Coach And Nu Skin Should Outperform These Consumer Goods Stocks

Includes: COH, DECK, EL, NUS, RL, UAA, VFC
by: Rash Menaria

The following is a list of seven consumers stocks which have shown strong out-performance vs. broader market in the last 3 months.


Company Name

Last 3 Months Gain


Coach Inc.



Estee Lauder Companies Inc.



Ralph Lauren Corp.



V.F. Corp.



Deckers Outdoor Corp.



Nu Skin Enterprises



Under Armour Inc.


I like Coach and Nu Skin the most among above stocks and believe they can continue their out-performance going forward.

Coach, Inc. is a marketer of fine accessories and gifts for women and men. Coach’s product offerings include women’s and men’s bag, accessories, business cases, footwear, wearables, jewelry, sunwear, travel bags, watches and fragrance.

Coach recently reported better than expected 1Q12 results. The key takeaways were continued strength in China, total inventory growth (+13%) below total sales growth (+15%), constant-currency sales growth in Japan for the first time since 1Q11 and Madison collection reaching its highest penetration level.

Coach is benefiting from a strong accessory cycle, which is expected to continue going forward. The company is expected to continue posting strong earnings growth as a result of higher sales and share purchases. The company has further expansion potential internationally particularly in China. Domestically men’s accessories will be a key growth driver for the company. A quality management team and debt-free balance sheet are additional positives for the company.

Nu Skin Enterprises is a global, multi-level direct seller of personal care products, primarily antiaging, under the Nu Skin brand, and nutritional supplements, under the Pharmanex brand. The sales mix is roughly 60% personal care and 40% nutrition. Only 15% of NUS sales take place in the U.S., while Asia accounts for 70%. Thus, the company provides a good emerging market exposure.

The company is seeing strong sales momentum on the back of new product launches and NUS shares have had a strong run YTD. I believe this momentum is likely to continue given the company’s above-average growth prospects and the potential for meaningful near-term upside to earnings. In the near term, company’s staggered launch schedule of its new R2 nutritional supplement offering across Asia during 2012 will support this momentum which started in Q4. In the medium term, a good scope exists in the weight loss category and Nu Skin can see its positive impact from 2013 onwards.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.