Coach Reports Third Quarter Earnings Of $0.77, Up 24% On A 17% Sales Increase

“Our excellent results this quarter and the trends we’re continuing to experience reflect the vibrancy of the Coach proposition. Given the strength of our business, we remain confident in our ability to continue to drive sales and earnings at a double-digit pace over our planning horizon,” Mr. Frankfort concluded.

Coach will host a conference call to review third fiscal quarter results at 8:30 a.m. (EDT) today, April 24, 2012. Interested parties may listen to the webcast by accessing www.coach.com/investors on the Internet or dialing into 1-888-405-2080 or 1-210-795-9977 and asking for the Coach earnings call led by Andrea Shaw Resnick, SVP of Investor Relations & Corporate Communications. A telephone replay will be available starting at 12:00 noon today, for a period of five business days. The number to call is 1-866-352-7723 or 1-203-369-0080. A webcast replay of this call will be available for five business days on the Coach website.

Coach, with headquarters in New York, is a leading American marketer of fine accessories and gifts for women and men, including handbags, men’s bags, women’s and men’s small leathergoods, weekend and travel accessories, footwear, watches, outerwear, scarves, sunwear, fragrance, jewelry and related accessories. Coach is sold worldwide through Coach stores, select department stores and specialty stores, and through Coach’s website at www.coach.com. Coach’s common stock is traded on the New York Stock Exchange under the symbol COH and Coach’s Hong Kong Depositary Receipts are traded on The Stock Exchange of Hong Kong Limited under the symbol 6388.

Neither the Hong Kong Depositary Receipts nor the Hong Kong Depositary Shares evidenced thereby have been or will be registered under the U.S. Securities Act of 1933, as amended (the "Securities Act"), and may not be offered or sold in the United States or to, or for the account of, a U.S. Person (within the meaning of Regulation S under the Securities Act), absent registration or an applicable exemption from the registration requirements. Hedging transactions involving these securities may not be conducted unless in compliance with the Securities Act.

This press release contains forward-looking statements based on management's current expectations. These statements can be identified by the use of forward-looking terminology such as "may," "will," "should," "expect," “confidence,” “trends,” "intend," "estimate," "on track," "are positioned to," “on course,” “opportunity,” "continue," "project," "guidance," “target,” "forecast," "anticipated," or comparable terms. Future results may differ materially from management's current expectations, based upon risks and uncertainties such as expected economic trends, the ability to anticipate consumer preferences, the ability to control costs, etc. Please refer to Coach’s latest Annual Report on Form 10-K and its Quarterly Report on Form 10-Q for the quarterly period ended December 31, 2011 for a complete list of risk factors.

COACH, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
For the Quarters and Nine Months Ended March 31, 2012 and April 2, 2011
(in thousands, except per share data)
(unaudited)
		QUARTER ENDED								NINE MONTHS ENDED
		March 31,				April 2,				March 31,				April 2,
		2012				2011				2012				2011
Net sales		$	1,108,981			$	950,706			$	3,607,989			$	3,126,832
Cost of sales			290,914				259,051				980,058				843,830
Gross profit			818,067				691,655				2,627,931				2,283,002
Selling, general and
administrative expenses			480,575				437,818				1,467,572				1,290,170
Operating income			337,492				253,837				1,160,359				992,832
Interest income, net			257				292				355				770
Other expense			(1,929	)			(1,134	)			(5,160	)			(3,068	)
Income before provision for income taxes			335,820				252,995				1,155,554				990,534
Provision for income taxes			110,818				66,980				368,074				312,215
Net income		$	225,002			$	186,015			$	787,480			$	678,319
Net income per share
Basic		$	0.78			$	0.63			$	2.73			$	2.29
Diluted		$	0.77			$	0.62			$	2.67			$	2.24
Shares used in computing net income per share
Basic			287,569				294,841				288,981				296,200
Diluted			293,496				301,620				294,952				302,589

COACH, INC.
GAAP TO NON-GAAP RECONCILIATION
For the Quarter Ended April 2, 2011
(in thousands, except per share data)
(unaudited)
		QUARTER ENDED
		April 2, 2011
		GAAP Basis			Tax				Japan				Charitable				Non-GAAP Basis
		(As Reported)			Adjustment				Donation				Contribution				(Excluding Items)
Selling, general and
administrative expenses		$	437,818		$	-			$	4,809			$	20,869			$	412,140
Operating income		$	253,837		$	-			$	(4,809	)		$	(20,869	)		$	279,515
Income before provision for income taxes		$	252,995		$	-			$	(4,809	)		$	(20,869	)		$	278,673
Provision for income taxes		$	66,980		$	(15,517	)		$	(2,022	)		$	(8,139	)		$	92,658
Net income		$	186,015		$	15,517			$	(2,787	)		$	(12,730	)		$	186,015
Diluted Net income per share		$	0.62		$	0.05			$	(0.01	)		$	(0.04	)		$	0.62

COACH, INC.
GAAP TO NON-GAAP RECONCILIATION
For the Nine Months Ended March 31, 2012 and April 2, 2011
(in thousands, except per share data)
(unaudited)
		NINE MONTHS ENDED
		March 31, 2012															April 2, 2011
		GAAP Basis			Tax				Charitable				Non-GAAP Basis				Non-GAAP Basis
		(As Reported)			Adjustment				Contribution				(Excluding Items)				(Excluding Items)
Selling, general and
administrative expenses		$	1,467,572		$	-			$	20,270			$	1,447,302			$	1,264,492
Operating income		$	1,160,359		$	-			$	(20,270	)		$	1,180,629			$	1,018,510
Income before provision for income taxes		$	1,155,554		$	-			$	(20,270	)		$	1,175,824			$	1,016,212
Provision for income taxes		$	368,074		$	(12,365	)		$	(7,905	)		$	388,344			$	337,893
Net income		$	787,480		$	12,365			$	(12,365	)		$	787,480			$	678,319
Diluted Net income per share		$	2.67		$	0.04			$	(0.04	)		$	2.67			$	2.24
		NINE MONTHS ENDED
		April 2, 2011
		GAAP Basis			Tax				Japan				Charitable				Non-GAAP Basis
		(As Reported)			Adjustment				Donation				Contribution				(Excluding Items)
Selling, general and
administrative expenses		$	1,290,170		$	-			$	4,809			$	20,869			$	1,264,492
Operating income		$	992,832		$	-			$	(4,809	)		$	(20,869	)		$	1,018,510
Income before provision for income taxes		$	990,534		$	-			$	(4,809	)		$	(20,869	)		$	1,016,212
Provision for income taxes		$	312,215		$	(15,517	)		$	(2,022	)		$	(8,139	)		$	337,893
Net income		$	678,319		$	15,517			$	(2,787	)		$	(12,730	)		$	678,319
Diluted Net income per share		$	2.24		$	0.05			$	(0.01	)		$	(0.04	)		$	2.24

COACH, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
At March 31, 2012, July 2, 2011 and April 2, 2011
(in thousands)
(unaudited)
		March 31,			July 2,			April 2,
		2012			2011			2011
ASSETS
Cash, cash equivalents and short term investments		$	929,670		$	702,038		$	886,159
Receivables			169,467			142,898			131,731
Inventories			475,364			421,831			391,442
Other current assets			185,047			185,621			153,070
Total current assets			1,759,548			1,452,388			1,562,402
Property and equipment, net			602,685			582,348			552,842
Other noncurrent assets			622,637			600,380			606,621
Total assets		$	2,984,870		$	2,635,116		$	2,721,865
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable		$	107,394		$	118,612		$	92,632
Accrued liabilities			514,992			473,610			456,606
Current portion of long-term debt			847			795			791
Total current liabilities			623,233			593,017			550,029
Long-term debt			22,607			23,360			23,454
Other liabilities			400,128			406,170			405,724
Stockholders' equity			1,938,902			1,612,569			1,742,658
Total liabilities and stockholders' equity		$	2,984,870		$	2,635,116		$	2,721,865

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