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Coach, Inc. Message Board

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  • gnomebah2 gnomebah2 May 8, 2008 2:25 PM Flag

    Nordstroms just missed big time

    I like your thinking Ballf...when do yo think we can break the 36 level...I feel it might take some time...Christmas? maybe sooner...I guess it depends on earnings then ext few really is all about earnings and returns on invested capital/equity.

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    • Thanks - and I do not know what sentiment will evolve as we move further in to this election season. That is the $60K question. We could return to 1.6 on the GDP quarter but all the talking heads will pound even harder the price of gas and the ongoing credit crunch.

      It's a crunch all right - for the institutions dumb enough to buy crummy paper. And those poor souls who got into an adjustable with questionable income/mortgage amount ratios. I can remember Greenspan saying guys like me were dumb for having a fixed.

      Yet, this applies to all. It does not. It applies to relatively few, about 5% of the mortgages out there. And it has transferred to the whole market, every industry, every sector, retail, etc?

      That's irrational negativity and just as bad as irrational exuberance, as Greenspan liked to say about the 90s.

      Fact is, the vast majority of middle and upper-middle class income families are not in trouble. This is COHs demographic with more share going to the upper middle and upper income consumers.

      Back to your question. I worry not about COH performance - it will be there. The main thing is when is COH going to quit getting hammered on irrational negativity?

      I believe next quarter the truth will be too hard to ignore and all this negativism will fall by the wayside.

      When it does, the numbers will come back: $2.08 x 25PE may be a bt overly optimistic since there is such a drumbeat of negativity in the press; surely north of $40 by end of summer is what I expect.

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