Put Me in Coach, Inc. (COH)

Coach, Inc. (NYSE:COH)It wasn’t exactly a ten-bagger, but it was darn good nonetheless.

Coach, Inc. (NYSE:COH)’s latest quarterly results handsomely and handily beat expectations. The beat sent shares soaring some 10%.

Profit for the luxury handbag maker’s fiscal third quarter rose 6% to $239 million. Revenue grew 7% to $1.19 billion. Sales in North America jumped 7% to $792 million. International sales grew 6% to $382 million.

In addition, Coach, Inc. (NYSE:COH) sweetened its dividend 13% to $1.35 a share. The stock now yields an appealing 2.14%.

Indeed, analysts were impressed with the quarter. The accolades were plentiful. The Wall Street Journal reported seven analysts (a sort of record) showered the company with congratulations and virtual pats on the back during the earnings conference call

Wall Street also liked the announcement that a new coach will take charge of the Coach, Inc. (NYSE:COH) team in January of next year. A new creative director will also be anointed.

It’s almost like we should expect a whole new Coach.

A new clothing line is set to launch in October, just in time for the holiday shopping season.

The aim is to make Coach, Inc. (NYSE:COH), which sells handbags for as much as $1,200, more competitive with the likes of Michael Kors Holdings Ltd (NYSE:KORS) and privately held Kate Spade and Tory Burch.

Michael Kors had a very fashionable debut in December 2011 when shares opened at $25, well above the expected $17-$19. Shares have since peaked at a lofty $65.10 and currently change hands around $54 a share.

A handful of firms still find shares attractive. Goldman Sachs reaffirmed its conviction buy rating on shares of Michael Kors Holdings Ltd (NYSE:KORS) on March 18, giving the stock an attractive $80 price target. Avondale Partners recently upped its rating from a market perform to an outperform. And Citigroup on March 12 reiterated its buy rating on shares with a $75 price target.

But it should be noted that founder and famed designer Michael Kors Holdings Ltd (NYSE:KORS) has sold some 16 million of his shares and presently holds a scant 2.4%, or 4.85 million. Before the IPO, Kors held 22 million shares, or 11.7%. Could be he is simply pocketing gains. But it could also be something more suspect.

While not a direct competitor, Vera Bradley, Inc. (NASDAQ:VRA) is worth a mention here. An American design company best known for its colorful patterned quilted handbags and accessories, shares tend to trade in tandem with Coach.

The Fort Wayne, IN based company has more than 3,500 retailers and standalone Vera Bradley, Inc. (NASDAQ:VRA) stores, plus 11 outlets. Founded in 1982 by Barbara Bradley Baekgaard and Patricia R. Miller, the brand inspires women to “be colorful” with designs that reflect their personal style.

Fiscal fourth quarter earnings showed revenue grew at 17% and earnings at 19% year-over-year. E-commerce was a particularly bright spot with sales increasing 23% on strong web traffic. For the whole fiscal year of 2013, some 62 million perused the company’s website.

Forward looking, Vera Bradley, Inc. (NASDAQ:VRA) expects to generate revenues of $120-$122 million, the midpoint of guidance. Revenues are forecast to increase a slim 3.2%. The stock can be volatile, with big swings following earnings. Shares look inexpensive with a P/E of 12.87, especially when compared to Michael Kors Holdings Ltd (NYSE:KORS)’ P/E of 31.85.

Vera Bradley, Inc. (NASDAQ:VRA) continues to expand with store openings and new lines. Long-term, shares look enticing.

However, at the moment, Coach, Inc. (NYSE:COH) looks like the best bet. Its newly expanded men’s line has been fruitful, and exciting things are planned for the future. As Women’s Wear Daily explained, Coach is entering a “transformational” period.

Look for expanded collections of handbags, shoes, men’s and women’s apparel, outerwear, watches and jewelry. Coach will also be streamlining the atmosphere of its stores and marketing strategies to lure customers.

Coach, Inc. (NYSE:COH) is in it to win.

The article Put Me in Coach originally appeared on Fool.com.

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