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Avoid Apparel Except For This One Stock

The GICS 'Apparel, Accessories & Luxury Goods' subindustry has been in a bear market for some time now, decreasing almost 40% in the last three years. The poor performance is illustrated by the chart below which shows the historical average share price for the seven S&P 500 companies in the subindustry. These companies are: Coach, Inc. (NYSE:COH), Hanesbrands Inc. (NYSE:HBI), Michael Kors Holdings (NYSE:KORS), PVH Corp. (NYSE:PVH), Polo Ralph Lauren Corporation (NYSE:RL), Under Armour, Inc. (NYSE:UAA), and V.F. Corporation (NYSE:VFC).

Coach, a luxury handbag and accessories designer, is the only company in the group that is bucking the downward trend, after delivering better-than-average results in the latest reporting period. The company has been reaping the rewards of a make-over, which includes closure of underperforming U.S. stores, reducing number of promotional events, product price adjustments, and rejuvenation of the Stuart Weitzman division. The turnaround is evident in the quarterly revenue and EPS charts.

Fundamentals

The table below provides a summary of fundamental factors for Coach and the industry average of the seven companies. Results highlighted in green are considered to be better.

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by Steve Auger