Coach, Inc. (COH)
Q2 2010 Earnings Call Transcript
January 20, 2010 8:30 a.m. ET

Executives

Andrea Shaw Resnick – Senior Vice President of Investor Relations and Corporate Communications
Lew Frankfort – Chairman of the Board & Chief Executive Officer
Michael F. Devine, III – Executive Vice President, Chief Financial Officer, & Chief Accounting Officer
Michael Tucci – President, North American Retail

Analysts

Robert Drbul - Barclays Capital
Kimberly Greenberger – Citigroup
Adrianne Shapira – Goldman Sachs
Lorraine Hutchinson – Bank of America/Merrill Lynch
Michelle Clark – Morgan Stanley
Neely Tamminga – Piper Jaffray & Co.
Christine Chen - Needham & Company
David Schick – Stifel Nicolaus & Co.
Liz Dunn – Thomas Weisel Partners
Randal Konik – Jefferies & Co.
Dana Telsey - Telsey Advisory Group

Presentation

Operator

Good day and welcome to the Coach conference call. Today’s call is being recorded. At this time, for opening remarks and introductions, I would like to turn the call over to Senior Vice President of Investor Relations and Corporate Communications at Coach, Ms. Andrea Shaw Resnick. You may begin.

Andrea Shaw Resnick

Thank you, Shirley. Good morning and thank you for joining us today. With me to discuss our quarterly results are Lew Frankfort, Coach''s Chairman and CEO, and Mike Devine, Coach''s CFO. Mike Tucci, President of North American Retail, is also joining us.

Before we begin we must point out that this conference call will involve certain forward-looking statements including projections for our business in the current and future quarters or fiscal years. These statements are based upon a number of continuing assumptions.

Future results may differ materially from our current expectations based upon risks and uncertainties such as expected economic trends or our ability to anticipate consumer preferences or control costs. Please refer to our latest Annual Report on Form 10-K for a complete list of these risk factors. Also, please note that historical growth trends may not be indicative of future growth.

Now let me outline the speakers and topics for this conference call. Lew Frankfort will provide an overall summary of our second fiscal quarter 2010 results and will also discuss our strategies going forward.

Mike Tucci will then review the holiday season from a US retail perspective and discuss key initiatives for the spring season ahead. Mike Devine will continue with details on financial and operational highlights of the quarter. Following that we will hold a question-and-answer session that will end shortly before 9:30 a.m. Lew will then conclude with some brief summary comments.

I’d now like to introduce Lew Frankfort, Coach''s Chairman and CEO.

Lew Frankfort

Thanks Andrea, and welcome everyone. As noted in our release this morning we were very pleased with our holiday results including strong sales and earnings growth and the return to positive comparable store sales in our North American retail business where trends improved through the quarter.

Our performance clearly demonstrates the traction of the product and pricing strategies we put into place and bodes well for future growth. Beyond the top line we were also very pleased with our high levels of profitability and substantial cash generation in the quarter.

It’s important to note that we achieved these results despite the challenging retail environment. The consumer in North America remains cautious. She is more value conscious than ever. Fortunately our multi-channel distribution model is diversified and includes substantial factory store and international businesses.

The strength of our consumer franchise, flexible business model, and strong balance sheet gives us the ability to adapt our strategies to make the right decisions for the long-term. As we continue to emerge from this downturn we are well situated to build upon our leadership position and continue to gain market share as a growth company.