(Operator Instructions) Welcome to the Coach conference call. 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.

With me today to discuss our quarterly results are Lew Frankfort, Coach's Chairman and CEO, and Mike Devine, Coach's CFO. 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 quarters and 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 fourth fiscal quarter and annual 2009 results and will also discuss our strategies going forward. Mike Devine will continue with details on financial and operational results of the quarter and year. Following that we will hold a question and answer session where we will be joined by Mike Tucci, President North American Retail. This Q&A session 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.

As noted in our release this morning we were once again pleased to generate sales that were essentially even with the prior year, and encouraged by the continued ability of our comparable store sales in North America through the first half of calendar 2009. Though still early days we are also encouraged by the improvement of our July full priced business notably in North America and Japan where we have seen strong consumer response to Poppy and our broadened assortment of handbags in the $200 to $300 range, supported by comprehensive new marketing programs. Our results for both the year and the quarter demonstrate the resiliency of the Coach model and our commitment to maintaining the integrity of our full price proposition in retail stores even in the face of an extraordinarily challenging environment. This performance also reflects the strength of our franchise and our flexibility in adapting to changing business conditions. This year we have taken the steps necessary to reduce our expense structure while also investing in growth areas such as China in order to position Coach for future profitable growth. Despite the economic backdrop and future uncertainty we remain confident in Coach’s durability and growth prospects over our planning horizon. Clearly the opportunities both hear at home in North America and abroad notably in emerging markets remain abundant. While I will get into further detail about current conditions and the outlook for the category and our business shortly, I did want to take the time to review our year and quarter first. Our performance in FY09 was highlighted by an increase of 2% in revenues. It was a year of many milestones including; first the opening of 42 total net new stores in North America, 33 net new retail stores and nine new factory stores. Second, direct…

Lew was just taking your through the highlights and strategies, let me now take you through some of the important financial details of our fourth quarter results. As mentioned, our quarterly revenues declined just under 1%, with direct to consumer which represents nearly 85% of our business up 3% and indirect down 21% primarily due to lower shipments to US department stores. Excluding the impact of certain unusual items which I will touch on in a moment, net income for the quarter totaled $136 million with earnings per diluted share of $0.43. This compared to net income of $172 million and earnings per diluted share of $0.50 in the prior years fourth quarter. For the full fiscal year earnings per share were $1.91 as compared to $2.06, while net income totaled $622 million versus net income of $742 million recorded in FY08. On the same basis our operating income totaled $220 million, below the $281 million reported last year, while operating margin was 28.2% versus 35.9%. For the full fiscal year operating income was $1 billion even, a 15% decrease from $1.18 billion generated a year ago. Operating margin for the year was 31% flat as compared to 37.1% a year ago. During the quarter gross profit totaled $547 million versus $593 million a year ago. Gross margin rate which met our expectations was 70.4% versus 75.9% a year ago. As planned, we maintained the high level of promotional activity in factory stores which was the primary driver of our lower gross margin rate year on year. Channel mix and the sharper pricing initiative in our full price divisions also dampened margin. We anticipate delivering similarly high rates of gross margin in the coming quarters. For the full year gross profit declined 4% to $2.32 billion from $2.41 billion a…

(Operator Instructions) Your first question comes from Bob Drbul - Barclays Capital

The questions that I have all stem around the top line as you look at the business. The comment that you made around Poppy in July, can you maybe expand upon just how dramatic there was an improvement during the month of July. The second part of that would be can you just talk about in the factory channel the email promotions to factory consumers and how sustainable you think the factory channel is.

What we are saying here at Coach is that Poppy created a positive inflection point for Coach in our North America full price stores and Japan. When we talk about an inflection point it is significant, we’d rather not be specific of course because it’s early days, its four or five weeks and we have a long view. What it does do is reinforce our new pricing strategy to rebalance our assortment as well as the opportunity come out with a broad new lifestyle collection that is youthful in attitude yet appeals to our broad and diversified consumer base. With regard to factory our business continues to be very robust and we feel very confident that we can continue to grow our factory base because we have a very strong consumer who is brand loyal but is looking to buy Coach on a sale. Its effectively a diffusion channel, we do not go on sale in our full price stores so we force the consumer who want to buy Coach and get a full array assortment of Coach, although last year’s product or product made exclusively for factory to go to the factory channel. Its works very well. In terms of emails, what I can say is that it’s a marketing lever for us we’re very enthusiastic about our ability to draw into factory stores consumers who are exclusive factory shoppers and they do respond to price. Again, we do not go on sale in our full price stores.

Your next question comes from Kimberly Greenberger – Citigroup Kimberly Greenberger – Citigroup: Do you have something following Poppy that you think can sustain the momentum that you’re seeing here in July? I know the Poppy collection will live in the stores or do you think it’s that the improvement in full price is really driven by the new pricing strategy and the collections that follow also have that lower price point of view.

I think what we see is Poppy is a nice catalyst for us. It’s created a platform, an energy in the stores; certainly the response has been terrific to the product assortment and the marketing. It’s really part of a much more broad strategy across the board and specifically targeted at building handbags, conversion and penetration in our stores. Interestingly we just release Tribeca and Garnet and these are two, what I would categorize as core groups within the mix, again priced against our new strategy and we’re seeing very strong results with those two groups over the weekend. Again, targeting price points that have been traditionally very strong for Coach $268, $298, $328, and $358 to build this presence. What we feel strongly about going forward is sustaining momentum in Poppy and building the foundation at $300 for the long term. You’re seeing us very quickly react to what’s going on in Poppy by flexing our on order, moving goods through the pipeline. We don’t see it as a specific reorder business but we do see it as a newness and excitement business. We’re reinvesting in 10-1 and 11-1 in our pipeline today and we’ll turn those products around very quickly. What I think is also important to note, the marketing and positioning campaign both in traditional print and digital media as well as our in store presence you’ll see us replicate that again specifically in Q2 with a strong Poppy message and a very broad gifting message. I believe it’s just the beginning of what we’re doing and use Poppy as kind of a benchmark for how we’ll launch products going forward. Kimberly Greenberger – Citigroup: On gross margin, could you help us understand the sort of relative weight of the three different contributing factors to the gross margin pressure here in the fourth quarter?

Of the more than 500 basis points of year over year decline, slightly more than half of that is going to be driven by the increased level of factory promotions. I would say the remaining let’s call it half is roughly split between channel mix and sure margins on the sharper price product in the full price divisions. Let me quickly say, however, that since that time and since the product had sold through in Q4 in the full price divisions our supply chain, our merchandising and design teams, everyone involved here in getting product into the stores, has done a magnificent job to work on the full price sharper price selections to move the gross margin rates back to longer term more acceptable Coach levels. With the state of the world the way it is today and the receptiveness of our suppliers, etc. I’m happy to say as an example the Poppy collection has a gross margin rate that is quite consistent with the balance of the full store chain. I do think that there is some opportunity in that third metric that caused the fourth quarter decline as we move into the fiscal year. Kimberly Greenberger – Citigroup: You were not seeing any of the deflationary trends benefit the fourth quarter but they should start in first quarter?

Correct. The product that we’re selling through in the stores now is showing in the full price collections that are “sharply priced” generating higher gross margin rates then what we had in Q4.

Your next question comes from David Schick – Stifel Nicolaus David Schick – Stifel Nicolaus: On China, what’s really selling there, you talked about the big comps? How is the brand positioned there, is it similar to Japan or how should we think about that?

What’s selling well in China is what’s selling well worldwide. Poppy is doing extremely well as are our other ranges. We are positioned similarly in China as an acceptable luxury brand, targeting the growing middle class professional female who is looking for great product that is relevant to her lifestyle at an excellent value. What we’re finding is that our business and product is resonating very well with the emerging middle class in China.

Your next question comes from Christine Chen - Needham & Company Christine Chen - Needham & Company: With Poppy, could you just share with us, is it attracting the younger customer that you were hoping it to attract? I know it has broad appeal but are you seeing addition of new customers?

I think Poppy is absolutely appealing to a younger consumer as part of the story. I say that because we’ve been spending a lot of time in our stores working with the consumer, watching her and we’ve also been spending an enormous amount of time online dialoguing with the consumer through some of the social media sites, Facebook as an example. She’s very engaged, she’s excited. That’s not the total story though; Poppy has a strong foundation of product that appeals to a very broad range of Coach consumers. That’s really important, we have hallmarks in Poppy like classic signature, pop art, very important trim details, and things like our turn lock that we’ve given a new sort of energy to. That rings truth through the entire collection; I think it offers us an opportunity to speak to the Coach audience in a very powerful way. We’re pleased with the consumer response and we also believe that part of our traffic improvement is really excitement around Poppy and what it brings to the brand and what it brings to the store from an environment standpoint. Christine Chen - Needham & Company: Could you share with us how same store sales trends progressed during the quarter? I would assume that June, even though it was just the last part of June, that June showed a bigger improvement over April and May trends?

Actually to be clear, Poppy hit on literally the last Friday of June so I wouldn’t attribute June’s performance as anything that happened with Poppy.

We had two days in the quarter.

We did spend a lot of time in June setting Poppy up in terms of launch activity and marketing activity but the true impact of Poppy is coming with the July floor set. Christine Chen - Needham & Company: What about quarterly trends for same store sales?

Quarterly trend for us was very consistent throughout the quarter. We didn’t see a lot of wavering there. It really held in both full price and factory our trends held very consistent throughout the quarter and consistent with what we saw in Q3.

Your next question comes from Liz Dunn – Thomas Weisel Liz Dunn – Thomas Weisel: A follow up on the question surrounding the improvement related to Poppy. You saw traffic improvement, was there also a conversion improvement? Can you talk us through some of the gives and takes around increasing handbag penetration but at lower prices? Will the net effect of that have sort of a neutral impact on transaction value or how should we think about that?

You actually answered your question within your question. It absolutely what the goal has been for us. The broadest goal for us is to improve productivity in our full price stores. Behind that is an object to drive handbag penetration in our stores and drive handbag conversion that’s our brand hallmark, that’s the foundation of the brand. What we’re seeing is handbag penetration improving, unit sales in handbags from a run rate standpoint improving which has a virtuous positive impact on average dollar transactions. As the handbag becomes a greater portion of our overall transaction it helps us to drive productivity and that’s what we’re seeing. I think what we want to build on is an improvement in visitation in our stores, work with that consumer, develop the relationship with her and then ultimately as we improve conversion we think that that is a driver of restoring productivity in our stores as well. Liz Dunn – Thomas Weisel: Will you continue to have many of these events like you’ve been having for Poppy?

We will. We’ll continue to focus on things like preview events. We will also use very dynamic web marketing to drive events in store, things like pre-sell, some of the gift with purchase ideas, we’re absolutely committed to that and we will fund that going forward. I don’t want to totally dodge your conversion question, it is early but I would say that what we’re happy with is a sequential improvement in conversion performance. That’s important for us to continue to monitor and as you know an important driver of comp.

Your next question comes from Dana Telsey - Telsey Advisory Group

Congratulations on the improvement and traction you’re seeing, I was in Tokyo just a few weeks ago and I saw the excitement from the Poppy collection. What are you seeing the impact of Poppy in other channels, wholesale, online, and do you see Poppy at all going into factory and as you get leaner in inventory at factory do you keep factory excited with other merchandise, how do you see that trending?

To answer the second part of your question first, we don’t have any plans in the foreseeable future to put Poppy into our factory stores, it will stay out of factor stores indefinitely. We see it as a sub-gram, as I mentioned earlier and you were in Japan and you saw the excitement there, we are going to be opening Poppy stores in Japan and possibly here in the United States as well at some point. As we experience more we’ll fine tune our strategies and refine our thinking. With regard to other channels, we’re finding that Poppy is doing extremely well. In wholesale channels we tend to measure performance by sell through rates weekly and what we’re finding is that Poppy is selling through at two to three times the rate that prior collections last quarter sold through. Everyone wants more Poppy and we’re developing a rapid response program to get back into Poppy everywhere. In Japan we have a robust backorder program, similarly in the US we’re developing one and we think Poppy will be a continuing success story throughout the entire fiscal year.

Your next question comes from Laura Champine – Cowen Laura Champine – Cowen: Looking at your comments on SG&A expense this year and that they’ll be $50 million flow through of savings offset by some investments. If I run that investment through the numbers you gave it seems like you still have an opportunity for SG&A improvement but I know you’re investing in marketing and other things. Do you think it’s possible you can actually take SG&A expense down year on year in fiscal 2010?

With our conservative planning and where we are right now we don’t see that happening. We have made major strides though, I have to say, I couldn’t be more pleased with the way the business is operating in these challenging times. Perhaps the most exciting work really has been done in the field and in the selling teams where we actually have seen us move the needle significantly on the leverage point required for our SG&A line. As an example, if you followed us for some time you may recall that we used to talk about North American retail store chains needing about 5% to 7% comp to deliver SG&A leverage to their own P&L. With the fabulous work that’s been done there largely around labor management, the great rent negotiations that we’ve had, the great new deals we’re booking on the new stores that we’re opening and just the fact that we challenged every line item on the store P&Ls. I think that we will see moving into FY10 that we can deliver leverage to the retail P&L which is roughly a flat comp. Real, real progress has been made. Similar things happening in Japan where the cost cutting and expense spending review is fantastic so real, real progress has been made. None the less, with the investment that we’re making in new stores and the investment in China and Reed Krakoff its unlikely that we’ll get to a flat SG&A number next year but we’re going to continue to work hard and see what we can bring home.

Your next question comes from [Rick Battell] – BAS-ML [Rick Battell] – BAS-ML: Can you just update us on how your sourcing relationships are changing? Do you plan on sticking with the countries and vendors you’ve been working with or do you plan to seek lower cost options?

We have a broad constellation of partners that constitute our sourcing base and many of them who are entrepreneurial actually have migrated with us to lower cost areas. While we always look for new partners to work with we do have a very broad and diversified group of our suppliers who are working with us to establish significant capabilities in our Vietnam, India, and other parts of China where costs are lower. The key is to maintain quality and so we put as a premium those people who we have worked with in the past who understand the Coach way and our requirements. [Rick Battell] – BAS-ML: Can you update us on your inventory plans going forward? Perhaps are you thinking about inventories both on a dollar and unit basis as you prepare for the holiday season?

We’re very pleased with the way the second half of fiscal year ’09 ended. We’re able to manage the inventory flat on a year over year basis with significantly higher store base in North America, Japan and of course we took over the 28 stores in China. To get flat on dollars and units versus where we were coming out of December was a real accomplishment for the team. We’ve gone into FY10 with a conservative approach against this very challenging macro economic backdrop but we are in a position now of looking at chasing, its something we as an organization did exceptionally well over the year as we changed comp as the business was so strong in the past that’s something that we’ll look forward to doing again. We have Jerry Stritzke, our COO and Angus McRae the head of our supply chain looking at and working very hard against that initiative. As Mike talked about earlier we’re looking to get back into Poppy in a bigger way by October and again in February. I think we’ll continue to see very, very good inventory metrics as we go through FY10.

As it is now 9:29 am I’m going to thank everyone for joining us today and I’d like to turn it back over to Lew for some closing words.

Thank you everybody. The big story of course is Poppy, as evidenced by your comments. Really the larger story is the rebalancing of our assortment to bring great product to consumers at much more compelling prices to address a consumer who is more cautious and reluctant to spend. We’ve been working on this strategy for the last nine to 12 months and it’s exciting for us to actually bring product into the market and see the early results which are in keeping with our expectations. We shared with your previously that it’s our intention to emerge stronger from the adversity we’re experiencing and we’re committed to doing that. Thank you everyone and have a good day.

This does conclude the Coach Earnings Conference. We think you for your participation.