5.4%. At the same time it's in pair with industry average of 5.5%.
- CAPEX is quite volatile: 396 in FY2016, 199 in FY2015, 220 in FY2014, 241 in FY2013, 184 in FY2012
- The company has highly profitable business model: ROIC is at 19.4%
- It operates with high leverage: Net Debt/EBITDA is 0.0x while industry average is -0.1x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Coach Inc ($6388) key annual financial indicators
| mln. $ | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 4,763 | 5,075 | 4,806 | 4,192 | 4,492 | 7.2% |
| Gross Profit | 3,466 | 3,698 | 3,297 | 2,909 | 3,051 | 4.9% |
| SG&A | 1,954 | 2,174 | 2,177 | 2,291 | 2,398 | 4.7% |
| EBITDA | 1,645 | 1,688 | 1,309 | 810 | 864 | 6.7% |
| Net Income | 1,039 | 1,034 | 781 | 402 | 461 | 14.4% |
Balance Sheet
|
|---|
| Cash | 917 | 1,063 | 592 | 1,292 | 859 | -33.5% |
| Short Term Debt | 22 | 1 | 140 | 11 | 15 | 32.7% |
| Long Term Debt | 1 | 0 | 0 | 879 | 861 | -2.0% |
Cash flow
|
|---|
| Capex | 184 | 241 | 220 | 199 | 396 | 98.9% |
Ratios
|
|---|
| Revenue growth | 14.5% | 6.6% | -5.3% | -12.8% | 7.2% | |
| EBITDA growth | 15.0% | 2.6% | -22.4% | -38.2% | 6.7% | |
| Gross Margin | 72.8% | 72.9% | 68.6% | 69.4% | 67.9% | -1.5% |
| EBITDA Margin | 34.5% | 33.2% | 27.2% | 19.3% | 19.2% | -0.1% |
| Net Income Margin | 21.8% | 20.4% | 16.3% | 9.6% | 10.3% | 0.7% |
| SG&A, % of revenue | 41.0% | 42.8% | 45.3% | 54.6% | 53.4% | -1.3% |
| CAPEX, % of revenue | 3.9% | 4.8% | 4.6% | 4.8% | 8.8% | 4.1% |
| ROIC | 82.3% | 68.7% | 45.0% | 20.8% | 19.4% | -1.4% |
| ROE | 57.6% | 47.0% | 32.4% | 16.4% | 17.8% | 1.4% |
| Net Debt/EBITDA | -0.5x | -0.6x | -0.3x | -0.5x | 0.0x | 0.5x |
Revenue and profitability
The company's Revenue increased on 7.2%. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin decreased slightly on 1.4 pp from 14.1% to 12.7% in FY2016.
Gross Margin decreased slightly on 1.5 pp from 69.4% to 67.9% in FY2016. SG&A as a % of Revenue decreased slightly on 1.3 pp from 54.6% to 53.4% in FY2016.
Net Income marign increased slightly on 0.65 pp from 9.6% to 10.3% in FY2016.
Capital expenditures (CAPEX) and working capital investments
Coach Inc's CAPEX/Revenue was 8.8% in FY2016. CAPEX/Revenue increased on 4.1 pp from 4.8% in FY2013 to 8.8% in FY2016. For the last three years the average CAPEX/Revenue was 6.0%.
Return on investment
The company operates at good ROIC (19.35%) and ROE (17.80%). ROIC decreased slightly on 1.4 pp from 20.8% to 19.4% in FY2016. ROE increased slightly on 1.4 pp from 16.4% to 17.8% in FY2016.
Leverage (Debt)
Debt level is 0.0x Net Debt / EBITDA and 1.0x Debt / EBITDA. Net Debt / EBITDA surged on 0.5x from -0.5x to 0.020x in FY2016. Debt decreased slightly on 1.6% while cash dropped on 33.5%.
Management team
Victor Luis is a Coach Inc's CEO. Victor Luis has spent 4 years at the company.
Appendix 1: Peers in Retail
Below we provide Coach Inc benchmarking against other companies in Retail industry for the last 5 years. We show data for the top-5 companies by key financial metric together with the median value for all the companies in the industry.
Top companies by Revenue growth, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| China Nuclear Industry 23 International Corp Ltd ($611) | 1.4% | 85.6% | -42.1% | 419.8% | |
| Noble House China Holdings Ltd ($8246) | -5.0% | -20.2% | -24.8% | 117.2% | |
| Vongroup Ltd ($318) | | 23.7% | -80.2% | 90.3% | -7.2% |
| Nanjing Sinolife United Co Ltd ($3332) | 45.6% | 29.5% | 29.6% | 57.3% | |
| Shanghai La Chapelle Fashion Co Ltd ($6116) | 54.9% | 72.8% | 23.0% | 48.3% | |
| |
|---|
| Median (117 companies) | 7.4% | 6.1% | 3.1% | -1.0% | -8.3% |
|---|
| Coach Inc ($6388) | | 6.6% | -5.3% | -12.8% | 7.2% |
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Vongroup Ltd ($318) | | | 95.1% | 99.1% | 99.0% |
| Modern Beauty Salon Holdings Ltd ($919) | 97.4% | 95.9% | 96.8% | 96.7% | 96.8% |
| Moiselle International Holdings Ltd ($130) | 81.2% | 83.8% | 80.6% | 83.2% | 77.6% |
| Embry Holdings Ltd ($1388) | 81.2% | 80.4% | 82.3% | 81.6% | |
| Nanjing Sinolife United Co Ltd ($3332) | 86.5% | 89.3% | 90.9% | 80.6% | |
| |
|---|
| Median (103 companies) | 36.2% | 35.8% | 35.0% | 33.3% | 42.6% |
|---|
| Coach Inc ($6388) | 72.8% | 72.9% | 68.6% | 69.4% | 67.9% |
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| China Energy Development Holdings Ltd ($228) | -58.1% | -72.3% | -84.0% | 1,070.6% | |
| Golden Eagle Retail Group Ltd ($3308) | 48.5% | 47.3% | 42.8% | 55.4% | |
| Nanjing Sinolife United Co Ltd ($3332) | 51.6% | 56.9% | 54.4% | 44.8% | |
| Lifestyle International Holdings Ltd ($1212) | 47.5% | 47.0% | 44.7% | 43.4% | |
| China Dongxiang Group Co Ltd ($3818) | 6.0% | 5.6% | 58.3% | 41.4% | |
| |
|---|
| Median (117 companies) | 10.3% | 7.3% | 8.9% | 7.1% | 3.3% |
|---|
| Coach Inc ($6388) | 34.5% | 33.2% | 27.2% | 19.3% | 19.2% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Culture Landmark Investment Ltd ($674) | 11.6% | 19.4% | 15.7% | 47.2% | 3.9% |
| Springland International Holdings Ltd ($1700) | 31.9% | 17.4% | 26.5% | 36.9% | |
| Merry Garden Holdings Ltd ($1237) | 18.6% | 28.6% | 15.1% | 34.2% | |
| China Energy Development Holdings Ltd ($228) | 1.6% | 0.2% | 0.0% | 27.4% | |
| Golden Eagle Retail Group Ltd ($3308) | 28.5% | 9.4% | 26.7% | 25.4% | |
| |
|---|
| Median (117 companies) | 4.1% | 3.6% | 3.7% | 3.1% | 1.8% |
|---|
| Coach Inc ($6388) | 3.9% | 4.8% | 4.6% | 4.8% | 8.8% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Modern Beauty Salon Holdings Ltd ($919) | 50.7% | -4.6% | 81.3% | 71.8% | 13.3% |
| JC Group Holdings Ltd ($8326) | | 215.6% | 92.8% | 66.3% | 81.7% |
| Starbucks Corp ($4337) | 36.4% | -6.0% | 52.8% | 51.4% | |
| Sa Sa International Holdings Ltd ($178) | 53.5% | 52.7% | 49.0% | 39.8% | 19.0% |
| Noble House China Holdings Ltd ($8246) | 17.7% | -67.7% | -113.8% | 35.6% | |
| |
|---|
| Median (117 companies) | 12.2% | 8.8% | 8.5% | 5.8% | 2.0% |
|---|
| Coach Inc ($6388) | 82.3% | 68.7% | 45.0% | 20.8% | 19.4% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Sparkle Roll Group Ltd ($970) | 0.6x | 4.0x | 9.3x | 23.5x | 8.5x |
| Trinity Ltd ($891) | -0.2x | 0.2x | 0.6x | 18.2x | |
| Parkson Retail Group Ltd ($3368) | 0.8x | 2.3x | 3.6x | 9.8x | |
| Maoye International Holdings Ltd ($848) | 2.9x | 3.3x | 3.4x | 9.0x | |
| Century Ginwa Retail Holdings Ltd ($162) | 2.0x | 2.5x | 4.8x | 7.3x | |
| |
|---|
| Median (91 companies) | -0.5x | -0.5x | -0.2x | -0.5x | -1.0x |
|---|
| Coach Inc ($6388) | -0.5x | -0.6x | -0.3x | -0.5x | 0.0x |
