Coach, Inc. (COH): Is It Still a Buy?

On the bottom line, operating income rose 3% to $348 million, while operating margin fell to 29.3% from 30.4% as selling, general, and administrative expenses rose slightly to 44.8%. Why? Management says it was “primarily due to to the acquisition of retail businesses in Asia.” Meanwhile, gross margin rose an encouraging 35 basis points to 74.1% for the quarter.

Finally, Coach offered a vote of confidence and rewarded stock holders for their patience by raising its annual dividend by one-eighth to $1.35 per share. With Coach, Inc. (NYSE:COH) stock trading hands at 15.5 times trailing earnings and 13.6 times forward estimates, that means investors who buy today will be able to collect a 2.4% yield.

In the end, these strengths come as little surprise considering my colleagues recently ranked Coach 11th in Fool.com’s list of the 25 Best Companies in America. Despite this morning’s pop, then, I’m convinced Coach stock remains reasonably valued and a solid long-term buy.

The article After Bagging a Solid Quarter, Is Coach Stock Still a Buy? originally appeared on Fool.com and is written by Steve Symington.

Fool contributor Steve Symington has no position in any stocks mentioned. The Motley Fool recommends and owns shares of Coach.

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