Two More Key Business Drivers for Coach, Inc. (COH)

Although China’s GDP has more than tripled since 2005, consumption is still only approximately 34% of China’s GDP (ours is north of 70%). China’s government has acknowledged that there needs to be a shift toward becoming more of a consumer-led economy, so it stands to reason that this channel has years’ worth of growth ahead of it.

The last channel is factory malls, and if Japan is any indication, this market could become huge. The Japanese factory mall channel went from essentially being nonexistent in 1999 to generating more than $7.5 billion in sales last year. Historically, this channel really takes off once traditional luxury brands enter a market. We’re now seeing that happen in China.

We Fools should try to identify factors that will affect a stock’s returns for years to come. Selling a stock that moved 5% after earnings might score you a small, quick win, but holding out for a spiffy-pop can help you build a truly powerful long-term portfolio.

JP Bennett has no position in any stocks mentioned. The Motley Fool recommends and owns shares of Coach.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.