A Fast Growing but Extremely Expensive Fashion Stock: Coach, Inc. (COH), Ralph Lauren Corp (RL), Michael Kors Holdings Ltd (KORS)

Coach is the most efficient

Among the three, Coach, Inc. (NYSE:COH) seems to have the most efficient operations. In the past twelve months, Coach generated the highest operating margin at 31.4%. Ralph Lauren had the lowest operating margin at 16%, while the operating margin of Michael Kors stayed at 28.2%. In addition, Coach could turn its receivables and inventory into cash much quicker than the other two. In the past twelve months, Coach’s cash conversion cycle (CCC) was 102.2 days, while Ralph Lauren Corp (NYSE:RL) experienced the highest cash conversion cycle of nearly 122.8 days. The CCC of Michael Kors was in between, around 116.9 days.

Foolish bottom line

At the ridiculously high multiple, I personally do not think investors should invest in Michael Kors at its current price. Among the three fashion retailing companies, I like Coach the best due to its lowest valuation and the most efficient operations.

The article A Fast Growing but Extremely Expensive Fashion Stock originally appeared on Fool.com and is written by Anh HOANG.

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