Michael Kors Holdings Ltd (KORS) or Coach, Inc. (COH) in 2013?

Global expansion
If there’s one area where both Coach and Kors are finding growth, it is in international markets. Both brands are experiencing success abroad in key markets such as Japan and China. Coach’s sales in China increased by 40% in the most recent quarter, while same-store sales out of China grew at a double-digit rate.

Coach ended fiscal 2012 with 205 international shop locations in more than 20 countries, and 180 department store shop-in-shops and factory stores operated by Coach Japan. Cross-border growth should give the company a boost in the quarters to come, as Coach continues to expand its operations to more countries outside of the U.S.

As for Michael Kors’ global footprint, the company currently operates 320 stores worldwide. However, 250 of those stores are within the United States. Therefore, the Kors brand has a much wider runway for growth in international markets than Coach. That said, both of these companies’ global businesses represent significant opportunities for growth in the future.

The stock to own
I typically favor growth stocks, such as Michael Kors, but thanks to the recent dip in Coach’s share price, I think it is the better buy now. Both of these companies benefit from strong brands and healthy balance sheets.

As the “it” lifestyle brand of the moment, Michael Kors’ share price has more than doubled since its stock market debut in 2011. But with all this growth, has the stock become too expensive?

The article Kors or Coach in 2013? originally appeared on Fool.com and is written by Tamara Rutter.

Fool contributor Tamara Rutter has no position in any stocks mentioned. The Motley Fool recommends Coach. The Motley Fool owns shares of Coach.

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