THE BUSINESSWEEK 50 RANKINGS + 25

2

Coach

Women everywhere know a good bag can be a better investment than a designer dress or power suit. Coach is successfully cashing in on this fashion wisdom, marketing bags with names like Hamptons Weekend to style-conscious shoppers from urban fashionistas to upscale suburban moms. It’s also extending the brand to secondary categories, including jewelry, launched just last year. In the U.S. and overseas, particularly in Japan, Coach has grabbed sales from such rivals as jeweler Tiffany and from other luxury-goods segments, too. But as it expands its products and opens new stores, it risks suffering from a potential curse for any name: overexposure. CEO Lew Frankfort insists the brand is “vibrant,” adding that “our opportunities, notably in our home market, are boundless.” Still, when preteens in Peoria flaunt a Coach product, the big-city grown-ups might just flee.

Overall Grade

A

Market Data

COH

Market Value
(2/28/2007)

$17.4 Billion

Profitability*

62.7%

A

Sales Growth Rate**

28.7%

A

12-Month Sales

$2.4 Billion

12-Month Net Income

$0.6 Billion

Total Return Past 12 Months

32.1%

Past 36 Months

138.2%

Economic SectorConsumer Discretionary
IndustryApparel, Accessories & Luxury Goods
The overall sector letter grade reflects how the weighted average of the return on income, or return on equity, and sales growth grades compare with others in the same sector. For the overall grade as well as the ROE/ROI and sales growth grades, an "A" places a company in the top 7% of its sector and an "A-" in the top 14% of the sector. The actual ranking was done using the underlying numerical measures. Grades are for information only.
* For nonfinancial companies, three-year average pretax operating profit before interest and special items as a percentage of average invested capital. For financial companies, pretax profits as a percentage of average shareholder's equity.
*Three-year average annual sales growth based on the most recently reported 36 months, calculated using the least-squares method.

Lew Frankfort

Lew Frankfort, 61

CEO since 1995


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Data as of 2/28/07 provided by Standard & Poor's Compustat