Good day and welcome to this 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 the Global Head of Investor Relations and Corporate Communications at Coach, Andrea Shaw Resnick. Andrea Shaw Resnick - Global Head, Investor Relations & Corporate Communications: Good morning and thank you for joining us. With me today to discuss our quarterly results are Victor Luis, Coach's Chief Executive Officer; and Jane Nielsen, Coach's CFO. Andre Cohen, President, North America, 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 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 a number of important factors, including risks and uncertainties such as expected economic trends or our ability to anticipate consumer preferences, control costs, successfully execute our transformation initiatives and growth strategies, or our ability to achieve intended benefits, cost savings and synergies from the Stuart Weitzman acquisition. 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. Please note that historical trends may not be indicative of future performance. Also, certain financial information and metrics that will be discussed today will be presented on a non-GAAP basis, which you may identify by the terms non-GAAP, constant currency, excluding the negative impact of foreign currency, or excluding charges associated with the financing short-term purchase accounting adjustments, contingent payments and integration costs. You may find the corresponding GAAP financial information or metric as well as the related reconciliation on…

Thanks, Victor. As you read in our release for the quarter, our total Coach brand sales in North America were down 7% as reported and 6% in constant currency. Our Direct business, excluding wholesale, was also down 7% as reported and 6% in constant currency. In aggregate and as targeted, we drove a significant inflection in our business this holiday, led by retail. Comp trends also improved in our outlet stores, with record Black Friday weekend sales. Overall, our total store comp was down 3% year-over-year, with high ticket offset by lower conversion and a decline in traffic, which was hurt in part by the overall weak mall trends. Our total comp was pressured an additional point by eOS, as we pulled back from 10 events in last year's second quarter to seven in total. Now looking at results sequentially, as planned, an improvement in conversion drove the inflection in comp as our initiatives across product, stores, and marketing built momentum. Our in-store traffic trends also improved on a sequential basis, despite a significant worsening in overall mall traffic. Against this backdrop of deteriorating traffic, specifically in the outlet channel, competitive pressures intensified and we responded with a higher level of promotion than expected. Importantly, we remain confident in our ability to deliver a positive North American comp by the fourth quarter, again led by the improvement in our retail stores, with the most significant driver being conversion. Now, turning to our retail performance and the metrics we traditionally share on products, the above-$400 price bracket rose in penetration, saw another positive comp on a sales and unit basis, and represented about 35% of handbag sales, up from about 30% last year. The increases showed continued progress of our elevation strategy, with higher price points and more fashion-forward products such…

Thanks, Victor. Victor and Andre have just taken you through the highlights and strategies. Let me now take you through some of the important financial details of our second fiscal quarter results for the consolidated businesses of Coach, Inc. as well as the Coach brand and Stuart Weitzman, ending with our outlook for FY 2016. Please note, the comments I'm about to make are based on non-GAAP results. Corresponding GAAP results, as well as the related reconciliations, can be found in the earnings release posted on our website today. Starting with Coach, Inc. on a consolidated basis, net sales totaled $1.27 billion for the second fiscal quarter compared with $1.22 billion reported in the same period of the prior year, an increase of 4%. On a constant currency basis, total sales increased 7% for the period. Gross profit totaled $859 million versus $841 million a year ago, while gross margin was 67.4% versus 69%. SG&A expenses of $574 million compared to $542 million in the prior year, an increase of 6%. As a percentage of net sales, SG&A totaled 45.1% on a non-GAAP basis compared to 44.4% in the year-ago quarter. Operating income for the quarter totaled $285 million compared to $299 million in the prior year, while operating margin was 22.4% versus 24.5%. Net interest expense was $6 million in the quarter as compared to net interest income of approximately $400,000 in the year-ago period. Net income for the quarter totaled $188 million, with earnings per diluted share of $0.68. This included a contribution of $13 million or $0.05 per share from Stuart Weitzman. This compared to net income in the second quarter of FY 2015 of $200 million, with earnings per diluted share of $0.72. Turning now to performance by brand and starting with the Coach brand; as…

Thank you. We will now begin the question-and-answer session. Our first question is from Bob Drbul of Nomura. Your line is now open.

Hi. Good morning.

Good morning, Bob. Victor Luis - Chief Executive Officer & Director: Good morning, Bob.

I guess I've got two questions. The first one is can you elaborate a little bit more in terms of what's going on in the category today and how important that is for your continued progress and return to positive comps? And the second question that I have is can you just talk a little bit about how your current business trends are? Victor Luis - Chief Executive Officer & Director: Sure. In terms of the category, Bob, there's no doubt in our mind that the secular shift from apparel to accessories definitely continues, and that there isn't a better space to be in, in the fashion space than handbags and accessories. In the short-term, however, there is some volatility driven by macro issues and, of course, the extreme exchange rate volatility that we have seen, which is impacting tourists. At the same time, we strongly believe that the consumers are looking for innovation. They're looking for quality, value and, most of all, they're looking for authenticity. And we don't believe there is a brand better positioned to take advantage of that than us. Given our authenticity of heritage and craftsmanship that's very much our DNA, when blended with Stuart's creative vision and the terrific reviews that we continue to get towards our product, our stores and our marketing, we're incredibly excited by the results that we're driving, by the differentiated positioning that we're driving and are very much seeing those results continue to your second question, as we enter the third quarter. We're very much seeing similar trends with guidance contemplating a return to North America comps going positive in the fourth quarter, per Jane's comments.

Great. Thank you very much. Victor Luis - Chief Executive Officer & Director: Thank you.

Thank you. Our next question is from Ike Boruchow of Wells Fargo. Your line is now open.

Hi. Good morning, everyone.

Morning, Ike, Victor Luis - Chief Executive Officer & Director: Morning. Andrea Shaw Resnick - Global Head, Investor Relations & Corporate Communications: Hi, Ike.

Victor, so your North American comps have been getting better for almost two years now. I guess my question is do you have a way of looking at the customer and who they are? Meaning, is this a function of the former Coach customer who maybe left the brand, is starting to come back or is this new customers starting to come in? And then, do you feel that it's the product, the store experience, the marketing, what do you think is the biggest driver in your opinion today? Thanks. Victor Luis - Chief Executive Officer & Director: Thanks, Ike. It's really both. We're seeing new customers come into the franchise. And what's most exciting, of course, is that we're seeing that happen not only through handbags and accessories, but also through the small businesses that we're now driving in apparel through Stuart's collections. And we're also seeing some lapsed consumers come back. And that is very exciting given the 75th anniversary plans that we have ahead of us and our continued reinforcement of what's true to Coach, which is really a focus on glovetanned leather and all of the activities that Andre discussed as it relates to the customer service experience that we're driving in our stores with the craftsmanship bars as well as the marketing activities. In terms of the areas of biggest impact, Ike, I would say it's a combination of all. It's very difficult to really peel this apart. We're driving total brand impression. We, of course, see the most significant inflection in those stores that have been transformed, as you heard in our prepared notes. The North American full-price stores in aggregate still very much comping positively, including those very first stores now that we have lapped that we opened post-Black Friday of 2014. So really excited by the continued performance in those locations and excited by what we're seeing not only here in North America, but also globally where the pre-post on those locations is very much outpacing the rest of the fleet.

Great. Thanks. Good luck. Victor Luis - Chief Executive Officer & Director: Thank you.

Thank you. The next question is from Oliver Chen of Cowen & Company. Your line is open. Oliver Chen - Cowen & Co. LLC: Thanks. Congrats. And also on the 1941 collection, which looks great. Andrea Shaw Resnick - Global Head, Investor Relations & Corporate Communications: Thanks, Oliver. Oliver Chen - Cowen & Co. LLC: Regarding your comments, Andre, on the outlet channel, the outlet channel has been a little bit tough sector-wise, but do you continue to see kind of a continuation of the need for higher levels of promotion? And what's the nature of that? Is it couponing or just sharper price points? And just a quick one, Victor, from a bigger-picture perspective, were there any aspects that you would have done differently, just as you post-game the quarter? Thanks.

So in general terms, as we'd anticipated, retail led, as I mentioned in my prepared remarks. The positive thing is we also saw a sequential improvement in the Outlet business. And that was led by conversion. We maintain a higher average ticket in outlet. That was driven by UPT primarily. I think in terms of how we dealt with the higher level of competitive promotional activity, we tried to be as nimble as possible. We played with couponing. We shifted within variable pricing in stores, handouts, multiples, et cetera. So we tried to be as nimble as we could. We were a little less blunt than we were in the past with sort of a one-off 50%-off coupon. We varied a lot our toolkit I'd say in promotions.

Yeah, Oliver, it's important – as we've come out of Q2, as we've revised our Coach brand gross margin guidance slightly, we've incorporated the activity in the heightened competitive activity into our guidance for the Coach brand gross margin for the full year. Victor Luis - Chief Executive Officer & Director: Yeah, I would just add, Oliver, and connected to your question, in terms of key learnings, first, the most significant learnings, obviously, were those related to Stuart's collection, launching the first season over a year ago in terms of just having enrichened our gifting offer and having a richer presentation of price points across various buckets, right, in outlets from the $150 of course and into full price above the $400 bucket, and you saw the balance of that and heard about that in Andre's remarks. Overall, though, it continues to be the same strategy and focus, which is to continue to give the consumers more value, not only through pricing, of course, and it's important to recognize that outlet is a promotional channel and consumers do go to that channel specifically for deals, but also through what we're doing with experience. Those of you who have had the opportunity to visit our Modern Luxury outlet stores I think see and feel that, and that continues to be a major program for us as we also continue to put make into the product and give consumers value across all of our channels. Oliver Chen - Cowen & Co. LLC: Thank you. Great job on the balance of fashion versus gifting and best regards. Victor Luis - Chief Executive Officer & Director: Thank you, Oliver.

Thanks, Oliver.

Thank you. The next question is from Erinn Murphy of Piper Jaffray. You may now ask your question. Erinn E. Murphy - Piper Jaffray & Co (Broker): Great. Thanks. Good morning. Victor, I was hoping for you to talk a little bit more about your digital strategy. As you fuel that, can you just talk about the signposts that you're monitoring that do suggest that you're getting that millennial customer shopping the Coach brand today? Victor Luis - Chief Executive Officer & Director: Sure. I think that when it comes to digital, we're really focused on a couple of key strategies. Obviously, there's e-commerce, and not only what we're doing here in North America. One of the major steps that we've taken over the last, I would say almost two years now since the beginning of our transformation strategies, of course, was to pull back on our eOS strategies. You've seen us put a lot of emphasis on bringing innovation to coach.com as a full-price vehicle as well as to everything that we're doing, of course, digitally through social media gaining very, very quick relevance for the brand, especially through Instagram, which has been a major focus for Coach. Internationally, you've heard during our prepared remarks today that we have just opened a new e-commerce site in Europe, having started with the UK. Our plans will be to roll that out across Europe over the next 12 months, while we also continue to gain traction in Asia. I'm happy to report that our teams in Asia have in many ways been leading the way in those markets for the entire category. In Japan, we've made great progress getting onto Line, and in China, not only Sina Weibo, where we're one of the leading – I believe still the leading fashion brand in terms of number of followers, but also on WeChat, where we've also been leading the way. So I would say globally, we are where the millennials are today engaging with brands. It's not just about the channel. However, we know that it's about the content. And there, we're incredibly pleased with the work that Stuart's doing, with the reviews that we're getting from the editorial community and from the bloggers that, of course, influence the millennial consumer. So it's a process. We're very much on our way, and it's very exciting to see the progress that we are making. Erinn E. Murphy - Piper Jaffray & Co (Broker): Thanks for the color, and best of luck. Victor Luis - Chief Executive Officer & Director: Thank you.

Thank you. The next question is from David Schick of Stifel. Your line is open. David Schick - Stifel, Nicolaus & Co., Inc.: Hi. Good morning.

Morning, David. David Schick - Stifel, Nicolaus & Co., Inc.: And congratulations on the success in Weitzman. So you talked about having the flexibility to act with more acquisitions. Could you talk about how Weitzman will work within the overall Coach out a couple years, and then how you would think about other acquisitions? What are the ways you would think through that? Victor Luis - Chief Executive Officer & Director: Well, David, at the moment, we're obviously very, very focused still on integrating Stuart Weitzman. I couldn't be more pleased with what we're seeing with that brand, the team, and the traction that they're gaining. It really speaks to the strategy that we have and what we internally have called modern luxury, which is getting a collection of brands together that have quality, that have authenticity, and, at the same time, share in fashion relevance and can engage in a modern way with consumers. In the case of Stuart Weitzman, what we're seeing is really an affirmation of all the due diligence that we've done. It's a terrific brand with amazing fit, amazing quality, superb supply chain, truly a leader in the space in the U.S. And in a season where boots were not selling given the unseasonably warm weather, they were the top performer across all channels, whether it be here in top-tier department stores in the U.S., Europe, and in China where they're gaining increasing relevance which is very exciting for us. And it's not only the products. They're doing an amazing job engaging with consumers. We talked about what Coach is doing, of course, online, but what the Stuart Weitzman team has been doing with their marketing is a great example for us at Coach and indeed for the entire industry as they engage with more youthful consumers online. In terms of longer term, it's very much consistent with what we have shared. We will, of course, be leveraging the Coach team to support Stuart Weitzman in the development of their handbag and accessories business. We discussed already the talent that is already working on that project. And by the end of this calendar year, beginning of next, we should begin to see some of that product hit the Stuart Weitzman stores. In addition, the Stuart Weitzman team will be supporting Coach with the footwear supply chain opportunities that exist when it comes to fit and certainly comfort and potentially longer-term, in a more meaningful way as well. And we're supporting the Stuart Weitzman brand already in some significant ways with real estate, and we've talked about Regent Street, where we will be opening the first Stuart Weitzman flagship in the UK next to the Coach flagship there later this year. David Schick - Stifel, Nicolaus & Co., Inc.: Thank you. Victor Luis - Chief Executive Officer & Director: Thank you. Andrea Shaw Resnick - Global Head, Investor Relations & Corporate Communications: We can take one more question.

The next question is from Anna Andreeva of Oppenheimer. Your line is now open. Anna Andreeva - Oppenheimer & Co., Inc. (Broker): Great. Thanks so much. Good morning and congrats to the team. Victor Luis - Chief Executive Officer & Director: Thank you, Anna. Anna Andreeva - Oppenheimer & Co., Inc. (Broker): I guess a follow-up on the category in North America, could you share how much of the deceleration is the AUR pressure? I think you said the units are still up nicely. And do you need the category to bounce back at all for Coach to achieve those positive comps by the fourth quarter? Thanks so much.

Yes. In terms of what we've seen in the market, there's been a deceleration of AURs and units going up. In the case of Coach in retail, we actually drove positive ADT. (60:26) So that's an important factor in Q2. So and as I mentioned earlier, we've seen that sequential improvement in our overall business, particularly led by retail, with conversion improving sequentially and our traffic also improving sequentially quarter-over-quarter. Victor Luis - Chief Executive Officer & Director: Yeah. In terms of the second part of your question, the short answer is no. We're really excited about the traction that we're seeing in our brand sequentially. Since the start of our transformation, we've seen our comps in North America improve by 20 points, irrespective of what's happened in the category. And so as we look to the future, this is really about driving relevance for the Coach brand. It's not to say that we're immune to what's happening around us, but we're very, very focused on executing our plan. And we're very pleased with the results that we're seeing and very much looking forward, as guided, to achieving positive comps in North America in the fourth quarter. Anna Andreeva - Oppenheimer & Co., Inc. (Broker): That's great. Best of luck. Victor Luis - Chief Executive Officer & Director: Thank you.

Thank you. Andrea Shaw Resnick - Global Head, Investor Relations & Corporate Communications: Thank you. That concludes our Q&A. I will now turn it over to Victor Luis for some concluding remarks. Victor? Victor Luis - Chief Executive Officer & Director: Thank you, Andrea. I just want to close by, first and foremost, thanking all of you for joining us again and looking forward to seeing, of course, and hearing from you again during the rest of the quarter as we visit with some of you individually. I also want to thank and congratulate both the Coach and the Stuart Weitzman teams for their hard work and the commitment to driving our second quarter results and truly the fantastic development that we're seeing in our brands against what is a volatile global backdrop. Our brands are special. They represent decades of blending a unique know-how in the crafts that we have with modern-inspired design of our teams. And it's fitting for us that in the 75th anniversary of Coach as we celebrate that this year that we will again drive growth by fusing very much the history that we share and the authenticity of our craft with the vision of our creative teams. And thank you all for being with us. Andrea Shaw Resnick - Global Head, Investor Relations & Corporate Communications: Thank you.

Thank you. This does conclude the Coach earnings conference. We thank you for your participation.