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 Global Head of Investor Relations and Corporate Communications at COACH, Andrea Shaw Resnick.

Good morning and thank you for joining us. With me today to discuss our quarterly results are Victor Luis, COACH's Chief Executive Officer; Francine Della Badia, President, North America Retail and Jane Nielsen, 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 or 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. Please refer to our latest Annual Report on Form 10-K and our other filings with the Securities and Exchange Commission for a complete list of risks and important factors. Also, please note that historical trends may not be indicative of future performance. Now, let me outline the speakers and topics for this conference call. Victor Luis will provide an overall summary of our first fiscal quarter 2015 results, and will also discuss our progress on global initiatives. Francine Della Badia will speak to our North America business, product performance and review our key programs for the Holiday season. Jane Nielsen will conclude with details on financial and operational results for the quarter and our outlook. Following that, we will hold a question-and-answer session, the Q&A session will end shortly before 9:30 AM. We will then conclude with some brief summary comments. I'd now like to introduce Victor Luis, COACH's CEO.

Good morning. Thanks Andrea and welcome everyone. As noted in our press release, our first quarter results were in line with our expectation and our annual guidance at continued international growth was offset by our North American handbag business where we have strategically reduced promotional events. Importantly, we made progress on the transformation planned outlined during our Analyst and Investor Day this summer to address brand challenges and bring greater fashion relevance to COACH across the three pillars of product, stores, and marketing. The launch of Stuart Vevers first collection in September was a significant milestone in this journey and we look forward to building on our early success over the upcoming seasons. While we recognize that many of our initiatives will take time to be evident than our financial results, our performance to-date has been on plan and we are confident that we have the creative direction, team and resources to execute our brand transformation. Before we get into the details of the quarter and as promised, I thought we would share some of the actions we have taken in just the last three months. Starting with product, as mentioned we launched fall 2014 collection and retail stores globally on September 12th as planned with the full assortment including ready-to-wear introduced an approximately 40 global flagships also as planned. While at his early days, the fall 2014 product introductions are performing to expectations. In addition, we held our second event, New York Fashion Week presentation in early September showing our spring 2015 collections to The Fashion Press and once again the press was overwhelmingly positive building on the response to Fall 2014 and driving fashion, credibility and buzz. The key to elevating the brand perception in the mind of the consumer. We are also on track to launch Stuart's…

Thanks Victor. The first quarter marked the implementation of many initiative we outlined to the Analyst Day, to change and elevate brand perception in the minds of our consumers. In the early days, the impact of these actions played out as expected both globally and in North America. Domestically, we kicked off our semi-annual sales strategy at the end of Q4 and ran it through the first couple of weeks in July. Q1 was the first quarter that we curtailed preferred customer events. As forecast, this impacted conversion rate to the quarter, while traffic trends remained weak on a year-over-year basis. Given the shift in the type and cadence of promotional activity and as anticipated, average unit retail rose as did average transaction size. Bear in mind that the new product arrived in stores in week 11 of the 13 week quarter that would had little impact on results. In outlet stores, the overall environment was definitely more promotional especially in our space with our competitive set becoming even more aggressive, traffic levels were weak and conversion was negative while ticket was up slightly. We did see a very positive consumer response to our new Kuwait collection which carried a higher AUR underscoring the premise that emotion can trump price even in outlets. As planned, our store comp was down high-teens with our total comp pressured an additional five points by DOS as we pulled back from three flash sales events a week to only one event per week. Over the year, we expect our store comp trend to improve as new product penetration growth across both channels, more stores are re-platformed and marketing intensifies. However our internet comp were worsen as we further curtail events. As discussed, evolving brand perception is critically important in North America notably for women’s…

Thanks Fran. Turning now to our international segment which represents about a third of COACH's business. Sales rose 6% on a constant currency basis in the first quarter and 4% on a reported basis primarily impacted by the weaker yen on a year-over-year basis. As mentioned, China sales rose 10% from prior year with positive comparable store sales and slower distribution growth in line with our forecast. We remain very optimistic on the prospects for this market overtime as long-term drivers remained intact including a rapidly growing middle class and overall shift from pure stated to value favoring the affordable luxury segment and the evolving retail landscape with the development of new luxury shopping malls. However, we understand that there will likely be continued volatility in the near-term due to both macro issues and geopolitical events which are impacting trends in China and some key tourist markets notably Hong Kong and South East Asia. While we are still targeting China sales of about $600 million for FY15 driven primarily by distribution growth, current conditions are limiting visibility to PRC consumer travel and shopping patterns especially in Hong Kong driving more variability on a quarterly basis. To this point, our other Asian direct businesses outside of China and Japan, South Korea, Taiwan, Malaysia and Singapore posted positive aggregate growth though the region experienced a slowdown in traffic impacted by shifting trends in PRC consumer travel as well as weak inbound travel into Malaysia given the sustained impact from the airline investors. As expected, in Japan we posted a 7% decrease in constant currency due in large parts to the continuing impact of the April consumption tax increase. Dollar sales declined 12% reflecting the weaker yen. In Europe, where our brand is small but growing rapidly, we generated significant sales growth and…

Thanks, Victor. Victor was just taking you through the highlights and strategies. Let me now take you through some of the important financial details of our first fiscal quarter results as well as our outlook for FY15. Our quarter revenues declined 10% with North America down 19% and international up 4%. As noted on a constant currency basis revenues decreased 9% overall with international sales up 6%. Excluding transformation and other related charges, net income for the quarter totaled 146 million with earnings per diluted share of $0.53, this compared to net income of 218 million and earnings per diluted share of $0.77 in the prior year's first quarter. For the quarter, operating income totaled 270 million on a non-GAAP basis versus 322 million last year while operating margins was 20.9% versus 27.9%. During the quarter, gross profit totaled $719 million as compared to $827 million a year ago while gross margin was 69.3% versus 71.8%. SG&A expenses as a percentage of net sales totaled 48.4% on a non-GAAP basis compared to 43.9% in the year ago quarter. As I turn to GAAP metrics, let me recap key transformation and other related charges. As previously announced we expect to incur pretax charges of approximately $250 million to $300 million associated with our transformation plan. A portion of which were reflected in our fiscal fourth quarter 2014 results and we expect the remainder to be largely incur during FY15. These changes are related to inventory and fleet related costs primarily in North America including impairment, accelerated depreciation and severance cost associated with store closures. In total, we expect to capture $70 million in savings related to our transformation initiatives in fiscal 2015 and approximately $150 million in ongoing annual savings in fiscal year 2016. As you may recall, during the fourth…

Thank you. (Operator Instructions). The first question is from Bob Drbul with Nomura.

Hi. Good morning.

Good morning Bob.

Here is the question that I have is beyond Q1 how has the response to the new product been in retail stores and specifically have you seen a change in retail store comp trends?

Good morning Bob. Thanks for your question and for being with us as usual. We have of course been following the performance very closely as Fran mentioned we have seen and are very pleased with our performance which really reflects the initial signs to product across the channel. When we look at the performance in the first quarter it's very difficult of course to read clearly because of the shift that we have taken in our promotional activities. As we mentioned we had our semi-annual sales of first two weeks of the quarter and no promotional events for the remainder of the first quarter. As we come into October, what we have seen is continued great performance across the new product. We as Fran mentioned have seen positive signs in performance across the new styles in fashion, novelty and core and positive comp across the above $400 performance but very difficult to see with the shift in promotion.

Okay, thank you.

Thank you. The next question is from David Scheck with Stifel. David Scheck – Stifel: Hi, good morning. I just need to say that there is a lot of moving parts in answer to Bob's question, but any estimation of the impact on tails or comp from the reduction of the COACH days and the DOS in North America.

In terms of the reduction of DOS as Jane mentioned the impact was 5 comp points. The COACH days were only in our wholesale channel, David. David Scheck – Stifel: I'm sorry in wholesale.

Yeah, which really was an impact of depending on the chain anywhere from 20 to 25 days that we reduced. So approximately one-third of almost one-third of total days where we had promotion last year that we didn't have this year and in general as we mentioned in our speakers notes, the performance was pretty much in line with what we saw in our own stores where we also reduced all of the PCE events from last year. David Scheck – Stifel: Okay. You mentioned the comp positive above 400. Could you talk about how that looked a year ago and over the last year and how much of it change in trend you're seeing in the above 400?

Sure, Fran.

Hi, good morning. As we said on the call, the above 400 is about 30% of our sales this year versus 21% last year. So we are seeing a great response to the elevated product and the forecast that will continue to see the trend rate in this category going forward. David Scheck – Stifel: I guess my question is, was the above 400 price point. If you could talk about over the last... the prior 12 months not the last quarter but the prior 12 months. How was that trending as a contributor or a drag to comp? Now that it's obviously comping positive in your comping, were your comping it's a huge, it's usually different to the positive sides. So where was that $400 and above comp over the prior year or so?

Yeah, so we've actually been talking about the positive response that we've been having through products above 400 for the past year. What we are seeing now is even stronger performance in that category so it has been above 400 a category that has been performing well for us over the past year and we saw... as we mentioned in the positive comp trend this quarter which we wanted to call out as a response to the new product that we launched with Stuart's first collection. David Scheck – Stifel: Right, any sense of the magnitude in the difference between the prior and the now updated positive comp. That's what I'm really trying to get to.

Yeah, we are calling it a positive comp. So without any more specific surrounded. We are very pleased with the performance in that location. David Scheck – Stifel: Okay, thank you.

Thank you. The next question is from Barbara Wyckoff with CLSA.

Hi, everybody. Could you talk about the performance in the outlet stores in first quarter as the product has been cleaned up? Can you talk about the comps excluding DOS and then secondly can you talk about China the impact on stores in the Hong Kong area with a demonstrations and have you seen any transfer of business outside of Hong Kong and could you recap the number of stores by city tier in China.

Thanks for your multiple questions Barbara as usual. Let me start with China and then I'll hand off to Fran on North American factory and what we are seeing there. In terms of China and Asia overall, what we're seeing is very much, what we're all reading in terms of the geopolitical and macroeconomic situation. We continue to target positive comps and about $600 million in sales for this fiscal year as we said during our notes. But we are seeing tremendous variability and performance and that of course is especially true in Hong Kong where we did have a couple of closures of a few key locations at certain points during the demonstrations, but the biggest impact of course has been in tourists flows across the region. What we're seeing is a fewer tourists into Hong Kong and Macau as well as continued decreases into South East Asia some of that again due to some geopolitical events in that region and of course in Malaysia due to still some impact from the airline disasters. We are seeing some uptick in tourist flows into Taiwan and into Korea but truly not enough to mitigate the -- not at the same level as the decreases that we're seeing especially in the key markets of Hong Kong. Saying all of that Barbara as you know it's very resilient economies I think that while there maybe this short term variability our confidence in the long-term opportunities of China and especially of the Chinese consumer globally is very, very strong. We continue to see incredible growth in the middle class there. We continue of course to see very, very good development of the retail infrastructure which offers a lot of opportunities. I am constantly reminded of the fact that we bought our business back in 2008 at the peak of the economic crisis and made very important decisions to invest. China will also benefit from all of the great work that we're doing in brand transformation and we're very much taking the same position of looking to invest and drive our brand relevance further in that market. I'll now pass on to Fran I think you had Barbara one more question on distribution by tiers. We today have a 136 locations on the mainland, the vast majority of our doors are in tier 1 and tier 2 cities with 37 locations in tier 3 and 4, the remainder in tier 1 and 2.

Thanks.

Barbara to answer the questions about outlet just first as a reminder we don't disaggregate comp performance in North America direct so I'll just go right to the product performance last month. We launched new product collection called Collect which was largely a leather based full price inspired product which performed extremely well at the higher end of our AUR offering in outlet and last week we just launched CB again a very strong leather based collection in a ray of color. And we're seeing very, very strong performance in that product over through this past weekend. In terms of stores impact on factory, we had focused first on full price, Stuart design for outlet products will arrive in a small way right before holiday. And then we will launch more Stuart designed product for outlet beginning in the spring.

Thank you.

Thank you. The next question is from Ike Boruchow with Sterne, Agee.

Good morning.

Hi. How are you doing good morning everyone? Thanks for taking my question. I just have my question was on the gross margin lines. So you guys are doing a very good job pulling back from the promotions at the private client events and the outlet DOS. So my question is the core gross margin is still down 250 basis points so this clearly got to be an offset to the benefits you're getting from being less promotional. Is that sourcing, is that off price sales I mean can you just help us understand exactly what's going on in a gross profit. Thank you.

Yes Ike. So what you saw is about the 260 point decline in our gross margin. Importantly while we are pulling back in promotion activities we did versus last year about a 100 points of pressure from North America outlet in higher product and sourcing cost accounted for the other half. As we said in Analyst Day we're continuing to invest in our products and innovation, quality and putting value in our product for our consumer and then FX was the remainder.

Got it. Thank you.

Thank you. The next question is from Omar Saad with ISI Group.

Hi. Thanks. Good morning guys. Wanted to ask about the new product and how we should think about its flow through into that outlet channel and that consumer base going forward whether it's next year and then how we think about the impact there?

Sure, Omar I think in reference to Bob's first question as well the good news is that our product is basically performance truly per our plan. And so our plan was of course to take core style such as the ED such as Crosby which are really core styles that will be multi-seasonal and bringing newness and novelty to off the season and then that seasonal product will then flow into outlet through following being in our semi-annual sale first and for most which is the new part of our strategy compared to prior seasonal. So then what we are not doing through the PCE events of course will lead to some promotional activity through the open sale which we will have at the end of each season. The first event of which we had at the end of fourth quarter beginning of the first quarter where we've had a lot of learning that we're now leveraging of course into our next event. One of the key learnings that I might add was the recruitment of new consumers that we saw coming in through the open sale which really bodes well of course for how that seasonal product tend serve as a recruitment tool for that more value conscious consumer as well in key metropolitan areas.

That's very helpful. Thanks Victor.

Thank you. The next question is from Oliver Chen with Cowen. Oliver Chen- Cowen & Co.: Hi, thanks a lot. Regarding Stuart and the opportunity you had an outlet. What are your thoughts on how he's going to evolve product with respect to pricing and on your candid comments about the competitives what we've noticed is a lot of competitors competing really strongly on price. So what are your thoughts on the big opportunity in terms of the comp lever you've seen in this environment and in outlet?

Thank you Oliver. Glad to hear from you. We of course a very conscious of bringing value to the consumer and that will happen through not only sharp price points but of course by bringing them value as well through quality. As think you heard Fran mentioned one of the wonderful collections that we've launched this past quarter Collette where we've seen truly great consumer reaction to has been at a much higher AUR than our other collections. But of course we also are very focused in and as a theme not only in the outlet but also in retail and meeting the needs of our core consumer. In the case of outlet, we have increased newness coming through Fran mentioned Margo which launches in December that will be followed by a series of other collections throughout the spring and that will be at various price points from the shoppers one at a 100 and below right on up through suggested retails or I should say AURs at approximately 200 to 300 as well. Oliver Chen- Cowen & Co.: Thank you. And we're pretty excited about where the men's product looks. Could you just remind us about how you feel about the long-term percentage of mix and where that can go? Thank you.

Sure so for us we're in the 14% to 15% range today, the total market for men's represents approximately 18% of the $40 billion premium handbag and accessories markets. We see ourselves of course getting to that and a targeting as I mentioned in my notes Oliver by the end of '17, a $1 billion in sales. Oliver Chen- Cowen & Co.: Thank you very much. Best regards for the holiday season.

Thank you Oliver.

Thank you. The next question is from John Morris with BMO.

Thanks and my congratulations on your hard work and progress so far.

Thank you John.

Question I think for Jane on the SG&A just to go back and touch base on that. It looks like it was coming in below your expectations and below where the Street had modeling it and when I heard was it was a lot of that have to do with timing. And so why what was the behind the timing was it that you decided or the company decided to hold off on some of the marketing plans so far, yeah just kind of what were the attributes that help the SG&A come in a little bit lower than expectations.

John as you step back from it a lot of it is about what was in the base last year. So RK was in the base last year and we're able to re-purpose. We're able to re-purpose some of those RK expenditures to marketing in this quarter. Additionally C COACH Europe, in the back half increased our expense level as we move through FY14 and it was not in our base in the first quarter.

Wouldn't you planning, wouldn't you all have taken that into account. So just wondering kind of why would it come in little bit below your expectations that. The SG&A...

So obviously we're right in track with our guidance for full year for SG&A in terms of SG&A growth as we look at the pushes and pulls in that, it is we are continuing to have an outlook of spending $25 million in marketing and we'll have some expenditures related to occupancy as we open up new international doors and some compensation related expenses as we look at performance based comp back on target which we took down in the second quarter of the last year.

Okay, great and then just one another quick one if I may. Can you give us a feel for the performance in the full assortment stores relative to your expectations versus the performance in the rest of the fleet in another words you are seeing, a divergence in terms of the performance as you would measure in this 40 full assortment stores?

Yeah, I think overall as we mentioned the total collection and total newness is really performing to our expectations and very much in our plan, where we have seen truly great signs as we talked about it is in that above 400. We've seen terrific signs in the full collection doors as well. There is no doubt that we have a new consumer engaging with COACH across the more elevated, more fashioned product and that is globally. We are also seeing better performance in the doors that received the full remodel. Not yet the full concept because as I mentioned in my remarks today actually this evening tomorrow in Japan our Shinjuku flagship is the first full store that is opening in the new concept followed by Rodeo and AOL, Time Warner. But we did significantly touch up our stores that Bleecker Streets, South Coast Plaza with some of you have seen in the past is not yet the full new concept but has an inspiration of it as well as lower fifth, all of those stores are performing much better than the rest of the fleet. And as I mentioned as well still very early days but the over 100 locations in wholesale where we moved to open sale we're seeing better performance as well as the locations again very early days release at the store managers in wholesale. So where we are making the fullest expression of transformation visible. We are seeing the greatest impact. We are pleased with the reaction to fashion and we are also very pleased with the two key core silhouettes that are out there which I really our first core introductions ED and Crosby with more to follow, Fran mentioned Scout which follows in December and then we also have a [town carton] which comes in late January early February which are two other key silhouettes chopper pricing that we believe will resonate with our core consumer.

Perfect. Thank you.

Thank you.

Thank you. Our final question today is from Joan Payson with Barclays.

Hi, good morning. Thank you for taking my question. So I focusing I guess on Japan, how do you think about that business for the rest of the year and when there might be a potential for rebound there? And then also I think you mentioned the logo mix for the full price stores being at 6% today. But what has that evolved to in the outlet business and is there a target in mind for the factory stores compared to full price?

Sure, let me first touch on Japan and then I'll let Fran to touch on outlet. Overall in the case of Japan results are very much consistent with our expectations and our annual guidance. Our planning was very much done both in the context of the environments that we've been seeing post the consumption tax is of course as well as our own brand transformation strategy with a lot of work being done in key flagships stores across Tokyo and other key cities and product there as well performing to expectations with certain really nice highlights especially across the more fashioned product where we have seen higher penetrations in Japan across Rider and a few of the fashion bags that we have in other markets. And now I'll turn to Fran on outlet.

Hi, in terms of the logo business in outlet much more significant than it is in our retail business. It's running right now at about 40% of total sales that's across all categories, handbag specifically it's about 26% of the business in bags. So it's still an important category for us in outlet.

Great, thank you.

And what's great there that I will just add we are doing a tremendous amounts of work in iterating across Signature platforms so you will see new Signature platforms penetrating across both our full price channels which we've launched and outlet moving forward as well as the wholesale channel. So we've recognized that while Signature and Logo in general is down trending globally for all players. We see it as a key part of our strategy moving forward and a key part for Stuart and the team to innovate and drive further relevant.

Thank you everyone. That concludes our Q&A. as you know we like to conclude prior to the markets openings. I will turn it back to Victor Luis for some closing remarks. Victor.

Thank you Andrea. I want to thank all of you for being with us today and we've outlined very clear and comprehensive strategies and plant this past summit to address all of COACH's brand challenges. We're in the very early execution of our journey and very confident in laying the foundation for our long-term vibrancy and growth. In this first quarter, I could not be proud of our team and the steps that we have taken across all of the consumer touch points. And at this moment I would also like to take the opportunity to recognize the retirement of our executive Chairman Lue Frankfort, who truly has been a legend in all that he has achieved in his career at COACH. I and the team wish him a tremendous inherited legacy and we wish him a tremendous amount of success as he moves forward in his next chapter. And of course I sit here incredibly proud of what we've accomplished in these early stages of our transformation book more importantly very confidence as we move forward as the team in our next chapter and I thank you all for being with us and look forward to seeing you during the course of holiday. Thank you.