Good day, once again, and welcome to this Coach conference call. Today's call is being recorded. And at this time, for opening remarks and introductions, I'd like to turn the call over to the Senior Director of Investor Relations at Coach, Ms. Christina Colone.

Good morning. Thank you for joining us. With me today to discuss our quarterly results are Victor Luis, Coach's Chief Executive Officer; and Andrea Shaw Resnick, Coach's Interim CFO. Andre Cohen, President, North America, is also joining us to discuss initiatives for the holiday season. Before we begin, we must point out that this conference call will involve certain forward-looking statements. This includes projections for our business in the current or future quarters of fiscal years within the meaning of the Private Securities Litigation Reform Act of 1995. Actual results could differ in a material manner. Additional information about risks and another important factors that could cause results to differ from those in the forward-looking statements can be found in our latest Annual Report on Form 10-K and our other filings with the Securities and Exchange Commission. Also, certain financial information will be presented on a non-GAAP basis. These non-GAAP measures exclude certain items related to our transformation plan, operational efficiency plan and Stuart Weitzman acquisition-related charges as well as the impact of foreign currency fluctuations, where noted. You may identify these non-GAAP measures by the terms, non-GAAP, constant currency, or excluding the negative impact of currency. You may find the corresponding GAAP measure as well as the related reconciliation on our website, www.coach.com/investors, and then viewing the earnings release posted today. Now, let me outline the speakers and topics for this conference call. Victor Luis will provide an overall summary of our first fiscal quarter 2017 results and will also discuss our progress on global initiatives. Andre Cohen will speak to our North America business, product performance and review our key programs for the holiday season. Andrea Resnick will follow with details on financial and operational results for the quarter along with our outlook for FY 2017. After that, we will hold a question-and-answer session which will end shortly before 9:30. Victor will then conclude with some brief summary remarks. I'd now like to introduce Victor Luis, Coach's CEO.

Good morning. Thank you, Christina, and welcome, everyone. As noted in our press release, we are very pleased with our performance in the quarter, highlighted by continued positive comparable store sales in North America and growth internationally, including double-digit increases in Mainland China and Europe as well as sales gains in our directly operated businesses across Asia, outside of Greater China and Japan. We remained focused on elevating the Coach brand through compelling product, differentiated store environments and emotional marketing. At the same time, we implemented the strategic actions necessary to reposition the brand and streamline our distribution in the promotional North American department store channel. Despite this deliberate pullback, we achieved growth across key financials, including sales, gross profit and operating income as well as double-digit earnings growth. Overall, our results give us confidence that the cumulative impact of our actions will drive top line and bottom line growth per our guidance for the fiscal year. As we've outlined previously, for fiscal 2017, our four strategic priorities for the Coach brand include: reenergize our brand in the category by continuing to innovate and establish our unique modern luxury proposition; continue the brand's elevation through a fuller expression of Coach 1941 in stores and online while driving our men's business even further across all channels; focus on raising brand awareness and relevance globally through the rollout of flagships and key fashion capitals, while continuing to renovate our existing store base; and differentiate Coach through a combination of fashion and heritage marketing campaigns, distorting investments to key regions and ensuring the message is relevant and increasingly aspirational to the broader market. This included the relaunch of Coach fragrance with our partner, Interparfums, in September. And for Stuart Weitzman, we will drive our leadership position in fashion boots during the key winter…

Thanks, Victor. As you read in our release, for the quarter, total North American Coach brand sales decreased 3% on both a reported and constant currency basis, reflecting our deliberate department store pullback, while direct sales were flat. Importantly, the September quarter marked a continuation of positive comps in North America. Our bricks and mortar comps rose approximately 4% in the quarter, driven by ticket and conversion, while traffic was down modestly. Overall, our aggregate comp was up approximately 2%, with e-commerce, notably lower eOS flash sales, impacting results. Generally, our coach.com retail site demand is similar to our retail stores. For most of the category, the dotcom channel is overwhelmingly a promotional one, with most of our competitors having perpetual sale shops available. As you're aware, we have a clear strategic direction to limit our promotional stance online, given the negative impact on long-term brand health. Finally, our business through international tourists in our stores rose during Q1, with declines in Chinese tourist traffic more than offset by other nationalities, notably Japanese and Korean visitors. Now, turning to our retail performance and the metrics we traditionally share on product, we continue to drive brand elevation with the above-$400 price brackets rising in penetration to over 50% of handbag sales, up from about 30% last year and generating another positive comp on a sales and unit basis. This drove handbag AURs to over $300. Turning to event marketing, as noted on the last call, we came out of FY 2016 comfortable with the cadence and type of events we'd hosted. We held a preferred customer event for September, anniversarying the prior year though slightly shorter in duration and which excluded 1941 products. And we'll hold a Black Friday event followed by our semiannual winter sale in December. Looking ahead, our…

Thanks, Andre. Moving on to Coach brand's international performance. As noted in our release, in the first quarter, international Coach brand sales rose 7% on a reported basis and 3% on a constant currency basis. By geography, Greater China sales were essentially even with prior year in dollars in the quarter. On a constant currency basis, sales rose 5%, driven by double-digit growth and positive comparable store sales on the Mainland, offset in part by continued weakness in Hong Kong and Macau. In Japan, sales rose 11% on a reported basis benefiting from the stronger dollar while constant currency sales decreased 7% impacted by a decline in Chinese tourist spend as we lapped last year's dramatic increase. In Europe, our sales grew at a double-digit pace in the quarter, driven by new distribution and positive double-digit comps, excluding Paris, where our business continues to be impacted by weak tourist traffic. Post the Brexit vote, we've actually seen very strong results in the UK, benefiting from the currency weakness and increased traction with the local consumer. In our other directly-operated Asian markets outside of China and Japan, mainly South Korea, Taiwan, Singapore and Malaysia, sales rose low-single-digit in dollars and in constant currency. Finally, I would point out that we're continuing to see disparate results in our international wholesale businesses, which while small, are important to growing brand awareness. For the quarter, our overall sales at POS increased modestly, driven by strong domestic performance, offset in part by relatively weaker tourist location results. On a net sales basis, revenue also increased over the prior year. Now, I will turn it over to Andrea for details on our financial results and guidance for the year ahead. Andrea?

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 first fiscal quarter results as well as our outlook for fiscal year 2017. Please note the comments I'm about to make are based on non-GAAP results. Corresponding GAAP results as well as the related reconciliation can be found in the earnings release posted on our website today. We're pleased with our financial performance in the first quarter, which marks continued progress against our transformation plan and momentum in our business. Our sales increased over the prior year, driven by positive comps in North America and continued growth internationally and despite the strategically positioning of the Coach brand in the promotional North American wholesale channel. Operating margin expanded significantly over prior year once again this quarter, fueled by higher gross margin while we continue to invest in our brands. Taken together, we generated double-digit growth in net income and earnings per share. And our balance sheet remains extremely healthy with a clean inventory position and sufficient cash to support our strategic initiatives, while returning capital to shareholders through our dividend. Now, turning to the details. Coach, Inc.'s net sales totaled $1.04 billion for the first fiscal quarter, an increase of 1% on a reported basis and a decrease of 1% on a constant currency basis, including approximately 150 bps of pressure related to the company's strategic decision to elevate the Coach brand positioning in the North American wholesale channel. Coach brand sales increased 1%, including positive North America comp store sales and continued international growth, as Victor and Andre have discussed. Stuart Weitzman brand sales were essentially even with prior year in Q1, impacted by wholesale shipment timing. To this end and as…

All right. And our first question comes from Mr. Bob Drbul from Guggenheim. Sir, you line is now open.

Hi. Good morning.

Morning, Bob.

I don't think you talked about comp by store channel in North America. I was wondering if you could provide some additional color there and specifically on the Internet business in North America?

Sure. As you know, Bob, we saw our comp of nearly 4% this quarter across channels in bricks and mortar, which is not the strongest comp that we've seen in over three years and I couldn't be happier with our performance across both channels, and as Andrea mentioned with the expansion in gross margin that we saw in our direct business. In retail, the impact is from broader distribution of Coach 1941 that we've been working on over the last couple of quarters especially of course the continued rollout of our store concept as well as the great work being done by our sales associates with the enhanced service experience. In outlets, as we look to engage with the broader consumer, really proud of the level of innovation and the team as the team has been leveraging a lot of inspiration both from our retail stores and as we mentioned even a few very specific outlet specific innovation such as Pac-Man, which has gotten us off to a very good start earlier this quarter and couldn't be more excited by the level of innovation that we have actually, especially in the back half of this year. In terms of your question online, Bob, as you know most of the category uses dotcom as a promotional channel with perpetual sale on their sites. We have a very clear strategy to limit our promotional stance online. We have no 24/7 sale on coach.com. Generally, I can share with you that coach.com retail site demand was similar to our retail stores.

Great. Thank you very much.

Thank you.

And our next question comes from Ike Boruchow from Wells Fargo. Your line is now open.

Hi. Good morning, everyone, and congrats on a very solid quarter.

Thank you, Ike.

So pretty impressive Coach brand gross margin performance in the quarter, so congrats there again. Just hoping to dig through that a little more. Maybe, Andrea, specifically could you talk about the North American margin in the quarter, maybe how much of a benefit was there to gross margin from the wholesale repositioning? And then does your outlook for the remainder of the year incorporate any kind of improvement in the outlet margin performance that you've been seeing in the past quarter or so?

Sure. So when you look at gross margin in the quarter, for overall, the Coach brand, there were a couple of areas of benefit and a couple of areas of hit. So starting off on channel mix, channel mix was a positive in the quarter to us. Product mix and cost were actually a very large positive, which we in turn returned to consumers in terms of pricing and value. Not a complete offset but a partial offset there. And then in terms of the currency impact, currency was a negative impact in the quarter we talked to about 40 basis points. Interestingly, there was an impact of the yen and that's really about OCI and the yen hedge loss position in the quarter as well as a negative impact in other Asian currencies and on the R&D in terms of the China currency impact. For North America specifically, North America gross margin improved in the quarter for the same reasons that I discussed. I'm sure one of the things you're interested in specifically, our outlet, North America store gross margin was actually up in the quarter, so glad that we were able to take the benefit of lower costs and, as I said, returned some but not all of that to the consumer. We did have a small hit in North America from currency and our guidance for the year does bake in these continued benefits from both AUC, or average unit cost, as well as an overall impact of returning that to the North America retail and outlet consumer in terms of pricing. So a nice balance there, as we move through the year.

Thanks so much. Appreciate all the color. Congrats.

Sure.

And our third question on queue comes from David Schick from Consumer Edge Research. Sir, your line is now open.

Good morning. Thank you for taking the question. You talked about macro volatility. Obviously, we hear that a lot. We see it a lot. But could you talk about how the macro volatility you mentioned in your release plays out in the different businesses that you see? How should we think about if macro volatility were to increase going forward, how to expect that to impact the businesses? And then secondarily, the pre-follow-up would be that the category, essentially, categories in which you play have evolved, and so how do you see the different interplay of the categories to define a sort of aggregate category growth? That would be of interest as well, as you've done more in different sort of subcomponents of the categories. Thank you.

Okay. Thank you. In terms of your question on macro, David, obviously, it's very, very hard to predict. As we know, the geopolitical impacts most recently, whether it be terrorist attacks and where those happened and the impacts that can have, are almost impossible to predict. They do lead, most lead to of course shifts in tourist flows, especially as well as in some markets, even short-term to medium-term impacts on domestic demand. The biggest impacts that we have seen outside of those short-term geopolitical have been mostly currency swings. There has been a lot of talk, of course, about the Chinese tourists, where they're increasing and where they're decreasing. We've seen, with the appreciation of the Japanese yen, decreases in tourist spending in Japan. We've seen pickups in Korea, and, of course, we have seen a pretty strong drop-off in Mainland Europe, but especially in Paris, which is a very important destination. In terms of the categories, we have just, obviously, with the acquisition of Stuart Weitzman, made a bigger bet on footwear. We're excited about the long-term opportunity in that category for us, a $28 billion opportunity. But generally, into the medium-term and long-term, we continue to believe there is no better space to be in fashion than the handbag and accessories space. We're excited about that as an opportunity, of course, not only in developed markets here in our home market, the U.S., Europe, which is really a greenfield opportunity for us. I could not be more excited about the team that we have on the ground there and the great work they're seeing. We're beginning to see decent traction now, especially with the UK domestic consumer and as well in developing markets, of course, where there's still so much of untapped opportunity with growing middle classes globally. So, that's, I hope, answer to your question.

Very helpful. Thank you.

And our next question on queue comes from Erinn Murphy from Piper Jaffray. Your line is now open. Erinn E. Murphy - Piper Jaffray & Co.: Great. Thank you. Good morning. I think you guys said in your prepared remarks that the $400 price point with that 50% penetration. Just to clarify, is that full price only, or is that overall Coach, Inc., and then – or Coach brand? And then as you head into the second quarter where gifting is the key focus, how should we think about the penetration rate between that over-$400, the under-$300 price points? And then last, how many stores in North America have the 1941 1941 (53:39)? Thanks.

Thank you, Erinn. We'll let Andre answer that.

Morning. So starting with the $400 price bracket, that has grown, as you know, as we mentioned, significantly this quarter. Going into the holiday quarter, we see a continuation of the growth of that $400 price point bracket, but we've also significantly expanded our assortment below $400 with a gifting focus. And we're particularly excited about that. The heritage gifting collection it's called, that's hitting the stores in the days ahead. And we'll give some good balance to the assortment to take advantage of the gifting opportunity. In terms of the distribution of 1941, it's now in our full retail distribution. It's been in full distribution since August, and it's been performing I have to say very well at every level of every tier of store, not only our sort of more top-tier stores.

Yes, so, Erinn, to your first question, it is just in the retail channel, not across both channels, of course. And as Andre mentioned, really excited year-on-year about the heritage gifting, which should probably lead to a decrease in that $500 slightly during the quarter. Erinn E. Murphy - Piper Jaffray & Co.: Got it. Thank you, guys, and best of luck.

Thank you.

And our next question on queue comes from Oliver Chen from Cowen & Company. Your line is now open. Oliver Chen - Cowen & Co. LLC: Thanks a lot. Victor, you've made a lot of progress with the evolution towards the house of fashion design and also the Stuart Weitzman acquisition. As you think about the long-term in terms of what you're creating, what do you think about an American multi-brand house and how you'll think about allocating capital and synergy opportunities as you may or may not create a multi-brand kind of company? And then just curious. There was a lot of great commentary on bringing service back to stores. What are your high level thoughts about what the industry is facing with traffic and how you can continue to motivate the Generation Z and the new generations to come just to come into physical stores at large?

Thanks, Oliver. In terms of the progress that we've made, of course, not only with the Coach brand, but now, of course, as a dual-brand company, I couldn't be more excited about our ability to leverage the knowhow that we have in Coach to support, of course, Stuart Weitzman. Incredibly excited about the new talent that we've recruited to that brand, both the CEO, Wendy Kahn; the Creative Director, Giovanni Morelli, who joins us in the spring; and as we announced today, Daniele Michetti, who joins us as the lead shoe designer reporting into Giovanni. More broadly, in terms of our capital allocation strategy and what could come next, we've been very consistent. We have a tremendous amount of work and opportunity within the Coach brand and the Stuart Weitzman brand. That is our first priority. Our second priority, as you've suggested, is to look at value-additive acquisitions. Of course, we're going to be very selective in acquisitions that allow us to build platforms for long-term growth, that allow us to leverage our global infrastructure and on organizational capabilities and our skill sets, which is obviously building brands and retail management and a terrific supply chain in our core space. Most importantly, we look for great brands. We're not as committed to any specific nationality, so I would keep that in mind. Oliver Chen - Cowen & Co. LLC: Thank you.

He has a second question, I'm sorry, I've just been reminded, in terms of the physical stores and service. I couldn't be, as I mentioned in my response to Bob's question, happier with what the teams are doing across both retail channels. As you've seen, we've driven a positive 4% comp nearly in our bricks and mortar stores. I believe that it's not one specific channel or one specific action, Oliver, that leads to the positive results. It's about a total brand experience. We're committed to being very active digitally and engaging with the millennial and indeed with the broader consumer that's increasingly engaging online. And we want to provide her with a great experience whether she decides to shop in our stores or online. What we're being very careful about is managing those promotional impressions, especially in the online channel, which we know is global, transparent and can create a tremendous amount of confusion. And, therefore, a lot of the steps that we've taken both in the online channel and as well, I would say, as we have shared repeatedly in the wholesale channel where we're looking to manage our brand more effectively for long-term growth. Oliver Chen - Cowen & Co. LLC: Thanks a lot for those comments. Appreciate it.

Operator, we will take additional questions beyond 9:30 given the technical issues that we had at the beginning of the call.

And our next question on queue comes from Anna Andreeva from Oppenheimer. Your line is now open. Anna Andreeva - Oppenheimer & Co., Inc. (Broker): Great. Thanks. Good morning and congratulations on navigating the environment really well.

Thanks, Anna.

Thank you. Anna Andreeva - Oppenheimer & Co., Inc. (Broker): I guess one clarification and one question. First on the flash sales headwind that you experienced during the quarter, has that now been lapped or should we continue seeing some of that going forward? And then secondly on Stuart Weitzman, were operating margins up during the quarter excluding the marketing shift and how do we think about the profitability of this brand for the year? Thanks.

Okay. I'll let Andrea discuss the Stuart Weitzman in a bit. In terms of the eOS, no further comments other than what I've said earlier. And I think the main driver there as we've mentioned is that we're not in a very active recruiting mode. It's a closed database to those that shop in our bricks and mortar stores and that have been in our database. And so therefore we will continue to probably see some shrinkage in eOS go forward.

In terms of the Stuart Weitzman operating margin, Anna, as you know, gross margin was up during the period on a year-over-year basis and so was the SG&A expense line which actually rose significantly during the period. We've called out part due to marketing expenses but there were also additional items. For example, as you may remember, we bought in the Canadian distributor there. So we had those directly-operated expenses of the Canadian stores that we did not have in the year ago period. We also had higher retail occupancy costs. Just like Coach, but of course it's more magnified for Stuart Weitzman. We have the occupancy of both the Fifth Avenue and Regent Street stores hitting the P&L there in terms of occupancy expense where we have no sales yet. So we had those as well. There were a couple of other items that impacted it but it was not only marketing timing just to keep that in mind. Anna Andreeva - Oppenheimer & Co., Inc. (Broker): Best of luck, guys.

For the year, I would say that our operating margin for Stuart Weitzman should be in the realm of where it ended last year. And that is what we had expected when we entered this year. Anna Andreeva - Oppenheimer & Co., Inc. (Broker): Terrific. Best of luck, guys.

Thank you.

Go ahead, operator.

Thank you. And our next question on queue comes from Randy Konik from Jefferies & Company. Sir, your line is now open.

Yes. Thanks a lot. So I want to just talk to the cyclicality of the margin structure, gross margin, that is, across the channels, because it was very positive to hear what the – it sounded like the gross margin was up in the outlet channel and the strategy has been more about – I think less about just driving units for units or revenues for revenues but driving a healthier, better margin business and being smarter with the promotional cadences and so forth. So can we just get some perspective on where the – just at a high level, where we are in the cyclicality peak trough between the channels? Because it seems to me there'd be a lot more gross margin opportunities still left in the outlet channel. Just wanted to explore that a little further. Thanks.

Yes. Randy, I think, it's a good question. As you may remember, last year, I believe it was in our January call regarding our second – December quarter. We talked about outlet promotional activity ratcheting up. We saw that in the competitive environment hours ratcheted up as well. So we don't lap that until let's say partway through this second quarter. So we would continue to see that. Now we are experiencing lower average unit cost, higher initial markup, which is allowing us to fund, if you will, and pass that on to the consumer. But we start to lap that, to your point, through the second quarter. I am fresh out of crystal balls right now, and I'm not sure that we're going to see a significant lessening in the environment in the second half of the year. But, presumably over time, we'll be able to actually keep some of those lower average unit costs on the outlet side. One thing I will mention is we are having and will have for the full year a small benefit associated with the reduction of sales in our wholesale channel. So that will help. And, obviously, we're experiencing lower average unit costs on the retail side as well. And we're seeing nice growth in those AURs and ADTs, as Andre talked about. So I think that probably sort of explains what's going on, on the outlet side and what we're looking at for the balance of the year. As you know that we've reiterated our guidance for the year of 69% to 70%.

Very helpful. Thank you.

My pleasure.

And our next question on queue comes from Michael Binetti from UBS. Sir, your line is now open.

Hey, guys. Good morning. Congrats on a nice quarter. Just really quickly, I wanted to touch on the comment that tourism was I guess better or less bad. Could you clarify for me, was that related to the U.S.? I know you made some global comments. But is your sense that tourism's getting better in the U.S. and how meaningful of a change there or so? And then can you help us think about whether the tourism, the outlets – I'm sorry the tourist outlets are getting better? Or maybe if there's any kind of signs of improvement or trend change in the outlets that are largely shopped by domestic customers?

Okay. I'll let Andre chime in on that.

So without going into the details by channel, we did see a slight growth in tourism in the first quarter, a slight decrease in Mainland Chinese tourists to North America, but actually more than offset by other Asian nationalities, particularly Koreans and Japanese.

Great. And then I think you mentioned that the category for premium accessories for men and women was flat, slightly positive. I think in the past you've spoken just on women's. Is there any way you could help us clarify between the two and if you saw a change in women's that would be worth calling out as well?

No. No major shift across channels. I mean it's what we've talked about which is basically the fact that the department store impact has been, obviously, a slight drag. And what we have seen, of course, is that all of the major luxury channels, of course, report with men's and women's together. And we've seen a little bit of an uptick with a few specific luxury players that are impacting both, and therefore, consolidate across all brands.

Okay. Thanks a lot, guys. Congrats again.

Thank you.

And our last question on queue comes from Mr. Brian Tunick from the Royal Bank of Canada. Sir, your line is now open.

Hi. Thanks. Good morning. Congrats as well. I guess you guys usually share with us what innings you think maybe we're in. So I was wondering if Victor or Andre could talk really about the factory channel and maybe talk about what inning you guys think we're in from a store remodel perspective, a product development perspective, including the men's growth. And then if you still believe the retail being the halo for factory will take a few more quarters to really set in from a brand perception perspective. Thanks very much.

Well I'm rooting for Cleveland tonight. There is one or two Chicago fans here in the rooms, but of course, Game 6 we're looking for an end this evening. A big Tito fan, given my affiliation with the Red Sox. I will just add that in before I answer your question.

Oh, my God.

Thanks.

So, to your baseball metaphor I think, obviously, look, if we're looking at the outlet channel, we're still in the very early stages in terms of the rollout of the autumn luxury concept itself. Andre and the team leveraging a lot of the consumer insights work at tweaking that concept for it to be more effective. The major impact that we're seeing in that channel is really from the great level of innovation that Stuart and the team are putting into product, and the overall halo impact of the brand as we continue to speak to the broader consumer more directly. And I think you'll see that pick up in the quarters ahead, specifically for holiday, and even more so as we look at the third and fourth quarters. I would say that from a store perspective, we're maybe in the second innings specifically to your question, from a product perspective maybe we're in the middle innings and of course we don't market to that consumer outside of what happens either in the mall itself or in direct email communication with her so I would say that there we are pretty advanced.

I think we've gone into extra innings here. So, Christina, you want to sum it up?

Sure. That concludes our Q&A. I will turn it over to Victor Luis for some closing remarks.

Thank you. Let me just apologize again to all of you for taking a little bit of your time and apologize on behalf of our service provider. Just want to thank you all for joining us this morning, want to again thank and congratulate both the Coach and the Stuart Weitzman teams for their hard work and to the performance that they are driving on behalf of our shareholders in this rather volatile environment. Very excited about the quarters ahead. We have terrific bolt product marketing and wonderful retail experience as planned ahead as we open this quarter in a few weeks both Coach House here in New York as well as in London to cap our 75th anniversary. So, thank you, all, and look forward to chatting live with many of you.

This does conclude the Coach earnings conference, and we thank you for your participation.