UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549

FORM 10-K

For the Fiscal Year Ended June 29, 2013

27, 2015OR

Commission file number: 1-16153

516 West 34th34th Street, New York, NY 10001

Securities Registered Pursuant to Section 12(g) of the Act: None

COACH, INC.

TABLE OF CONTENTS

periods.

COACH, INC.GAAP TO NON-GAAP RECONCILIATIONFor the Years Ended June 30, 2012 and July 2, 2011(in millions, except per share data)

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

27, 2015
OR

516 West 34^th34th Street, New York, NY 10001

COACH, INC.
GAAP TO NON-GAAP RECONCILIATION
For the Years Ended June 30, 2012 and July 2, 2011
(in millions, except per share data)

UNITED STATES
SECURITES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K

FINANCIAL STATEMENTS
For the Fiscal Year Ended June 29, 2013

COACH, INC.

New York, New York 10001

SEGMENTS

these customers' websites.

Macau for Coach brand products.

SEASONALITY

sales, including adverse weather conditions.

Unless the context requires otherwise, references to the "Coach brand" do not include the Stuart Weitzman brand and references to the "Stuart Weitzman brand" do not include the Coach brand.

Fiscal 2012 Items

Net Sales

2014 as part of its Transformation Plan. Excluding items affecting comparability, unallocated operating expenses increased by 1.6% or $7.9 million to $502.4 million from $494.5 million.

Net Incometaxes.

financing activities in fiscal 2015.

Net cash used in financing activities

Revolving Credit Facilities

Commitments

Contractual Obligations

Investments

Inventories

to our acquisitions.

These quantitative disclosures do not represent the maximum possible loss or any expected loss that may occur, since actual results may differ from those estimates.

A sensitivity analysis of the effects of foreign exchange rate fluctuations on the fair values of our derivative contracts was performed to assess the risk of loss. As of June 27, 2015, a 10% devaluation of the U.S. Dollar against the exchange rates for foreign currencies under contract would result in an immaterial impact on derivative contract fair values.

27, 2015.

5.

6. ACQUISITIONS

10.

13.the next five fiscal years and thereafter is as follows (in millions):

15.

SPECIAL NOTE ON FORWARD-LOOKING INFORMATION

ITEM 1. BUSINESS

FINANCIAL INFORMATION ABOUT SEGMENTS

NARRATIVE DESCRIPTION OF BUSINESS

PRODUCTS

DESIGN AND MERCHANDISING

SEGMENTS

North America Segment

these customers' websites.

Other

MANUFACTURING

Macau for Coach brand products.

SEASONALITY

sales, including adverse weather conditions.

EMPLOYEES

ITEM 1A. RISK FACTORS

ITEM 1B. UNRESOLVED STAFF COMMENTS

ITEM 2. PROPERTIES

ITEM 3. LEGAL PROCEEDINGS

ITEM 4. MINE SAFETY DISCLOSURES

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Market and Dividend Information

Guess?, Inc.,

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Unless the context requires otherwise, references to the "Coach brand" do not include the Stuart Weitzman brand and references to the "Stuart Weitzman brand" do not include the Coach brand.

FISCAL 20132015 COMPARED TO FISCAL 2012

Items Affecting Comparability

Fiscal 2012 Items

Currency Fluctuation Effects

Net Sales

Operating Income

2014 as part of its Transformation Plan. Excluding items affecting comparability, unallocated operating expenses increased by 1.6% or $7.9 million to $502.4 million from $494.5 million.

Net Incometaxes.

FISCAL 2012 COMPARED TO FISCAL 2011

Items Affecting Comparability

Fiscal 2012 and 2011 Items

Currency Fluctuation Effects

Net Sales

Operating Income

Provision for Income Taxes

Net Income

Net Income per Diluted Share

FISCAL 2013, FISCAL 2012 AND FISCAL 2011 ITEMS AFFECTING COMPARABILITY OF OUR FINANCIAL RESULTS

FINANCIAL CONDITION

Net increase in

financing activities in fiscal 2015.

2014.

Net cash used in financing activities

Revolving Credit Facilities

Common Stock Repurchase Program

Liquidity and Capital Resources

Commitments

Contractual Obligations

affected.

operating results.

senior management team and other key employees who have significant experience and expertise in our industry and our operations. In recent years, we have experienced turnover of several senior management roles and we have focused time and resources on recruiting or promoting from within the new members of our current senior management team. The continued turnover of senior management or the unexpected loss of one or more of our key personnel or any negative public perception with respect to these individuals could also have a material adverse effect on our business, results of operations and financial condition. We do not maintain key-person or similar life insurance policies on any of senior management team or other key personnel.

Provisions in Coach’s charter, bylaws and Maryland law may delay or prevent an acquisition of Coach by a third party.

Economic conditions

affected.

operating results.

Failure to adequately protect our intellectual property and curb the sale of counterfeit merchandise could injure the brand and negatively affect sales.

operations.

Our business isoperate a retail store subject to increased costs duea lease and decide to excess inventories ifclose it as we misjudgehave done in the demandpast and will do in the future, we may remain obligated under the applicable lease for, our products.

Fluctuations in our tax obligations and effective tax rate may result in volatility of our financial results and stock price.

Provisions in Coach’s charter, bylaws and Maryland law may delay or prevent an acquisition of Coach by a third party.

Withdrawals and exchanges of HDRs into Common Stockcommon stock traded on the NYSE might adversely affect the liquidity of the HDRs.

Charitable Contributions and Tax Adjustments

North America

International

Restructuring and Transformation

Charitable Contributions and Tax Adjustments

North America

International

Charitable Contributions and Tax Adjustments

North America

International

This document, and the documents incorporated by reference in this document, in our press releases and in oral statements made from time to time by us or on our behalf, contain certain ~~forward-looking statements~~"forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, and are based on management’s current expectations. These forward-looking statements can be identified by the use of forward-looking terminology such as “believes,” “may,” “will,” “should,” “expect,” “confidence,” “trends,” “intend,” “estimate,” “on track,” “are positioned to,” “on course,” “opportunity,” “continue,” “project,” “guidance,” “target,” “forecast,” “anticipated,” “plan,” “potential,” the negative of these terms or comparable terms. The Company assumes no obligation to revise or update any forward-looking statements for any reason, except as required by law.

Coach, Inc.’s actual results could differ materially from the results contemplated by these forward-looking statements due to a number of important factors, including those discussed in the sections of this Form 10-K filing entitled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” These factors are not necessarily all of the important factors that could cause actual results to differ materially from those expressed in any of the forward-looking statements contained in this Form 10-K.

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.

Founded in 1941, Coach Inc. was acquired by Sara Lee Corporation (“Sara Lee”) in 1985. In June 2000, Coach was incorporated in the state of Maryland. In October 2000, Coach was listed on the New York Stock Exchange and sold approximately 68 million shares of common stock, split adjusted, representing 19.5% of the then outstanding shares. In April 2001, Sara Lee completed a distribution of its remaining ownership in Coach via an exchange offer, which allowed Sara Lee stockholders to tender Sara Lee common stock for Coach common stock.

Coach’s international expansion strategy is to enter into joint ventures and distributor relationships to build market presence and capability. To further accelerate brand awareness, aggressively grow market share and to exercise greater control of our brand, Coach ~~may subsequently acquire~~has historically acquired its partner’s interests.

In fiscal ~~2013, Reed Krakoff, President, Executive Creative Director, announced his intention to not renew his contract and it is expected that in the first quarter of fiscal year 2014 he will depart from~~2015, the Company in connection with the sale of the Reed Krakoff business. In June 2013, the Company announced that Stuart Vevers will assume the position of Executive Creative Director, joining Coach in the first quarter of fiscal 2014.

Coach's New York-based design team is responsible for conceptualizing and directing the design of all Coach products. Designers have access to Coach's extensive archives of product designs created over the past 70 years, which are a valuable resource for new product concepts. Coach designers are also supported by a strong merchandising team that analyzes sales, market trends and consumer preferences to identify business opportunities that help guide each season's design process. Merchandisers also analyze, edit, add and delete products to maximize sales across all channels. The product category teams, each comprised of design, merchandising/product development and sourcing specialists help Coach execute design concepts that are consistent with the brand's strategic direction.

Coach's design and merchandising teams work in close collaboration with all of our licensing partners to ensure that the licensed products (watches, footwear, eyewear and fragrance) are conceptualized and designed to address the intended market opportunity and convey the distinctive perspective and lifestyle associated with the Coach brand.

~~In fiscal 2013, the Company changed its~~has three reportable ~~segments to a geographic focus, recognizing the expansion and growth of sales through its international markets. This is consistent with organizational changes announced during fiscal 2012.~~

Prior to this change, the Company was organized and reported its results based on directly-operated and indirect business units. The Company has recently experienced substantial growth in its international business, while at the same time has converted formerly wholesale businesses in several key markets such as China, Taiwan and Korea to Company-operated businesses. Reflecting this growth and corresponding declines in indirect businesses relative to Company-operated, the Company implemented a realignment of its business units based on geography, consistent with the organizational changes.

segments:

North American Retail Stores — Coach retail stores are located in regional shopping centers and metropolitan areas throughout the U.S. and Canada. The retail stores carry an assortment of products depending on their size, ~~and~~ location and customer preferences. Our flagship stores, which offer the broadest assortment of Coach products, are located in high-visibility ~~locations such as New York, Chicago and San Francisco.~~

~~Our stores are sophisticated, sleek, modern and inviting. They showcase~~locations.

In fiscal 2015, we have reduced the world of Coach and enhance the shopping experience while reinforcing the image of the Coach brand. The modern store design creates a distinctive environment to display our products. Store associates are trained to maintain high standards of visual presentation, merchandising and customer service. The result is a complete statement of the Coach effortless New York style at the retail level.

~~The~~ number of ~~Coach~~ retail stores and ~~their~~ total ~~and average~~ square footage, ~~has remained relatively constant over the last three fiscal years:~~

Fiscal Year Ended
June 29,
2013 June 30,
2012 July 2,
2011
Retail stores 351 354 345
Net (decrease) increase vs. prior year (3 ) 9 3
% (decrease) increase vs. prior year (0.8 )% 2.6 % 0.9 %
Retail square footage 952,422 959,099 936,277
Net (decrease) increase vs. prior year (6,677 ) 22,822 6,697
% (decrease) increase vs. prior year (0.7 )% 2.4 % 0.7 %
Average square footage 2,713 2,709 2,714

Asas we continue to optimize our ~~current~~ real estate ~~positions at lease term over~~position. We expect this trend to continue in the next ~~few years,~~fiscal year with the ~~Company expects~~anticipated closure of approximately 15-20 North America retail stores in the fiscal year ending July 2, 2016 ("fiscal 2016"), attributable to ~~close underperforming doors~~our Transformation Plan, as described in Note 3, "Transformation and ~~expand locations in key markets, resulting in a slight decrease in total square footage and a slight increase in average store square footage.~~

Other Actions."

North American ~~Factory~~Outlet Stores — Coach's ~~factory~~outlet stores serve as an efficient means to sell ~~manufactured-for-factory-store~~manufactured-for-outlet product, including ~~factory~~outlet exclusives, ~~as well as~~and to a lesser extent, discontinued ~~and irregular~~ inventory outside the retail channel. These stores operate under the Coach name and are geographically positioned primarily in established outlet centers that are generally ~~more than 30 miles from~~in close proximity to major markets.

Coach’s ~~factory~~outlet store design, visual presentations and customer service levels support and reinforce the brand's image. Through these ~~factory~~outlet stores, Coach targets value-oriented customers.

Over the next few years, we expect to continue to see ~~continued~~modest to no growth in ~~factory~~outlet store square footage ~~driven both by new distribution and expansions~~ as we ~~right size~~continue to optimize our real estate position across channels by expanding our most productive ~~doors~~stores to accommodate a broader expression of lifestyle assortment ~~and increased volume.~~

while continuing to assess opportunities to close under-performing stores.

Internet — Coach views its www.coach.com website as a key communications vehicle for the brand to promote traffic in Coach retail stores and department store locations and build brand ~~awareness.~~awareness, as well as an additional channel to sell Coach brand products directly to customers. With approximately 7464 million unique visits to ~~the e-commerce websites~~www.coach.com in fiscal ~~2013,~~2015, our online store provides a showcase environment where consumers can browse through a selected offering of the latest styles and colors. Our e-commerce programs also include our invitation-only ~~factory flash~~outlet Internet sales site, ~~and third-party flash sites.~~

~~U.S.~~where we have considerably reduced the number of promotional events since fiscal 2014.

North America Wholesale — Coach began as a U.S. wholesaler to department stores and this channel ~~remains~~continues to remain a part of our overall consumer reach. Today, we work closely with our partners to ensure a clear and consistent product presentation. Coach enhances its presentation through the creation of shop-in-shops with proprietary Coach fixtures within the department store environment. Coach custom tailors its assortments through wholesale product planning and allocation processes to match the attributes of our department store consumers in each local market. ~~While overall U.S. department store sales have slowed over the last few years, the handbag and accessories category has remained strong. The Company~~Coach continues to closely manage inventories in this channel given the highly promotional environment at point-of-sale. ~~The Company has implemented~~Coach utilizes automatic replenishment with major accounts in an effort to optimize inventory across wholesale doors. Over the next ~~few years,~~year, we expect to ~~make significant investment~~continue investing in the elevation of ~~store environments in this channel.~~

~~Coach's~~shop-in-shop environments.

Coach brand's products are sold in approximately 1,000 wholesale locations in the U.S. and Canada. Our most significant U.S. wholesale customers are Macy’s (including Bloomingdale's), Dillard's, Nordstrom, ~~Saks Fifth Avenue,~~ Lord & Taylor, The Bay, Bon Ton, Belk and Von Maur. Coach products are also available on ~~macys.com, bloomingdales.com, dillards.com, nordstrom.com, lordandtaylor.com, thebay.com, bonton.com, belk.com and vonmaur.com.~~

Our International Markets operate department store concession shop-in-shop locations and freestanding flagship, retail and ~~factory~~outlet stores as well as e-commerce websites. Flagship stores, which offer the broadest assortment of Coach products, are located in select high-visibility shopping districts.

We expect our International segment to ~~open new doors over the next several years, growing low to mid-single digits. The balance of Coach international (China, Asia and Europe) anticipate their owned-retail doors growing low double digit~~reflect modest growth in store count over the next few ~~years.~~

~~Coach~~ years, particularly within mainland China and Europe.

International Wholesale — ~~This~~In addition to our company-operated stores, this channel ~~represents~~includes sales to international wholesale distributors and authorized retailers. Travel retail represents the largest portion of our customers’ sales in this channel. However, we continue to drive growth by expanding our distribution to reach local consumers in ~~emerging~~new markets. Coach has developed relationships with a select group of distributors who sell Coach products through department stores and freestanding retail locations in 25approximately 45 countries. Coach's current network of international distributors ~~serves~~serve the following domestic and/or travel retail markets: ~~Aruba,~~Argentina, Australia, Austria, Bahamas, Bahrain, Benelux, Brazil, Canada, Chile, Greater China, Colombia, Denmark, Dominican Republic, Finland, France, ~~Hong Kong, India,~~Germany, Indonesia, Italy, Japan, South Korea, Kuwait, ~~Macau,~~Lebanon, Malaysia, Mexico, New Zealand, Norway, Panama, Peru, Philippines, Portugal, Qatar, Saudi Arabia, Singapore, Spain, Sweden, Switzerland, Taiwan, Thailand, ~~UAE, US~~the United Arab Emirates, the United Kingdom, Uruguay, U.S. & Territories, Venezuela and Vietnam.

For locations not in freestanding stores, Coach has created shop-in-shops and other image enhancing environments to increase brand appeal and stimulate growth. Coach continues to improve productivity in this channel by opening larger image-enhancing locations, expanding existing stores and closing less productive stores. Coach's most significant international wholesale customers are the DFS Group, Everrich DFS Corp, Lotte Group, Shilla Group and Vantage Point.

Coach's products are sold in approximately 430 wholesale locations.

Stuart Weitzman — The ~~following table shows the number of~~Stuart Weitzman brand is sold primarily through department stores in North America and international distributors, including approximately 600 wholesale locations, ~~at which Coach~~and within numerous independent third party distributors. Its most significant wholesale customers include Nordstrom, Saks, and Neiman Marcus. Furthermore, Stuart Weitzman products are ~~sold:~~

also sold in freestanding flagship and retail stores, and e-commerce websites. As of June 27, 2015, Stuart Weitzman had 54 directly operated stores with a total square footage of 91,101 and an average square footage of 1,687.

Products made under license are, in most cases, sold through all of the channels discussed above and, with ~~Coach's~~the Company's approval, these licensees have the right to distribute ~~Coach brand~~ products selectively through several other ~~channels:~~channels, including: shoes in department store ~~shoe~~ salons, watches in selected jewelry stores and eyewear and sunwear in selected optical retailers. These venues provide additional, yet controlled, exposure of ~~the Coach brand. Coach's~~our brands. Our licensing partners pay royalties ~~to Coach~~ on their net sales of ~~Coach~~our branded products. However, such royalties are not material to ~~the Coach~~our business as they currently comprise less than 1% of ~~Coach’s~~the Company's total net sales. The licensing agreements generally give Coach the right to terminate the license if specified sales targets are not achieved.

The Other segment also consists of sales generated in ancillary channels.

See Note 16, "Segment Information" for more information about all segments.

The following discussion - including "Products," "Design and Merchandising," "Marketing," "Manufacturing," "Distribution," "Information Systems," "Trademarks and Patents," "Seasonality," "Government Regulation," "Competition" and "Employees" - is based on the Coach brand.

Coach brand’s primary product offerings, manufactured by third-party suppliers, include women’s and men’s bags, small leather goods, footwear, business cases, ready-to-wear including outerwear, watches, weekend and travel accessories, scarves, sunwear, fragrance, jewelry, travel bags and other lifestyle products. The following table shows net sales for each product category represented for the Coach brand (in millions):

During fiscal 2015, the Company reevaluated its product categories and determined that small accessory handbags and travel bags, which were previously classified as "Women's Accessories" and "All Other Products," respectively, are viewed by management to be part of its "Women's Handbag" product category. Prior periods have been adjusted to reflect the current period classification.

Women’s Handbags — Women’s handbag collections feature classically inspired designs as well as fashion designs. Typically, there are three to four collections per quarter and four to seven styles per collection. These collections are designed to meet the fashion and functional requirements of our broad and diverse consumer base.

Women’s Accessories — Women’s accessories include small leather goods and novelty accessories. Women’s small leather goods, which complement our handbags, include money pieces, wristlets and cosmetic cases. Key rings and charms are also included in this category.

Men’s — Men’s bag collections include business cases, computer bags, messenger-style bags and totes. Men’s small leather goods consist primarily of wallets, card cases and belts. Novelty accessories include time management and electronic accessories.

All Other Products (excluding the Stuart Weitzman brand) consist of the following:

Coach brand's design team, led by the Executive Creative Director, Stuart Vevers, is responsible for conceptualizing and directing the design of all products. Designers have access to Coach's extensive archives of product designs created since Coach's inception, which are a valuable resource for new product concepts. Our designers are also supported by a strong merchandising team that analyzes sales, market trends and consumer preferences to identify market opportunities that help guide each season's design process and create a globally relevant product assortment. Merchandisers also manage the product life cycle to maximize sales and profitability across all channels. The product category teams, each comprised of design, merchandising/product development and sourcing specialists help the Coach brand execute design concepts that are consistent with the brand's strategic direction.

Our design and merchandising teams work in close collaboration with all of our licensing partners to ensure that the licensed products (watches, footwear, eyewear and fragrance) are conceptualized and designed to address the intended market opportunity and convey the distinctive perspective and lifestyle associated with our brands.

Coach brand's global marketing strategy is to deliver a consistent, relevant and ~~relevant~~multi-layered message every time the consumer comes in contact with ~~the Coach brand~~our brands through our communications and visual merchandising. ~~The Coach~~Coach's image is created and executed by our creative marketing, visual merchandising and public relations ~~teams.~~teams, as well as with outside creative agencies. Coach also has a sophisticated consumer and market research capability, which helps us assess consumer attitudes and trends.

In conjunction with promoting a consistent global image, Coach uses its extensive customer database and consumer knowledge to target specific products and communications to specific consumers to efficiently stimulate sales across all distribution channels.

Coach engages in several consumer communication initiatives, including direct marketing activities and national, regional and local advertising. Total expenses ~~related~~attributable to ~~consumer communications~~Coach brand marketing-related events in fiscal ~~2013~~2015 were ~~$102.7~~$158.9 million, or approximately 2%4% of net sales, compared to $130.1 million in fiscal 2014, or approximately 3% of net sales.

~~Coach’s~~

Coach's wide range of direct marketing activities includes email contacts and catalogs targeted to promote sales to consumers in their preferred shopping venue. In addition to building brand awareness ~~the coach.com website serves~~and driving online revenue, Coach's websites serve as an effective brand communication vehicle by providing a showcase environment where consumers can browse through a strategic offering of the latest styles and colors, which drives store traffic and enables the collection of customer data.

As part of the Coach's direct marketing strategy, ~~the Company uses its database~~we use databases primarily consisting of approximately 1928 million households in North America, ~~and 8~~approximately 11 million households in ~~Asia.~~Asia and approximately 380,000 households in Europe. Email contacts and direct mail pieces are an important part of Coach's ~~principal means of~~ communication and are sent to selected households to stimulate consumer purchases and build brand awareness. ~~The growing number of visitors~~Visitors to ~~the coach.com~~Coach's e-commerce sites in the U.S., Canada, Japan and China ~~provides~~provide an opportunity to increase the size of these ~~databases.~~

databases, as well as point of sale transactions globally except where restricted.

In fiscal ~~2013,~~2015, Coach had informational websites in ~~Australia, Bahrain,~~ Brazil, Chile, Colombia, ~~France,~~Mexico, Panama, Peru, Venezuela, Australia, Hong Kong, Indonesia, Korea, Malaysia, New Zealand, Singapore, Taiwan, Thailand, Vietnam, France, Ireland, ~~Korea, Kuwait, Malaysia, Mexico, Panama, Peru,~~ Portugal, Spain, United Kingdom, United Arab Emirates, Saudi Arabia, ~~Singapore, Spain, Taiwan, Thailand, UAE, United Kingdom, Venezuela~~Kuwait and ~~Vietnam.~~Bahrain. In addition, the Company utilizes and continues to explore ~~new~~digital technologies such as blogs and social ~~networking~~media websites, including Twitter, Facebook, Instagram, Pinterest, WeChat and Sina Weibo, as a cost effective consumer communication opportunity to increase on-line and store sales, acquire new customers and build brand awareness.

Coach carefully balances its commitments to a limited number of “better brand” partners with demonstrated integrity, quality and reliable delivery. Our manufacturers are located in many countries, including Vietnam, mainland China, ~~Vietnam,~~the Philippines, India, ~~Philippines,~~ Thailand, Italy, Hong Kong, Myanmar and the United States. Coach continues to evaluate new manufacturing sources and geographies to deliver the finest quality products at the lowest cost and help limit the impact of manufacturing in inflationary markets. During fiscal ~~2013, one vendor~~2015, the Coach brand had two vendors who each provided ~~approximately 12%~~slightly over 10% of ~~Coach’s~~the Company's total units. These two vendors are geographically dispersed and have multiple locations in different countries. No other individual vendor currently provides more than approximately 10% of Coach’s total units. Before partnering with a vendor, Coach evaluates each facility by conducting a quality and business practice standards audit. Periodic evaluations of existing, previously approved facilities are conducted on a random basis. We believe that all of our manufacturing partners are in material compliance with Coach’s integrity standards.

These independent manufacturers each or in aggregate support a broad mix of product types, materials and a seasonal influx of new, fashion oriented styles, which allows us to meet shifts in marketplace demand and changes in consumer preferences.

Our raw material suppliers, independent manufacturers and licensing partners, must achieve and maintain high quality standards, which are an integral part of our identity. One of Coach's keys to success lies in the rigorous selection of raw materials. Coach has longstanding relationships with purveyors of fine leathers and hardware. Although Coach products are manufactured by independent manufacturers, we maintain a level of oversight in the selection of the raw materials that are used in all of our products. Compliance with quality control standards is monitored through on-site quality inspections at all independent manufacturing facilities.

We maintain control of the supply chain process from design through manufacture. We are able to do this by qualifying raw material suppliers and by maintaining sourcing management offices in Vietnam, Greater China, Hong Kong and the Philippines that work closely with our independent manufacturers. This broad-based, global manufacturing strategy is designed to optimize the mix of cost, lead times and construction capabilities.

In North America, the Company operates an 850,000 square foot distribution and consumer service facility in Jacksonville, ~~Florida.~~Florida for Coach brand products. This automated facility uses a bar code scanning warehouse management system. Coach's distribution center employees use handheld ~~radio frequency~~ scanners to read product bar codes, which allow them to more accurately process and pack orders, track shipments, manage inventory and generally provide excellent service to our customers. ~~Coach's~~Coach brand products are primarily shipped to Coach retail stores and wholesale customers via express delivery providers and common carriers, and direct to consumers via express delivery providers.

~~To support our growth~~

Outside of North America, the Company has established regional distribution centers, through third-parties, in Shanghai, China and ~~the region, in fiscal 2010 we established an Asia distribution center in Shanghai, owned and operated by a third-party, allowing us to better manage the logistics in this region while reducing costs.~~Oldenzaal, The ~~Company~~Netherlands for Coach brand products. Coach also operates local distribution centers, through third-parties, in Japan, China, Hong Kong, ~~Singapore,~~South Korea, Taiwan, Malaysia, ~~Korea~~Singapore and ~~the Netherlands.~~

The foundation of Coach's information systems is its Enterprise Resource Planning (“ERP”) system. This ~~fully~~ integrated system supports ~~all aspects of~~ finance and accounting, procurement, inventory control, sales and store replenishment. The system functions as a central repository for ~~all of~~ Coach's transactional information, resulting in increased efficiencies, improved inventory control and a better understanding of consumer demand.

Coach owns all of the material worldwide trademark rights used in connection with the production, marketing and distribution of all of its products. In addition, it licenses trademarks and copyrights used in connection with the production, marketing and distribution of certain categories of goods and limited edition collaborative special projects. Coach also owns and maintains worldwide registrations for trademarks in all relevant classes of products in each of the countries in which ~~Coach~~our products are sold. Major trademarks include~~Coach, Coach~~ COACH, COACH NEW YORK, COACH and ~~lozenge design, Coach~~Horse & Carriage Design, COACH and ~~tag design,~~Story Patch Design, COACH and Lozenge Design, COACH and Tag Design, Signature C ~~design, Coach~~Design, and Op Art ~~design~~C Design and ~~The Heritage Logo (Coach Leatherware Est. 1941)~~COACH LEATHERWARE EST. 1941 (the "Heritage Logo"). Coach is not dependent on any one particular trademark or design patent although Coach believes that the Coach name is important for its business. In addition, several of Coach's products are covered by design patents orand a utility patent ~~applications.~~application. Coach aggressively polices its trademarks and trade dress, and pursues infringers both domestically and internationally. It also pursues counterfeiters domestically and internationally through leads generated internally, as well as through its network of investigators, the Coach hotline and business partners around the world.

Coach expects that its material trademarks will remain in ~~existence~~full force and effect for as long as ~~Coach continues~~we continue to use and renew them.

Because Coach ~~has no material patents.~~

~~Because Coach~~brand's products are frequently given as gifts, ~~Coach has historically realized,~~we experience seasonal variations in net sales, operating cash flows and ~~expects~~working capital requirements, primarily related to ~~continue to realize,~~seasonal holiday shopping. During the first fiscal quarter, we build inventory for the holiday selling season. In the second fiscal quarter, working capital requirements are reduced substantially as we generate higher net sales and operating income, ~~in the second quarter of its fiscal year, which includes~~especially during the holiday months of November and December. ~~In addition, fluctuations~~Fluctuations in net sales, operating income and operating ~~income~~cash flows in any fiscal quarter ~~are~~may be affected by ~~the timing of seasonal wholesale shipments and~~ other events affecting retail ~~sales. Over the last several years, we have achieved higher levels of growth in the non-holiday quarters, which has reduced these seasonal fluctuations.~~

Most of Coach's imported products are subject to duties, indirect taxes, quotas and non-tariff trade barriers that may limit the quantity of products that Coach may import into the U.S. and other countries or may impact the cost of such products. Coach is not materially restricted by quotas or other government restrictions in the operation of its business, however customs duties do represent a material part of total product cost. To maximize opportunities, Coach operates complex supply chains through foreign trade zones, bonded logistic parks and other strategic initiatives such as free trade agreements. Additionally, ~~the Company~~Coach operates a direct import business in many countries worldwide. As a result, Coach is subject to stringent government regulations and restrictions with respect to its cross-border activity either by the various customs and border protection agencies or by other government agencies which control the quality and safety of ~~the Company’s~~Coach’s products. Coach maintains an internal global trade and customs organization to help manage its import/export activity.

The premium handbag, footwear and accessories industry is highly competitive. ~~The Company~~Coach competes primarily with European and American luxury and accessible luxury brands as well as private label retailers, including some of ~~Coach’s~~Coach's wholesale customers. Over the last several years ~~the category has~~these categories have grown, encouraging the entry of new competitors as well as increasing the competition from existing competitors. This increased competition ~~also~~ drives consumer interest in this brand loyal category.

See the ~~Segment Information note~~Note 16, "Segment Information" presented in the Notes to the Consolidated Financial Statements for geographic information.

Our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and all amendments to these reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, are available free of charge on our investor website, located atwww.coach.com/investors under the caption “SEC Filings”, as soon as reasonably practicable after they are filed with or furnished to the Securities and Exchange Commission. These reports are also available on the Securities and Exchange Commission’s website atwww.sec.gov. No information contained on any of our websites is intended to be included as part of, or incorporated by reference into, this Annual Report on Form 10-K.

The Company has included the Chief Executive Officer (“CEO”) and Chief Financial Officer certifications regarding its public disclosure required by Section 302 of the Sarbanes-Oxley Act of 2002 as Exhibit 31.1 to this report on Form 10-K. Additionally, the Company filed with the New York Stock Exchange (“NYSE”) the CEO’s certification regarding the Company’s compliance with the NYSE’s Corporate Governance Listing Standards (“Listing Standards”) pursuant to Section 303A.12(a) of the Listing Standards, which indicated that the CEO was not aware of any violations of the Listing Standards by the Company.

During the fourth quarter of fiscal 2014, we announced a multi-year strategic plan with the objective of transforming the brand and reinvigorating growth, which will enable the Company to return to ‘best-in-class’ profitability. Key operational and cost elements in order to fund and execute this plan include: (i) the investment in capital improvements in our stores and wholesale locations to drive comparable sales improvement; (ii) the optimization and streamlining of our organizational model as well as the closure of underperforming stores in North America, and select International stores, (iii) the realignment of inventory levels and mix to reflect our elevated product strategy and consumer preferences; (iv) the investment in incremental advertising costs to elevate consumer perception of our brand, drive sales growth and promote our new strategy; and (v) the significant scale-back of our promotional cadence in an increased global promotional environment, particularly within our outlet Internet sales site. The Company believes that long-term growth can be realized through its transformational efforts over time. There is no assurance that such efforts will be successful in achieving long-term growth or changing the perception of the Company from an accessories brand to a global lifestyle brand. Furthermore, actual costs incurred under the Transformation Plan may differ from expectations based on our execution of the key operational and cost elements described above. Refer to Part II, Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations" and Note 3, "Transformation and Other Actions," for further information regarding the Transformation Plan.

If the execution of our transformation plan falls short, our business, financial condition and results of operation could be materially adversely ~~affect our financial condition, results of operations and consumer purchases of luxury items.~~

Our results can be impacted by a number of macroeconomic factors, including but not limited to consumer confidence and spending levels, unemployment, consumer credit availability, raw materials costs, fuel and energy costs, global factory production, commercial real estate market conditions, credit market conditions and the level of customer traffic in malls and shopping centers.

Demand for our products, and consumer spending in the premium handbag and accessories market generally, is significantly impacted by trends in consumer confidence, general business conditions, interest rates, the availability of consumer credit, and taxation. Consumer purchases of discretionary luxury items, such as Coach products, tend to decline during recessionary periods, when disposable income is lower.

Our growth depends on the continued success of existing products, as well as the successful design and introduction of new products. Our ability to create new products and to sustain existing products is affected by whether we can successfully anticipate and respond to consumer preferences and fashion trends. The failure to develop and launch successful new products could hinder the growth of our business. Also, any delay in the development or launch of a new product could result in our company not being the first to bring product to market, which could compromise our competitive position.

Additionally, our current growth strategy includes plans to expand in a number of international regions, including Asia and Europe. We currently plan to open additional Coach and Stuart Weitzman stores in mainland China, Europe and other international markets, both directly and through strategic partners. Our brands may not be well-established or widely sold in some of these markets, and we may have ~~entered into strategic agreements~~limited experience operating directly or working with ~~various~~our partners ~~to expand our operations in South America.~~there. In addition, we have recently taken control of certain of our retail operations in Europe and the Asia-Pacific region, including the United Kingdom, Spain, Ireland, Portugal, France and Germany during calendar 2013, and Malaysia and South Korea during calendar year 2012. We do not yet have significant experience directly operating in these countries, and in many of ~~them we face established competitors. Many of~~ these ~~countries~~markets have different operational characteristics, including but not limited to employment and labor, transportation, logistics, real estate, environmental regulations and local reporting or legal requirements.

Furthermore, consumer demand and behavior, as well as tastes and purchasing trends may differ in these countries, and as a result, sales of our product may not be successful, or the margins on those sales may not be in line with those we currently anticipate. Further, such markets will have upfront short-term investment costs that may not be accompanied by sufficient revenues to achieve typical or expected operational and financial performance and therefore may be dilutive to Coach in the short-term. In many of these countries, there is significant competition to attract and retain experienced and talented employees.

We have recently undertaken a transformation to broaden Coach’s brand identification from primarily accessories, to instead being viewed as a global lifestyle brand, anchored in accessories. We plan to achieve this by building upon our strong management and design teams and enhancing and building out the Coach experience through expanded and new product categories, enhanced retail environments and integrated marketing communications. However, there is no assurance that such efforts will be successful in changing the perception of Coach from an accessories brand to a global lifestyle brand.

Consequently, if our international expansion plans are unsuccessful, ~~our transformation falls short,~~ or we are unable to retain and/or attract key personnel, our business, financial condition and results of operation could be materially adversely affected.

We operate on a global basis, with approximately 39% of our net sales coming from operations outside of North America. While geographic diversity helps to reduce the Company’s exposure to risks in any one country, we are subject to risks associated with international operations, including, but not limited to:

During fiscal 2015, we acquired Stuart Weitzman Holdings, LLC, a leading designer and manufacturer of women's luxury footwear. We may have difficulty integrating the Stuart Weitzman business into our operations or otherwise successfully managing the expansion of the Stuart Weitzman business. Additionally, while we continually review potential acquisition opportunities, there can be no assurance that we will be able to identify suitable candidates or consummate these transactions on favorable terms or at all. The ~~success~~potential difficulties of integrating the operations of an acquired business, such as Stuart Weitzman, and realizing our expectations for an acquisition, including the benefits that may be realized, include, among other things:

Our failure to ~~retain~~successfully complete the ~~value~~integration of ~~the Coach brand~~any acquired business, including Stuart Weitzman, and ~~to respond to changing fashion and retail trends in a timely manner.~~

We believe that the Coach brand, established over 70 years ago, is regarded as America's preeminent designer, producer, and marketer of fine accessories and gifts for women and men. We attribute the prominence of the Coach brand to the unique combination of our original American attitude and design, our heritage of fine leather goods and custom fabrics, our superior product quality and durability and our commitment to customer service. Any misstep in product quality or design, customer service, marketing, unfavorable publicity or excessive product discountingany adverse consequences associated with future acquisition activities, could ~~negatively affect the image of our brand with our customers. Furthermore, the product lines we~~ have historically marketed and those that we plan to market in the future are becoming increasingly subject to rapidly changing fashion trends and consumer preferences. If we do not anticipate and respond promptly to changing customer preferences and fashion trends in the design, production, and styling of our products, as well as create compelling marketing and retail environments that appeal to our customers, our sales and results of operations may be negatively impacted. Even if our products do meet changing customer preferences and/or stay ahead of changing fashion trends, our brand image could become tarnished or undesirable in the minds of our customers or target markets, which could adversely impactan adverse effect on our business, financial condition and ~~results of operations.~~

Completed acquisitions may result in additional goodwill and/or an increase in other intangible assets on our balance sheet. We ~~face risks associated~~are required at least annually, or as facts and circumstances exist, to test goodwill and other intangible assets with ~~operating in international markets.~~

~~We operate on a global basis, with approximately 31% of our net sales coming from operations outside of North America. While geographic diversity helps~~indefinite lives to ~~reduce~~determine if impairment has occurred. If the ~~Company’s exposure to risks in any one country,~~testing performed indicates that impairment has occurred, we are ~~subject~~required to ~~risks associated~~record a non-cash impairment charge for the difference between the carrying value of the goodwill or other intangible assets with ~~international operations, including, but not limited to:~~

~~changes in exchange rates for foreign currencies, which may adversely affect~~indefinite lives and the ~~retail prices~~implied fair value of ~~our products, result in decreased international consumer demand,~~the goodwill or ~~increase our supply costs in those markets,~~the fair value of other intangible assets with ~~a corresponding negative impact on our gross margin rates,~~

~~compliance with laws relating to foreign operations, including the Foreign Corrupt Practices Act, the U.K. Bribery Act, which in general concern the bribery of foreign public officials,~~

~~political or economic instability or changing macroeconomic conditions in our major markets,~~

~~natural and other disasters, and~~

~~changes in legal and regulatory requirements resulting~~indefinite lives in the ~~imposition~~period the determination is made. We determined there was no impairment in fiscal 2015, fiscal 2014 and fiscal 2013; however, we cannot accurately predict the amount and timing of ~~new or more onerous trade restrictions, tariffs, embargoes, exchange~~any impairment of assets. Should the value of goodwill or other ~~government controls.~~

~~We monitor~~intangible assets become impaired, there could be a material adverse effect on our global foreign currency exposure and in order to minimize the impact on earnings of foreign currency rate movements, we hedge our subsidiaries’ U.S. dollar-denominated inventory purchases in Japan and Canada, as well as Coach’s cross currency denominated intercompany loan portfolio. We cannot ensure, however, that these hedges will fully offset the impact of foreign currency rate movements. Additionally, our international subsidiaries primarily use local currencies as the functional currency and translate their financial results from the local currency to U.S. dollars. If the U.S. dollar strengthens against these subsidiaries’ foreign currencies, the translation of their foreign currency denominated transactions may decrease consolidated net sales and profitability. Sales to our international wholesale customers are denominated in U.S. dollars.

We depend on digital technologies for the successful operation of our business, including corporate email communications to and from employees, customers and stores, the design, manufacture and distribution of our finished goods, digital marketing efforts, collection and retention of customer data, employee information, the processing of credit card transactions, online e-commerce activities and our interaction with the public in the social media space. The possibility of a cyber-attack on any one or all of these systems is a serious threat. The retail industry, in particular, has been the target of many recent cyber-attacks. As part of our business model, we collect, retain, and transmit confidential information over public networks. In addition to our own databases, we use third party service providers to store, process and transmit this information on our behalf. Although we contractually require these service providers to implement and use reasonable security measures, we cannot control third parties and cannot guarantee that a security breach will not occur in the future either at their location or within their systems. We also store all designs, goods specifications, projected sales and distribution plans for our finished products digitally. We have confidential security measures in place to protect both our physical facilities and digital systems from attacks. Despite these efforts, however, we may be vulnerable to targeted or random security breaches, acts of vandalism, computer viruses, misplaced or lost data, programming and/or human errors, or other similar events.

~~Consumer awareness~~

Awareness and sensitivity to privacy breaches and cyber security threats by consumers, employees and lawmakers is at an all-time high. Any misappropriation of confidential or personally identifiable information gathered, stored or used by us, be it intentional or accidental, could have a material impact on the operation of our business, including severely damaging our reputation and our relationships with our customers, employees and investors. We may also incur significant costs implementing additional security measures to protect against new or enhanced data security or privacy threats, or to comply with state, federal and international laws governing the unauthorized disclosure of confidential information as well as increased cyber security protection costs such as organizational changes, deploying additional personnel and protection technologies, training employees, and engaging third party experts and consultants and lost revenues resulting from unauthorized use of proprietary information including our

In addition, we maintain e-commerce sites in the U.S., Canada, Japan and China and have plans for additional e-commerce sites in other parts of the world. ~~In fiscal 2013,~~Additionally, Coach ~~had~~has informational websites in ~~28 countries.~~various countries, as described in Item I, "Business." Lastly, our e-commerce programs also include an invitation-only Coach ~~Factory~~outlet flash sale ~~site and third-party flash sales sites.~~site. Given the robust nature of our e-commerce presence and digital strategy, it is imperative that we and our e-commerce partners maintain uninterrupted operation of our: (i) computer hardware, (ii) software systems, ~~(ii)~~(iii) customer marketing databases, and (iv) ability to email our current and potential customers. Despite our preventative efforts, our systems are vulnerable from time-to-time to damage, disruption or interruption from, among other things, physical damage, natural disasters, inadequate system capacity, system issues, security breaches, email blocking lists, computer viruses or power outages. Any

We believe that the Coach brand, established almost 75 years ago, is regarded as America's preeminent designer, producer, and marketer of fine accessories and gifts for women and men. We attribute the prominence of the Coach brand to the unique combination of our original American attitude and design, our heritage of fine leather goods and custom fabrics, our superior product quality and durability and our commitment to customer service. Furthermore, the Stuart Weitzman brand is viewed as a leading design house of women's luxury footwear within North America, with a strong opportunity for growth globally, and is built upon the idea of crafting a beautifully-constructed shoe, merging fashion and function. Any misstep in product quality or design, customer service, marketing, unfavorable publicity or excessive product discounting could negatively affect the image of our brands with our customers. Furthermore, the product lines we have historically marketed and those that we plan to market in the future are becoming increasingly subject to rapidly changing fashion trends and consumer preferences, including the increasing shift to digital brand engagement and social media communication. If we do not anticipate and respond promptly to changing customer preferences and fashion trends in the design, production, and styling of our products, as well as create compelling marketing campaigns that appeal to our customers, our sales and results of operations may be negatively impacted. Our success also depends in part on our ability to execute on our Transformation Plan. Even if our products, marketing campaigns and retail environments do meet changing customer preferences and/or stay ahead of changing fashion trends, our brand image could become tarnished or undesirable in the minds of our customers or target markets, which could materially adversely impact our business, financial condition, and results of operations.

We monitor our global foreign currency exposure. In order to minimize the impact on earnings of foreign currency rate movements, we hedge our subsidiaries’ U.S. dollar-denominated inventory purchases in Japan and Canada, as well as the Company's cross currency denominated intercompany loan portfolio. We cannot ensure, however, that these hedges will fully offset the impact of foreign currency rate movements. Additionally, our international subsidiaries primarily use local currencies as the functional currency and translate their financial results from the local currency to U.S. dollars. If the U.S. dollar strengthens against these subsidiaries’ foreign currencies, the translation of their foreign currency denominated transactions may decrease consolidated net sales and profitability. Our continued international expansion will increase our exposure to foreign currency fluctuations. Sales to our international wholesale customers are primarily denominated in U.S. dollars.

As a result of operating retail stores outside of the U.S., we are also exposed to market risk from fluctuations in foreign currency exchange rates. A substantial weakening of foreign currencies against the U.S. dollar could impact consumers’ willingness or ability to travel abroad and/or purchase our products while traveling, as well as require us to raise our retail prices or reduce our profit margin in various locations outside of the U.S. In addition, our sales and profitability could be negatively impacted if consumers in those markets were unwilling to purchase our products at increased prices.

Our business and long-range planning process is designed to maximize our long-term strength, growth, and profitability, and not to achieve an earnings target in any particular fiscal quarter. We believe that this longer-term focus is in the best interests of the Company and our stockholders. At the same time, however, we recognize that it is helpful to provide investors with guidance as to our forecast of net sales, earnings per share and other financial metrics or projections. While we generally expect to provide updates to our financial guidance when we report our results each fiscal quarter, we do not have any responsibility to update any of our forward-looking statements at such times or otherwise. In addition, any longer-term guidance that we provide is based on goals that we believe, at the time guidance is given, are reasonably attainable for growth and performance over a number of years. However, such long-range targets are more difficult to predict than our current quarter and fiscal year expectations. If, or when, we announce actual results that differ from those that have been predicted by us, outside investment analysts, or others, our stock

We periodically return value to investors through payment of quarterly dividends. Investors may have an expectation that we will continue to pay our quarterly dividend at certain levels. The market price of our securities could be adversely affected if our cash dividend rate differs from investors’ expectations. See “If we are unable to pay quarterly dividends at intended levels, our reputation and stock price may be harmed” for addition discussion of our quarterly dividend.

We believe our trademarks, copyrights, patents, and other intellectual property rights are extremely important to our success and our competitive position. We devote significant resources to the registration and protection of our trademarks and to anti-counterfeiting efforts worldwide. In spite of our efforts, counterfeiting still occurs and if we are unsuccessful in challenging a third-party’s rights related to trademark, copyright, or patent this could adversely affect our future sales, financial condition, and results of operations. We are aggressive in pursuing entities involved in the trafficking and sale of counterfeit merchandise through legal action or other appropriate measures. We cannot guarantee that the actions we have taken to curb counterfeiting and protect our intellectual property will be adequate to protect the brand and prevent counterfeiting in the future. Our trademark applications may fail to result in registered trademarks or provide the scope of coverage sought. Furthermore, our efforts to enforce our intellectual property rights are often met with defenses and counterclaims attacking the validity and enforceability of our intellectual property rights. Unplanned increases in legal fees and other costs associated with defending our intellectual property rights could result in higher operating expenses. Finally, many countries’ laws do not protect intellectual property rights to the same degree as U.S. laws.

As a Company engaged in sourcing on a global scale, we are subject to the risks inherent in such activities, including, but not limited to:

We are subject to labor laws governing relationships with employees, including minimum wage requirements, overtime, working conditions, and citizenship requirements. Compliance with these laws may lead to increased costs and operational complexity and may increase our exposure to governmental investigations or litigation.

In addition, we require our independent manufacturers and suppliers to operate in compliance with applicable laws and regulations, as well as our Global Operating Principles and/or Supplier Selection ~~Guidelines,~~Guidelines; however, we do not control these manufacturers or suppliers or their labor, environmental or other business practices. Copies of our Global Business Integrity Program, Global Operating Principles and Supplier Selection Guidelines are ~~posted on~~available through our website, ~~coach.com.~~www.coach.com. The

We are dependent on a limited number of distribution and sourcing centers. Our ability to meet the needs of our customers and our retail stores and e-commerce sites depends on the proper operation of these centers. If any of these centers were to shut down or otherwise become inoperable or inaccessible for any reason, we could suffer a substantial loss of inventory and/or disruptions of deliveries to our retail and wholesale customers. While we have business continuity and contingency plans for our sourcing and distribution center sites, significant disruption of manufacturing or distribution for any of the above reasons could interrupt product supply, result in a substantial loss of inventory, increase our costs, disrupt deliveries to our customers and our retail stores, and, if not remedied in a timely manner, could have ana material adverse impact on our business. Because our distribution centers include automated and computer controlled equipment, they are susceptible to risks including power interruptions, hardware and system failures, software viruses, and security breaches. We maintain a distribution center in Jacksonville, Florida, ~~owned and~~ operated by Coach. To support our growth in mainland China and ~~the region, in fiscal 2010~~Europe, we established ~~an Asia~~ distribution ~~center~~centers in Shanghai, China and Oldenzaal, The Netherlands, owned and operated by a third-party, allowing us to better manage the logistics in ~~this region~~these regions while reducing costs. We also operate distribution centers, through third-parties, in Japan, mainland China, Hong Kong, Singapore, Taiwan, Malaysia, ~~Korea~~The United States and ~~the Netherlands.~~South Korea. The warehousing of ~~Coach~~the Company's merchandise, store replenishment and processing direct-to-customer orders is handled by these centers and a prolonged disruption in any center’s operation could materially adversely affect our business and operations.

~~Increases in our costs, such as raw materials, labor or freight could negatively impact our gross margin. Labor costs~~

We do not own any of our ~~manufacturers~~retail store locations. We lease our corporate-owned stores under long-term, non-cancelable leases, which usually have ~~been increasing significantly~~initial terms ranging from five and asten years, with renewal options typically in five year increments. We believe that the ~~middle class~~leases we enter into in ~~developing countries continues~~the future will likely be long-term and non-cancelable and have similar renewal options. Generally, our leases are “net” leases, which require us to ~~grow,~~pay our proportionate share of the cost of insurance, taxes, maintenance and utilities. We generally cannot cancel these leases at our option. If we determine that it is ~~unlikely that such cost pressure will abate. The cost of transportation has been increasing as well and it is unlikely such cost pressure will abate if oil prices continue~~no longer economical to ~~increase. We may not be able to offset such increases in raw materials, labor or transportation costs through pricing measures or other means.~~

The ability to successfully execute against our goals is heavily dependent on attracting, developing and retaining qualified employees, including our senior management team. Competition in our industry to attract and retain these employees is intense and is influenced by: our ability to offer competitive compensation and benefits, employee morale, our reputation, recruitment by other employers, perceived internal opportunities, non-competition and non-solicitation agreements and macro unemployment rates. Our transformation plan and its attendant changes regarding organizational efficiencies may intensify this risk.

We depend on the guidance of our ~~brand.~~

Our North American wholesale business, primarily consisting of the U.S. Wholesale business, comprised approximately 5% of total net sales for fiscal ~~2013.~~2015. Continued ~~consolidation~~fragmentation in the retail industry could further decrease the number of, or concentrate the ownership of, stores that carry our and our licensees’ products. Furthermore, a decision by the controlling owner of a group of stores or any other significant customer, whether motivated by competitive conditions, financial difficulties or otherwise, to decrease or eliminate the amount of merchandise purchased from us or our licensing partners could result in an adverse effect on the sales and profitability within this channel.

We currently have multi-year agreements with licensing partners for our footwear, ~~sunwear,~~eyewear, watches and fragrance products. See Item 1 —- “Business —- Products” ~~where discussed further.~~for additional discussion of our licensing arrangements. In the future, we may enter into additional licensing arrangements. The risks associated with our own products also apply to our licensed products as well as unique problems that our licensing partners may experience, including risks associated with each licensing partner’s ability to obtain capital, manage its labor relations, maintain relationships with its suppliers, manage its credit and bankruptcy risks, and maintain customer relationships. While we maintain significant control over the products produced for us by our licensing partners, any of the foregoing risks, or the inability of any of our licensing partners to execute on the expected design and quality of the licensed products or otherwise exercise operational and financial control over its business, may result in loss of revenue and competitive harm to our operations in the product categories where we have entered into such licensing arrangements. Further, while we believe that we could replace ~~out~~our existing licensing partners if required, our inability to do so for any period of time could materially adversely affect our revenues and harm our business.

As part of our long-term strategy, we look for opportunities to cost effectively enhance capability of business services. While we believe we conduct appropriate due diligence before entering into agreements with these third parties, the failure of any of these third parties to provide the expected services, provide them on a timely basis or to provide them at the prices we expect could disrupt or harm our business. Any significant interruption in the operations of these service providers, over which we have no control, could also have an adverse effect on our business. Furthermore, we may be unable to provide these services or implement substitute arrangements on a timely and cost-effective basis on terms favorable to us.

Because Coach products are frequently given as gifts, Coach has historically realized, and expects to continue to realize, higher sales and operating income in the second quarter of its fiscal year, which includes the holiday months of November and December. Poor sales in Coach’s second fiscal quarter would have a material adverse effect on its full year operating results and result in higher inventories. In addition, fluctuations in sales and operating income in any fiscal quarter are affected by the timing of seasonal wholesale shipments and other events affecting retail sales.

The dividend program requires the use of a ~~modest~~moderate portion of our cash flow. Our ability to pay dividends will depend on our ability to generate sufficient cash flows from operations in the future. This ability may be subject to certain economic, financial, competitive and other factors that are beyond our control. Our Board of Directors (“Board”) may, at its discretion, decrease the intended level of dividends or entirely discontinue the payment of dividends at any time. Any failure to pay dividends after we have announced our intention to do so may negatively impact our reputation, investor confidence in us and negatively impact our stock price.

We have maintained and accessed revolving credit facilities and issued debt securities as a source of liquidity, along with cash flows generated from our operations, our available cash and cash equivalents and short-term investments, our non-current investments, and other available financing options. We remain committed to maintaining a strong financial profile with ample liquidity. Our ability to access the credit and capital markets in the future as a source of funding, and the borrowing costs associated with such financing, is dependent upon market conditions and our credit rating and outlook.

We are subject to income taxes in many ~~U.S. and foreign~~ jurisdictions. We record tax expense based on our estimates of taxable income and required reserves for uncertain tax positions in multiple tax jurisdictions. At any one time, ~~many~~multiple tax years are subject to audit by various taxing jurisdictions. The results of these audits and negotiations with taxing authorities may result in a settlement which differs from our original estimate. As a result, we expect that throughout the year there could be ongoing variability in our quarterly tax rates as events occur and exposures are evaluated. In addition, our effective tax rate in a given financial statement period may be materially impacted by changes in the mix and level of earnings. Further, proposed tax changes that may be enacted in the future could negatively impact our current or future tax structure and effective tax rates.

Coach’s charter, bylaws and Maryland law contain provisions that could make it more difficult for a third party to acquire Coach without the consent of Coach’s Board. Coach’s charter permits its Board, without stockholder approval, to amend the charter to increase or decrease the aggregate number of shares of stock or the number of shares of stock of any class or series that Coach has the authority to issue. In addition, Coach’s Board may classify or reclassify any unissued shares of common stock or preferred stock and may set the preferences, rights and other terms of the classified or reclassified shares. Although Coach’s Board has no intention to do so at the present time, it could establish a series of preferred stock that could have the effect of delaying, deferring or preventing a transaction or a change in control that might involve a premium price for Coach’s common stock or otherwise be in the best interest of Coach’s stockholders.

Coach’s bylaws can only be amended by Coach’s Board. Coach’s bylaws also provide that nominations of persons for election to Coach’s Board and the proposal of business to be considered at a stockholders meeting may be made only in the notice of the meeting, by Coach’s Board or by a stockholder who is entitled to vote at the meeting and has complied with the advance notice procedures of Coach’s bylaws. Also, under Maryland law, business combinations, including issuances of equity securities, between Coach and any person who beneficially owns 10% or more of Coach’s common stock or an affiliate of such person are prohibited for a five-year period, beginning on the date such person last becomes a 10% stockholder, unless exempted in accordance with the statute. After this period, a combination of this type must be approved by two super-majority stockholder votes, unless some conditions are met or the business combination is exempted by Coach’s Board.

The Company has entered into various agreements relating to the development of the Company’s new global corporate headquarters in a new office building to be located at the Hudson Yards development site in New York City. The financing, development and construction of the new building is taking place through a joint venture between the Company and the developers. Construction of the new building has commenced and occupancy in the new global headquarters is currently expected to take place in ~~calendar 2015.~~fiscal 2016. During fiscal ~~2013,~~2015, the Company invested ~~$93.9~~$139.1 million in the Hudson Yards joint ~~venture.~~venture, resulting in a total equity method investment of 320.2 million as of June 27, 2015. The Company expects to invest approximately ~~$440~~$210 million in the joint venture over the next ~~three~~two years, with approximately ~~$130 million to $160~~$195 million estimated in fiscal ~~2014,~~2016, depending on construction progress. Outside of the joint venture, the Company is directly investing in aspects of the new corporate headquarters. InThe Company has incurred $34.0 million of capital expenditures to date, including $5.9 million in fiscal ~~2013, $24.8 million was included in capital expenditures~~2015, and we expect ~~$190~~approximately $185 million of additional expenditures over the remaining period of construction. The Company’s allocable share of the joint venture investments and capital expenditures will be financed by the Company with cash on hand, debt-related borrowings ~~under its credit facility~~ and approximately $130 million of proceeds from the sale of its current headquarters buildings.

Due to the inherent difficulty in estimating costs associated with projects of this scale and nature, ~~together with the fact that we are in the early stages of construction of the project,~~ certain of the costs associated with this project may be higher than estimated and it may take longer than expected to complete

The ownership of real property, such as the new global corporate headquarters, also subjects us to various other risks, including, among others:

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~~the possibility of environmental contamination and the costs associated with correcting any environmental problems;~~

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the risk of financial loss in excess of amounts covered by insurance, or uninsured risks, such as the loss caused by damage to the new building as a result of fire, floods, or other natural disasters; and

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~~adverse changes in the value of these properties, due to interest rate changes, changes in the neighborhood in which the property is located, or other factors.~~

The Company's charter, bylaws and Maryland law contain provisions that could make it more difficult for a third party to acquire the Company without the consent of our Board. The Company's charter permits its Board, without stockholder approval, to amend the charter to increase or decrease the aggregate number of shares of stock or the number of shares of stock of any class or series that the Company has the authority to issue. In addition, the Company's Board may classify or reclassify any unissued shares of common stock or preferred stock and may set the preferences, rights and other terms of the classified or reclassified shares. Although the Company's Board has no intention to do so at the present time, it could establish a series of preferred stock that could have the effect of delaying, deferring or preventing a transaction or a change in control that might involve a premium price for the Company's common stock or otherwise be in the best interest of the Company's stockholders.

The Company's bylaws can only be amended by our Board. The Company's bylaws also provide that nominations of persons for election to the Company's Board and the proposal of business to be considered at a stockholders meeting may be made only in the notice of the meeting, by the Company's Board or by a stockholder who is entitled to vote at the meeting and has complied with the advance notice procedures of the Company's bylaws. Also, under Maryland law, business combinations, including issuances of equity securities, between the Company and any person who beneficially owns 10% or more of the Company's common stock or an affiliate of such person are prohibited for a five-year period, beginning on the date such person last becomes a 10% stockholder, unless exempted in accordance with the statute. After this period, a combination of this type must be approved by two super-majority stockholder votes, unless some conditions are met or the business combination is exempted by the Company's Board.

We cannot assure you that an active trading market for the HDRs on the Hong Kong Stock Exchange ~~can~~will develop or be sustained. If an active trading market of the HDRs on the Hong Kong Stock Exchange does not develop or is not sustained, the market price and liquidity of the HDRs could be materially and adversely affected. As a result, the market price for HDRs in Hong Kong might not be indicative of the trading prices of Coach’s ~~Common Stock~~common stock on the NYSE, even allowing for currency differences.

The NYSE and the Hong Kong Stock Exchange have different trading hours, trading characteristics (including trading volume and liquidity), trading and listing rules, and investor bases (including different levels of retail and institutional participation). As a result of these differences, the trading prices of ~~Common Stock~~common stock and the HDRs representing them might not be the same, even allowing for currency differences. Fluctuations in the price of our ~~Common Stock~~common stock due to circumstances ~~peculiar~~particular to the U.S. capital markets could materially and adversely affect the price of the HDRs. Because of the different characteristics of the U.S. and Hong Kong equity markets, the historic market prices of our ~~Common Stock~~common stock may not be indicative of the performance of the HDRs.

We are a corporation incorporated in the State of Maryland in the United States and our HDRs are listed on the Hong Kong Stock Exchange. Our corporate governance practices are primarily governed by and subject to U.S. federal and Maryland laws and regulations. U.S. federal and Maryland laws and regulations differ in a number of respects from comparable laws and regulations in Hong Kong. There are certain differences between the stockholder protection regimes in Maryland and the United States and in Hong Kong.

We have obtained a ruling from the Securities and Futures Commission of Hong Kong (the “SFC”) that we will not be regarded as a public Company in Hong Kong for the purposes of the Code on Takeovers and Mergers and the Share Repurchases Code of Hong Kong and hence, these codes will not apply to us. We have also obtained a partial exemption from the SFC in respect of the disclosure of interest provisions set out in the Securities and Futures Ordinance of Hong Kong. In addition, we have been granted waivers or exemptions by the Hong Kong Stock Exchange from certain requirements under its listing rules. Neither our stockholders nor

Additionally, if any of these waivers or exemptions were to be revoked in circumstances including our non-compliance with applicable undertakings for any reason, additional legal and compliance obligations might be costly and time consuming, and might result in issues of interjurisdictional compliance, which could adversely affect us and HDR holders.

As the SFC does not have extra-territorial jurisdiction on any of its powers of investigation and enforcement, it will also have to rely on the regulatory regimes of Maryland state authorities and the SEC to enforce any corporate governance breaches committed by us in the United States. Investors in the HDRs should be aware that it could be difficult to enforce any judgment obtained outside the United States against us or any of our associates.

Furthermore, prospective investors in the HDRs should be aware, among other things, that there are U.S. federal withholding and estate tax implications for HDR holders.

HDR holders do not have the rights of stockholders. They only have the contractual rights set forth for their benefit under the deposit agreement for the HDRs (the “Deposit Agreement”). Holders of HDRs are not permitted to vote at stockholders’ meetings, and they may only vote by providing instructions to the HDR Depositary. There is no guarantee that holders of HDRs will receive voting materials in time to instruct the HDR Depositary to vote and it is possible that holders of HDRs, or persons who hold their Hong Kong depositary shares through brokers, dealers or other third parties, will not have the opportunity to exercise a right to vote, although both we and the HDR Depositary will endeavor to make arrangements to ensure as far as practicable that all holders of HDRs will be able to vote. As the HDR Depositary or its nominee will be the registered owner of the ~~Common Stock~~common stock underlying their HDRs, holders of HDRs must rely on the HDR Depositary (or its nominee) to exercise rights on their behalf. In addition, holders of HDRs will also incur charges on any cash distribution made pursuant to the Deposit Agreement and on transfers of certificated HDRs.

If we decide to undertake an equity offering (that is not a rights or other offering that is extended to HDR holders), HDR holders may suffer a dilution in their indirect ownership and voting interest in the ~~Common Stock,~~common stock, as compared to their holdings in the HDRs immediately prior to such an offering.

An investment in HDRs will depend for its continuing viability on the performance of several service providers, including but not limited to the HDR Depositary, the registrar for the HDRs, the custodian and any sub-custodian appointed in respect of the underlying ~~Common Stock.~~common stock. A failure by any of those service providers to meet their contractual obligations, whether or not by culpable default, could detract from the continuing viability of the HDRs as an investment. ~~Coach~~The Company will not have direct contractual recourse against the custodian, any sub-custodian or the registrar; hence the potential for redress in circumstances of default will be limited. However, ~~Coach~~the Company and the HDR Depositary have executed a deed poll in favor of HDR holders in relation to the exercise by them of their rights as HDR holders under the Deposit Agreement against the Company or the HDR Depositary.

Our ~~Common Stock~~common stock is presently traded on the NYSE. Any HDR holder may at any time request that their HDRs be withdrawn and exchanged into ~~Common Stock~~common stock for trading on the NYSE. Upon the exchange of HDRs into ~~Common Stock,~~common stock, the relevant HDRs will be cancelled. In the event that a substantial number of HDRs are withdrawn and exchanged into Common Stock and subsequently cancelled, the liquidity of the HDRs on the Hong Kong Stock Exchange might be adversely affected.

There is no direct trading or settlement between the NYSE and the Hong Kong Stock Exchange on which the ~~Common Stock~~common stock and the HDRs are respectively traded. In addition, the time differences between Hong Kong and New York and unforeseen market circumstances or other factors may delay the exchange of HDRs into ~~Common Stock~~common stock (and vice versa). Investors will be prevented from settling or effecting the sale of their securities across the various stock exchanges during such periods of delay. In addition, there is no assurance that any exchange of HDRs into ~~Common Stock~~common stock (and vice versa) will be completed in accordance with the timelines investors might anticipate.

The value of an investment in the HDRs quoted in Hong Kong dollars and the value of dividend payments in respect of the HDRs could be affected by fluctuations in the U.S. dollar/Hong Kong dollar exchange rate. While the Hong Kong dollar is currently linked to the U.S. dollar using a specified trading band, no assurance can be given that the Hong Kong government will maintain the trading band at its current limits or at all.

None.

The following table sets forth the location, use and size of ~~Coach's~~the Company's key distribution, corporate and product development facilities as of June ~~29, 2013.~~27, 2015. The majority of the properties are leased, with the leases expiring at various times through 2028, subject to renewal options.

As of June ~~29, 2013, Coach~~27, 2015, the Company also occupied ~~351~~258 Coach retail and ~~193 factory~~204 Coach outlet leased stores located in North America, ~~191~~503 Coach-operated concession shop-in-shops within department ~~store shop-in-shops,~~stores, Coach retail ~~stores~~ and ~~factory~~outlet stores in ~~Japan, 218 Coach-operated department store shop-in-shops, retail~~our international locations, and 54 Stuart Weitzman stores ~~and factory stores in Hong Kong, Macau, mainland China, Singapore, Taiwan, Malaysia and Korea.~~globally. These leases expire at various times through ~~2025.~~2036. Coach considers these properties to be in generally good condition and believes that its facilities are adequate for its operations and provide sufficient capacity to meet its anticipated requirements.

Refer to Part II, Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations" and Note 3, "Transformation and Other Actions," for further information regarding the Transformation Plan, and its impact on future store trends.

Coach is involved in various routine legal proceedings as both plaintiff and defendant incident to the ordinary course of its business, including proceedings to protect Coach’s intellectual property rights, litigation instituted by persons alleged to have been injured upon premises within Coach’s control and litigation with present or former employees.

As part of Coach’s policing program for its intellectual property rights, from time to time, Coach files lawsuits in the U.S. and abroad alleging acts of trademark counterfeiting, trademark infringement, patent infringement, trade dress infringement, copyright infringement, unfair competition, trademark dilution and/or state or foreign law claims. At any given point in time, Coach may have a number of such actions pending. These actions often result in seizure of counterfeit merchandise and/or out of court settlements with defendants. From time to time, defendants will raise, either as affirmative defenses or as counterclaims, the invalidity or unenforceability of certain of Coach’s intellectual properties.

Although Coach’s litigation with present or former employees is routine and incidental to the conduct of Coach’s business, as well as for any business employing significant numbers of employees, such litigation can result in large monetary awards when a civil jury is allowed to determine compensatory and/or punitive

Coach believes that the outcome of all pending legal proceedings in the aggregate will not have a material effect on Coach’s business or consolidated financial statements.

Coach has not entered into any transactions that have been identified by the IRS as abusive or that have a significant tax avoidance purpose. Accordingly, we have not been required to pay a penalty to the IRS for failing to make disclosures required with respect to certain transactions that have been identified by the IRS as abusive or that have a significant tax avoidance purpose.

Coach’s common stock is listed on the New York Stock Exchange and is traded under the symbol “COH.” Coach’s Hong Kong Depositary Receipts have been listed on the Hong Kong Stock Exchange since December 2011 and the issuance from time-to-time of these Hong Kong Depositary Receipts has not been registered under the Securities Act, or with any securities regulatory authority of any state or other jurisdiction of the United States and is being made pursuant to Regulation S of the Securities Act. Accordingly, they may not be re-offered, resold, pledged or otherwise transferred in the United States or to, or for the account of, a “U.S. person” (within the meaning of Regulation S promulgated under the Securities Act), unless the securities are registered under the Securities Act or pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act, and hedging transactions involving the Hong Kong Depositary Receipts may not be conducted unless in compliance with the Securities Act. No additional common stock was issued, nor capital raised through this listing.

The following table sets forth, for the fiscal periods indicated, the high, low and closing prices per share of Coach’s common stock as reported on the New York Stock Exchange Composite Index.

As of ~~August 2, 2013,~~July 31, 2015, there were ~~4,930~~3,809 holders of record of Coach’s common stock.

Any future determination to pay cash dividends will be at the discretion of Coach’s Board and will be dependent upon Coach’s financial condition, operating results, capital requirements and such other factors as the Board deems relevant.

The information under the principal heading “Securities Authorized For Issuance Under Equity Compensation Plans” in the Company’s definitive Proxy Statement for the Annual Meeting of Stockholders to be held on November ~~7, 2013,~~4, 2015, to be filed with the Securities and Exchange Commission (The “Proxy Statement”), is incorporated herein by reference.

The following graph compares the cumulative total stockholder return (assuming reinvestment of dividends) of ~~Coach’s~~the Company's common stock with the cumulative total return of the S&P 500 Stock Index and the ~~“peer~~“former peer set” and "revised peer set" companies listed below over the five-fiscal-year period ending June ~~28, 2013,~~27, 2015, the last trading day of Coach’s most recent fiscal year.

~~The Gap, Inc.,~~

~~Guess?, Inc.,~~

Coach management selected the “revised peer set” on an industry/line-of-business basis and believes this updated set of companies represent good faith comparables based on their history, size, and business models in relation to Coach, Inc.

The ~~Company’s share repurchases~~Company did not repurchase any shares during the fourth quarter of fiscal ~~2013 were~~2015. The existing plan, publicly announced on October 23, 2012, expired in June 2015 with zero remaining availability as ~~follows:~~

Period Total Number
of Shares Purchased Average Price
Paid per
Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs⁽¹⁾ Approximate Dollar Value of Shares that May Yet be Purchased Under the Plans or Programs⁽¹⁾
(in thousands, except per share data)
Period 10 (3/31/13 – 5/4/13) — $ — — $ 1,361,627
Period 11 (5/5/13 – 6/1/13) — — — 1,361,627
Period 12 (6/2/13 – 6/29/13) — — — 1,361,627
Total — —

~~(1)~~

~~The Company repurchases its common shares under repurchase programs that were approved by the Board as follows:~~


~~Date Share Repurchase Programs were~~ ~~Publicly Announced~~	~~Total Dollar Amount Approved~~		~~Expiration Date of Plan~~
~~October 23, 2012~~	$	~~1.5 billion~~		~~June 2015~~

of June 27, 2015.

The following discussion of Coach’s financial condition and results of operations should be read together with Coach’s consolidated financial statements and notes to those statements, included elsewhere in this document. When used herein, the terms ~~“Coach,~~“Company,” ~~“Company,”~~"Coach," “we,” “us” and “our” refer to Coach, Inc., including consolidated subsidiaries.

Coach, Inc. is a leading ~~American~~New York design house of modern luxury ~~accessories. Our product offerings include fine~~ accessories and ~~gifts for women~~lifestyle brands. The Coach brand was established in New York City in 1941, and ~~men, including handbags, men’s bags, women’s~~has a rich heritage of pairing exceptional leathers and ~~men’s small leather goods, footwear, outerwear, watches, weekend and travel accessories, scarves, sunwear, fragrance, jewelry and related accessories. We are in the process of transforming~~ materials with innovative design.

Coach, from an international accessories business to a global lifestyle brand, anchored in accessories. We plan to accomplish this strategy by building upon our strong management and design teams and enhancing and building out the Coach experience through expanded and new product categories, notably footwear and outerwear, enhanced retail environments and integrated marketing communications.

~~Coach~~Inc. operates in ~~two~~three segments: North America, International and ~~International.~~Other (which includes the Stuart Weitzman brand acquired by the Company in the fourth quarter of fiscal 2015). The North America segment includes sales to North American ~~consumers~~customers through Coach-operated stores (including ~~Internet sales)~~the Internet) and sales to North American wholesale ~~customers and distributors.~~customers. The International segment includes sales to ~~consumers~~customers through Coach-operated stores (including the Internet) and concession shop-in-shops in Japan and mainland China, ~~(including Internet sales),~~Coach-operated stores and concession shop-in-shops in Hong Kong, ~~and~~ Macau, Singapore, Taiwan, Malaysia, South Korea, the United Kingdom, France, Ireland, Spain, Portugal, Germany, Italy, Belgium and the Netherlands, as well as sales to wholesale customers and distributors in 25approximately 45 countries. Other, consists of sales and expenses generated by the Coach brand in other ancillary channels, including licensing and disposition. Other also consists of sales and expenses generated by the Stuart Weitzman brand during the final two months of fiscal 2015. As ~~Coach’s~~the Company's business model is based on multi-channel global distribution, our success does not depend solely on the performance of a single channel or geographic area.

In order to ~~sustain~~drive growth within our global business, we ~~focus on three key growth strategies: transformation to a lifestyle brand, increased global distribution and improved store sales productivity. To that end we~~ are focused on four key ~~initiatives:~~

initiatives, which directly align with the Coach brand Transformation Plan, described below:

During the fourth quarter of fiscal 2014, Coach, Inc. announced a multi-year strategic plan with the objective of transforming the Coach brand and reinvigorating growth, which we believe will enable the Company to return to ‘best-in-class’ profitability. This multi-faceted, multi-year transformation plan (the "Transformation Plan") builds on the core brand equities of quality and craftsmanship with the aim of evolving our competitive value proposition. We believe our strategy offers significant growth opportunities in handbags and accessories, as well as in the ~~growth strategies described above will allow us~~broader set of lifestyle categories that we have operated in for some time but are less developed, including footwear and ready-to-wear. This strategy has required an integrated holistic approach, across product, stores and marketing and promotional activities, and entails the roll-out of carefully crafted aspirational marketing campaigns to define the Coach brand and to deliver ~~long-term superior returns on~~a fuller and more consistent brand expression.

Key operational and cost measures of the Transformation Plan include: (i) the investment in capital improvements in our ~~investments~~stores and wholesale locations to drive comparable sales improvement; (ii) the optimization and streamlining of our organizational model as well as the closure of underperforming stores in North America, and select International stores; (iii) the realignment of inventory levels and mix to reflect our elevated product strategy and consumer preferences; (iv) the investment of approximately $50 million in incremental advertising costs to elevate consumer perception of our Coach brand, drives sales growth and promote our new strategy, which started in fiscal 2015; and (v) the significant scale-back of our promotional cadence in an increased ~~cash flows from operating activities. However, intensified competition, the~~global promotional environment, ~~along with~~particularly within our outlet Internet sales site, which began in fiscal 2014. The Company's execution of these key operational and cost measures were on plan through the ~~current macroeconomic environment, has created a challenging retail market. The Company believes strong~~end of fiscal 2015, and we believe that long-term

Furthermore, as discussed in Note 7, "Acquisitions," the Company acquired luxury designer footwear brand Stuart Weitzman, which we believe will complement our current leadership position in premium handbags and accessories, while immediately adding to the Company's earnings as we continue to make meaningful progress towards our brand transformation. The acquisition was consummated on May 4, 2015, and the brand contributed $43.0 million in net sales in fiscal 2015, included within our Other segment.

In fiscal 2015, Coach, Inc. reported net sales of $4.19 billion (including $43.0 million attributable to the Stuart Weitzman brand), net income of $402.4 million and net income per diluted share of $1.45. This compares to net sales of $4.81 billion, net income of $781.3 million, and net income per diluted share of $2.79 in fiscal 2014.

In fiscal 2015, the comparability of our operating results has been affected by $145.9 million of pretax charges ($107.8 million after tax, or $0.39 per diluted share) related to our Transformation Plan, $24.6 million of pretax charges ($21.0 million after tax, or $0.08 per diluted share) related to acquisition charges associated with the Stuart Weitzman brand. These fiscal 2015 actions taken together increased the Company's selling, general and administrative ("SG&A") expenses by $160.8 million and cost of sales by $9.7 million, negatively impacting net income by $128.8 million, or $0.47 per diluted share.

In fiscal 2014, the comparability of our operating results was affected by $131.5 million of pretax charges ($88.3 million after tax or $0.31 per diluted share) related to our Transformation Plan. These fiscal 2014 actions increased the Company's SG&A expenses by $49.3 million and cost of sales by $82.2 million, negatively impacting net income by $88.3 million, or $0.31 per diluted share.

Our operating performance for fiscal ~~2013 were:~~

~~Net~~2015 reflected a decline in net sales ~~increased 6.6%~~of 12.8%, primarily due to ~~$5.08 billion.~~

our North America business partially offset by a $43.0 million contribution from the Stuart Weitzman brand. Excluding the effects of foreign currency, net sales ~~rose 4.9%~~decreased 10.6%. Our gross profit decreased by 11.8% to ~~$3.48~~$2.91 billion during fiscal 2015 which included the negative impact of charges under our Transformation Plan of $5.0 million and Stuart Weitzman purchase accounting related items of $4.7 million. Excluding our Transformation Plan and acquisition-related charges in fiscal 2015 and fiscal 2014, gross profit decreased by 13.6%, to $2.92 billion.

º

~~Comparable store sales increased by 0.3% versus prior year.~~

º

Coach closed three net retail stores and opened 24 new factory stores including 10 Men’s, bringing the total number of retail and factory stores to 351 and 193, respectively, at the end of fiscal 2013.

~~International sales rose 9.9%~~ SG&A expenses increased by 5.2% to ~~$1.54~~$2.29 billion ~~reflecting new~~during fiscal 2015. Excluding charges under our Transformation Plan and ~~expanded stores.~~

º

Coach opened 30 net locations in China and 11 net locations in Japan. As of the end of fiscal 2013, the Company operated 191 locations in Japan, 126 in China, 48 in Korea, 27 in Taiwan, 10 in Malaysia, and seven in Singapore.

º

International benefited from the results of the Company-operated Korea (47 retail and department stores) and Malaysia (10 retail stores) businesses acquired during the first quarter of fiscal 2013, and the Taiwan (26 retail and department stores) business, acquired during the third quarter of fiscal 2012.

~~Operating income increased 0.8% to $1.52 billion.~~acquisition-related charges in fiscal 2015 and fiscal 2014, SG&A expenses remained fairly consistent.

Net income decreased ~~0.4%~~in fiscal 2015 as compared to ~~$1.03 billion.~~

~~Earnings~~fiscal 2014, due to a decrease in operating income of $502.1 million, partially offset by a $131.8 million decrease in our provision for income taxes. Net income per diluted share ~~increased 2.3%~~decreased primarily due to ~~$3.61.~~

~~Coach’s Board increased the Company’s cash dividend by 12.5% to an expected annual rate of $1.35 per share starting with the dividend paid on July 1, 2013.~~

~~On a Non-GAAP basis, the key metrics for~~lower net income. Excluding charges under our Transformation Plan and acquisition-related charges in fiscal ~~2013 were:~~

~~Operating~~2015 and charges under our Transformation Plan in fiscal 2014, net income ~~increased 1.7% to $1.58 billion.~~

~~Net~~and net income ~~increased 2.7% to $1.07 billion.~~

~~Earnings~~ per diluted share ~~increased 5.5% to $3.73.~~decreased 38.9% and 38.2%, respectively.

The Company’s reported results are presented in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The reported gross profit, ~~selling, general and administrative~~SG&A expenses, operating income, income before provision for income taxes, provision for income taxes, net income and earnings per diluted share in fiscal ~~2013~~2015 and ~~2012~~2014 reflect certain items which

In fiscal 2015, the Company incurred charges as follows:

These fiscal 2015 actions taken together increased the Company's SG&A expenses by $160.8 million and cost of sales by $9.7 million, negatively impacting net income by $128.8 million, or $0.47 per diluted share. Refer to the "Executive Overview" herein and Note 3, "Transformation and Other Actions," for further information regarding the Transformation Plan.

Additional actions under our Transformation Plan will continue into fiscal 2016, with expected incremental charges of around $50 million.

In fiscal 2014, the Company incurred restructuring and transformation related charges of $131.5 million under its Transformation Plan as announced in the fourth quarter of fiscal 2014. The charges recorded in cost of sales and SG&A expenses were $82.2 million and $49.3 million, respectively. These charges, which were primarily associated with our North America business, relate to inventory and fleet related costs, including impairment, accelerated depreciation and severance related to store closures.

The change in net sales in fiscal 2015 has been presented both including and excluding currency fluctuation effects (primarily attributable to Coach Japan).

Net sales decreased 12.8% or $614.6 million to $4.19 billion in fiscal 2015. Excluding the effects of foreign currency, net sales decreased 10.6% or $511.3 million. This decrease was driven by lower sales in the North America business partially offset by gains in the International business, and a $43.0 million contribution due to the acquisition of Stuart Weitzman. The following table presents net sales by reportable segment for fiscal 2015 compared to fiscal 2014:

Comparable store sales measure sales performance at stores that have been open for at least 12 months, and includes sales from the Internet. Coach excludes new locations from the comparable store base for the first twelve months of operation. Comparable store sales have not been adjusted for store expansions.

North America Net Sales decreased 20.4% or $633.0 million to $2.47 billion in fiscal 2015. Excluding the unfavorable impact of foreign currency due to the Canadian dollar, net sales decreased $622.5 million or 20.1%. This decrease was primarily driven by lower comparable store sales of $613.4 million or 22%, due to lower traffic as a result of a decrease in promotional activity, partially offset by higher transaction size. The Internet business had a negative impact of approximately 740 basis points on comparable store sales which is attributable to the Company's decision to both limit access and reduce the promotional cadence on our outlet Internet sales site. North America sales were also negatively impacted by lower wholesale sales of approximately $53.9 million due to lower shipments. These decreases were partially offset by a net increase of $32.4 million related to net sales generated by new store openings which were partially offset by the absence of net sales for those stores that have closed since fiscal 2014. Since the end of fiscal 2014, Coach closed a net 74 retail stores and a net three outlet stores, including the closure of 11 Men’s outlet stores.

International Net Sales decreased 1.3% or $22.2 million to $1.62 billion in fiscal 2015. Excluding the unfavorable impact of foreign currency, primarily due to the Japanese yen, net sales increased $70.8 million or 4.3%. This increase was primarily due to growth in Greater China (which includes Hong Kong and Macau) reflecting an increase of $50.5 million primarily due to net new stores and positive comparable store sales, an increase of $36.7 million related to net new store openings and positive comparable store sales of our business in Europe and an increase of $15.7 million in our international wholesale business partially due to higher shipments. These increases were partially offset by a decrease in net sales in Japan of $37.4 million due to lower traffic as a result of lapping the pull forward in demand in advance of the April 2014 consumption tax increase. Since the end of fiscal 2014, we opened 28 net new stores, with 16 net new stores in mainland China, Hong Kong and Macau and Japan, and 12 net new stores in the other regions.

Other Net Sales increased 66.0% or $40.6 million to $102.1 million, primarily due to the impact of the Stuart Weitzman acquisition.

Gross profit decreased 11.8% or $388.4 million to $2.91 billion in fiscal 2015 from $3.30 billion in fiscal 2014. Gross margin for fiscal 2015 was 69.4% as compared to 68.6% in fiscal 2014. Excluding items affecting comparability of $9.7 million in fiscal 2015 and $82.2 million in fiscal 2014, gross profit decreased 13.6% or $460.9 million to $2.92 billion from $3.38 billion in fiscal 2014, and gross margin was 69.6% in fiscal 2015 as compared to 70.3% in fiscal 2014. Excluding items affecting comparability, the gross margin decreased 70 basis points, as described below.

North America Gross Profitdecreased 21.0% or $418.1 million to $1.57 billion in fiscal 2015. Gross margin decreased 50 basis points from 64.3% in fiscal 2014 to 63.8% in fiscal 2015. The decrease in gross margin is primarily attributable to the impact of decreased promotional activity on an elevated product assortment. Specifically, the impact of a higher mix of elevated product sales primarily in our outlet stores, which contained higher average unit costs, negatively impacted gross margin by 120 basis points. This decrease was mostly offset by lower promotional activity, mainly as a result of the scale-back of promotional events within our outlet channel which favorably impacted gross margin by 90 basis points.

International Gross Profit decreased 3.6% or $46.5 million to $1.25 billion in fiscal 2015. Gross margin decreased 180 basis points from 78.8% in fiscal 2014 to 77.0% in fiscal 2015. The decrease in gross margin is primarily due to a less favorable geographic mix of our sales and unfavorable effects of foreign currency, which in aggregate negatively impacted gross margin by 110 basis points, particularly as a result of a decline in net sales in Japan, coupled with the growth of our international wholesale business, as well as the impact of stronger elevated product sales which carry higher average unit costs, negatively impacting gross margin by 60 basis points and to a lesser extent increased promotional activity.

Other Gross Profit increased 57.2% or $21.1 million to $58.0 million in fiscal 2015. This increase is substantially attributable to the acquisition of the Stuart Weitzman brand during the fourth quarter of fiscal 2015.

Corporate Unallocated Gross Profit increased $55.1 million from a loss of $27.9 million in fiscal 2014 to a profit of $27.2 million in fiscal 2015. Excluding items affecting comparability of $9.7 million in fiscal 2015 and $82.2 million in fiscal 2014, corporate unallocated gross profit decreased by $17.4 million from $54.3 million in fiscal 2014 to $36.9 million in fiscal 2015, primarily due to increased inventory reserves and less favorable production variances.

SG&A expenses are comprised of four categories: (i) selling; (ii) advertising, marketing and design; (iii) distribution and customer service; and (iv) administrative. Selling expenses include store employee compensation, occupancy costs and supply costs, wholesale and retail account administration compensation globally and international operating expenses. These expenses are affected by the number of Company-operated stores open during any fiscal period and store performance, as compensation and rent expenses vary with sales. Advertising, marketing and design expenses include employee compensation, media space and production, advertising agency fees, new product design costs, public relations and market research expenses. Distribution and customer service expenses include warehousing, order fulfillment, shipping and handling, customer service, employee compensation and bag repair costs. Administrative expenses include compensation costs for “corporate” functions including: executive, finance, human resources, legal and information systems departments, as well as corporate headquarters occupancy costs, consulting fees and software expenses. Administrative expenses also include global equity compensation expense.

The Company includes inbound product-related transportation costs from our service providers within cost of sales. The Company, similar to some companies, includes certain transportation-related costs related to our distribution network in selling, general and administrative expenses rather than in cost of sales; for this reason, our gross margins may not be comparable to that of entities that include all costs related to their distribution network in cost of sales.

SG&A expenses increased 5.2% or $113.7 million to $2.29 billion in fiscal 2015 as compared to $2.18 billion in fiscal 2014. As a percentage of net sales, SG&A expenses increased to 54.6% during fiscal 2015 as compared to 45.3% during fiscal 2014. Excluding items affecting comparability of $160.8 million in fiscal 2015 and $49.3 million in fiscal 2014, SG&A expenses increased $2.2 million from fiscal 2014; and SG&A expenses as a percentage of net sales increased, due to deleveraging as net sales have declined, to 50.8% in fiscal 2015 from 44.3% in fiscal 2014.

Selling expenses were $1.53 billion, or 36.6% of net sales, in fiscal 2015 compared to $1.55 billion, or 32.2% of net sales, in fiscal 2014. The $16.5 million decrease represents slightly lower selling expenses related to our North America stores and Internet business, which were partially offset by increases to support growth in our International business (primarily in Europe and Greater China) as well as incremental Stuart Weitzman selling expenses. Excluding items affecting comparability of $4.1 million in fiscal 2015, selling expenses were 36.5% of net sales.

Advertising, marketing, and design costs were $246.8 million, or 5.9% of net sales, in fiscal 2015, compared to $242.3 million, or 5.0% of net sales, during fiscal 2014. The increase was the result of higher costs for marketing-related events which increased by $28.8 million as compared to fiscal 2014, partially offset by fewer promotional events made by the Company, primarily as a result of the Company's decision to limit access to our outlet Internet sales site.

Distribution and consumer service expenses were $69.6 million, or 1.7% of net sales, in fiscal 2015, compared to fiscal 2014 expenses of $87.2 million, or 1.8% of net sales. The decrease was primarily due to lower variable costs as a result of lower sales associated with the Company's decision to limit access to our outlet Internet sales site.

Administrative expenses were $441.5 million, or 10.5% of net sales, in fiscal 2015 compared to $300.5 million, or 6.3% of net sales, during fiscal 2014. Excluding items affecting comparability of $156.7 million in fiscal 2015 and $49.3 million in fiscal 2014, administrative expenses were $284.8 million, or 6.8% of net sales, in fiscal 2015 and $251.2 million, or 5.2% of net sales, in fiscal 2014. The increase is primarily due to higher incentive compensation costs and additional costs incurred particularly related to information technology.

Operating income decreased 44.8% or $502.1 million to $618.0 million during fiscal 2015 as compared to $1.12 billion in fiscal 2014. Operating margin decreased to 14.7% as compared to 23.3% in fiscal 2014. Excluding items affecting comparability of $170.5 million in fiscal 2015 and $131.5 million in fiscal 2014, operating income decreased 37.0% or $463.1 million to $788.5 million from $1.25 billion in fiscal 2014; and operating margin was 18.8%, in fiscal 2015 as compared to 26.0% in fiscal 2014.

The following table presents operating income by reportable segment for fiscal 2015 compared to fiscal 2014:

North America Operating Incomedecreased 29.5% or $343.6 million to $820.5 million in fiscal 2015 reflecting the decrease in gross profit of $418.1 million which was partially offset by lower SG&A expenses of $74.5 million. The decrease in SG&A expenses was due to lower variable selling costs as a result of lower sales in our stores and Internet business. Operating margin decreased 420 basis points to 33.3% in fiscal 2015 from 37.5% during the same period in the prior year due to higher SG&A expense as a percentage of net sales of 390 basis points, primarily due to deleveraging of selling expenses as net sales have declined, and lower gross margin of 50 basis points.

International Operating Incomedecreased 13.5% or $75.1 million to $480.6 million in fiscal 2015, primarily reflecting a decrease in gross profit of $46.5 million as well as higher SG&A expenses of $28.6 million. The increase in SG&A expenses is related to a $30.8 million increase in Greater China and Asia, excluding Japan, related to new store openings and a $24.9 million increase in Europe to support growth in the business. The increase in SG&A costs were partially offset by foreign currency effects in Japan of $32.2 million. Operating margin decreased 420 basis points to 29.6% in fiscal 2015 from 33.8% during the same period in the prior year primarily due to higher overall SG&A as a percentage of net sales which increased by 240 basis points and lower gross margin of 180 basis points.

Corporate Unallocated Operating Expense increased $74.7 million to $708.6 million in fiscal 2015, an increase of 11.8%. This increase was primarily attributable to higher charges incurred by the Company in fiscal 2015 as part of its Transformation Plan. Excluding items affecting comparability, unallocated operating expenses increased by 8.9% or $44.6 million to $547.0 million from $502.4 million. This increase is primarily due to higher incentive compensation costs and additional costs incurred particularly related to information technology.

The effective tax rate was 34.2% in fiscal 2015, as compared to 30.4% in fiscal 2014. Excluding the items affecting comparability, the effective tax rate was 32.1% in fiscal 2015, as compared to 30.6% in fiscal 2014. The increase in our effective tax rate was primarily attributable to the loss of certain foreign tax benefits that expired at the end of fiscal 2014, as well as the acquisition-related impact attributable to Stuart Weitzman. We expect our rate to be lower in fiscal 2016 primarily attributable to the geographic mix of earnings, the expiration of certain statutes, the settlement of audits and the ongoing benefit of available foreign tax credits.

Net income decreased 48.5% or $378.9 million to $402.4 million in fiscal 2015 as compared to $781.3 million in fiscal 2014. Excluding items of comparability, net income decreased 38.9% or $338.4 million to $531.2 million in fiscal 2015 from $869.6 million in fiscal 2014. This decrease was primarily due to lower operating income partially offset by lower provision for income taxes.

The Company’s reported results are presented in accordance with GAAP. The reported gross profit, SG&A expenses, operating income, income before provision for income taxes, provision for income taxes, net income and earnings per diluted share in fiscal 2014 and 2013 reflect certain items which affect the comparability of our results, as noted in the following reconciliation tables. Refer to page 3941 for a discussion on the Non-GAAP Measures.

In fiscal 2013, the Company incurred restructuring and transformation related charges of $53.2 million. The charges recorded in selling, general and administrative expenses and cost of sales were $48.4 million and $4.8 million, respectively. The charges include the strategic reassessment of the Reed Krakoff business, streamlining our organizational model and reassessing the fleet of our retail stores and inventories.

~~Additional actions are expected to continue into the first quarter of fiscal 2014, primarily related to the Reed Krakoff business.~~

During fiscal 2012, the Company decreased the provision for income taxes by $23.9 million, primarily as a result of recording the effect of a revaluation of certain deferred tax asset balances due to a change in

The ~~percentage increase~~change in net sales in fiscal ~~2013 for Coach Japan have~~2014 has been presented both including and excluding currency fluctuation effects ~~from translating these foreign-denominated amounts into U.S. dollars and comparing these figures~~(primarily attributable to Coach Japan).

Net sales decreased 5.3% or $269.2 million to $4.81 billion in fiscal 2014. Excluding the ~~same periods~~effects of foreign currency, net sales decreased 3.1% or $155.9 million. The decrease was driven by lower sales in the ~~prior fiscal year.~~

~~We believe that presenting Coach Japan sales increases, including and excluding currency fluctuation effects, will help investors and analysts to understand~~North America business partially offset by gains in the ~~effect on these valuable performance measures of significant year-over-year currency fluctuations.~~

International business. The following table presents net sales by reportable segment for fiscal ~~2013~~2014 compared to fiscal ~~2012:~~

2013:

Comparable store sales measure sales performance at stores that have been open for at least 12 months, and includes sales from the Internet. Coach excludes new locations from the comparable store base for the first ~~year~~twelve months of operation. ~~Similarly, stores that are expanded by 15% or more are also excluded from the comparable store base until the first anniversary of their reopening. Beginning in fiscal 2014, comparable~~Comparable store sales ~~will~~have not bebeen adjusted for store expansions given our planned ~~transformation related~~capital investments in connection with the Transformation Plan.

North America Net Sales decreased 10.9% or $377.7 million to ~~capital investments.~~

~~Net sales increased 4.9% to $3.48~~$3.10 billion ~~during~~in fiscal ~~2013 from $3.32 billion during fiscal 2012,~~2014. This decrease was primarily driven by ~~sales from new and expanded stores and a 0.3% increase in~~lower comparable store sales of $460.5 million or 15% largely due to lower traffic, and lower wholesale sales of $26.1 million due to lower shipments. The Internet business had a negative impact, of over 1%, on comparable store sales which is attributable to the Company's decision to eliminate third-party Internet events and to limit access to our outlet Internet sales site. This decrease was partially offset by ~~decreased shipments into wholesale~~an increase of $143.5 million related to net new stores. ~~Significant traffic improvement~~In fiscal 2014, Coach opened a net 14 outlet stores, including one Men’s outlet store, and closed a net 19 retail stores.

International Net Sales increased 5.5% or $86.1 million to $1.64 billion in fiscal 2014. Excluding the ~~North American Internet business drove~~unfavorable impact of foreign currency, primarily due to the ~~slight~~Japanese yen, net sales increased $191.0 million or 12.3%. The increase in net sales was primarily due to double digit growth in Greater China and Asia, excluding Japan, reflecting an increase of $152.4 million due to net new stores and positive comparable store sales, ~~increase. Since~~as well as a $40.5 million increase related to the ~~end~~acquisition of the Europe joint venture in the first quarter of fiscal ~~2012, Coach opened 24 factory stores, including 10 Men’s, closed three net retail stores, and expanded six factory and one retail store in North America.~~

~~Net sales increased 9.9% to $1.54 billion during~~2014. In fiscal 2013 from $1.40 billion during fiscal 2012, primarily driven by sales from new and acquisition-related stores. Strong comparable store sales performance in Asia, led by double-digit percentage growth in China, and increased shipments to international wholesale customers, driven by expanded distribution, were substantially offset by weak sales performance in Japan and by2014, excluding the ~~negative foreign exchange~~ impact of ~~the Yen, which decreased net sales by $82.2 million. Since the end of fiscal 2012, International~~acquisitions, we opened 4239 net new stores, ~~(excluding those acquired as a result of the acquisitions),~~ with 3034 net new stores in mainland China, Hong Kong and Macau 11and Japan, and five net new stores in ~~Japan and one net new store in~~ the other regions. ~~Fiscal 2013 results include net sales~~The acquisition of the ~~Company-operated Malaysia~~European joint venture resulted in a transfer of an additional 18 stores to the Company’s direct control. After the acquisition on July 1, 2013, Coach opened seven new stores and ~~Korean businesses, which were acquired~~transitioned two stores from wholesale to direct control in ~~the first quarter of 2013 as well as the benefit of a full year of net sales~~fiscal 2014.

Gross profit decreased 10.8% or $401.1 million to $3.30 billion in fiscal 2014 from ~~Taiwan, which~~$3.70 billion in fiscal 2013. Gross margin for fiscal 2014 was ~~purchased in the third quarter of fiscal 2012.~~

North America Gross Profitdecreased 15.1% or $353.1 million to $1.99 billion ~~during~~in fiscal ~~2012.~~2014. Gross margin decreased 310 basis points from 67.4% in fiscal 2013 ~~was 72.9%~~to 64.3% in fiscal 2014. The decrease in gross margin is due to a 210 basis point decline as ~~compared~~a result of increased promotional activity, primarily in our outlet channel, and a 70 basis point decline as a result of selling products with a higher average unit cost as well as increased penetration of our broadened lifestyle categories.

International Gross Profit increased 3.2% or $40.0 million to ~~72.8% during~~$1.30 billion in fiscal ~~2012.~~2014. Gross margin decreased 180 basis points from 80.6% in fiscal 2013 to 78.8% in fiscal 2014. The decrease in gross margin is primarily due to the negative translation effect of changes in foreign currency, primarily associated with fluctuations in the Japanese Yen. Other factors negatively impacting gross margin were increased promotions, selling products with a higher average unit cost, as well as increased penetration of our

Corporate Unallocated Gross Profit decreased $92.6 million from $64.7 million in fiscal 2013 to a loss of $27.9 million in fiscal 2014. Excluding items affecting comparability of $82.2 million in fiscal 2014 and $4.8 million in fiscal 2013, gross profit ~~increased 6.8%~~decreased by $15.2 million from $69.5 million to ~~$3.70 billion, or gross margin was 73.0%,~~$54.3 million in fiscal ~~2013.~~

2014, primarily due to less favorable production variances.

SG&A expenses increased ~~11.2%~~0.2% or $3.3 million to $2.18 billion in fiscal 2014 as compared to $2.17 billion in fiscal 2013, ~~as compared to $1.95 billion in fiscal 2012,~~primarily driven by an increase in selling expenses. As a percentage of net sales, SG&A expenses increased to 45.3% during fiscal 2014 as compared to 42.8% during fiscal ~~2013 as compared to 41.0% during fiscal 2012.~~2013. Excluding items affecting comparability of $49.3 million in fiscal 2014 and $48.4 million in fiscal 2013, SG&A expenses ~~were 41.9%~~increased $2.4 million from fiscal 2013; and SG&A expenses as a percentage of net sales increased, primarily due to the increase in ~~fiscal 2013. Excluding items affecting comparability of $39.2 million in fiscal 2012, SG&A~~selling expenses ~~were 40.2%~~ as a percentage of net sales, to 44.3% in fiscal ~~2012.~~

2014 from 41.9% in fiscal 2013.

Selling expenses were $1.55 billion, or 32.2% of net sales, in fiscal 2014 compared to $1.51 billion, or 29.8% of net sales, in fiscal ~~2013 compared to $1.36 billion, or 28.5% of net sales, in fiscal 2012.~~2013. The dollar increase in selling expenses ~~was due to International stores reflecting higher sales and~~reflected increases in new store openings in our International business including the impact of acquiring our former partner Hackett’s 50% interest in our European joint venture. These expenses were mostly offset by a favorable impact of foreign currency exchange rates primarily related to Coach Japan and ~~higher~~lower expenses in North ~~American Internet expenses reflecting higher sales. International selling expenses overall increased as a percentage of sales,~~America due to the ~~acquisitions~~divestiture of the ~~Korea and Malaysia businesses and infrastructure investments to support Asia. China store expenses as a percentage of sales decreased primarily due to operating efficiencies and sales leverage.~~

Reed Krakoff business.

Advertising, marketing, and design costs were $242.3 million, or 5.0% of net sales, in fiscal 2014, compared to $265.4 million, or 5.2% of net sales, during fiscal 2013. The decrease was primarily due to the divestiture of the Reed Krakoff business. This decrease was partially offset by increased advertising, marketing, and design costs related to the Company’s transformation efforts.

Distribution and consumer service expenses of $87.2 million, or 1.8% of net sales, in fiscal 2014, were fairly consistent with fiscal 2013 expenses of $86.1 million, or 1.7% of net sales.

Administrative expenses were $300.5 million, or 6.3% of net sales, in fiscal 2014 compared to $307.1 million, or 6.1% of net sales, during fiscal 2013. Excluding items affecting comparability of $49.3 million in fiscal 2014 and $48.4 million in fiscal 2013, administrative expenses were $251.2 million, or 5.2% of net sales, in fiscal ~~2013, compared to $245.2~~2014 and $258.7 million, or 5.1% of net sales, in fiscal 2013. Lower compensation expense was mostly offset by additional costs incurred as part of investments made in the business, particularly related to increased depreciation expense.

Operating income decreased 26.5% or $404.4 million to $1.12 billion during fiscal ~~2012. The dollar increase was primarily due~~2014 as compared to creative and design expenditures and marketing expenses related to digital media and consumer communications, which includes our digital strategy through coach.com, the launch of our Legacy line, marketing sites and social networking. The Company utilizes and continues to explore implementing new technologies such as our global web presence, with informational websites in 28 countries, social networking and blogs as cost-effective consumer communication opportunities to increase online and store sales and build brand awareness.

~~Distribution and consumer service expenses were $86.1 million, or 1.7% of net sales,~~$1.52 billion in fiscal ~~2013,~~2013. Operating margin decreased to 23.3% as compared to $68.9 million, or 1.4% of net sales, in fiscal 2012. The increase in distribution and consumer service expenses is primarily the result of the change in sales mix to Internet purchases, resulting in increased packaging and shipping expense per dollar of sales.

Administrative expenses were $307.1 million, or 6.1% of net sales, in fiscal 2013 compared to $282.2 million, or 5.9% of net sales, during fiscal 2012. The dollar increase is due to the restructuring and transformation charges, increased equity compensation and systems investment to support international

The following table presents operating income by reportable segment for fiscal 2014 compared to fiscal 2013:

North America Operating Incomedecreased 20.3% or $295.9 million to $1.16 billion in fiscal 2014 reflecting the decrease in gross profit of $353.1 million which was partially offset by lower SG&A expenses ~~were $258.7 million, or 5.1%~~of $57.2 million. The decrease in SG&A expenses was related to the absence of costs in fiscal 2014 related to the divestiture of the Reed Krakoff business and lower variable selling costs as a result of lower sales. Operating margin decreased 450 basis points to 37.5% in fiscal 2014 from 42.0% during

International Operating Incomedecreased 4.6% or $26.5 million to $555.7 million primarily reflecting higher SG&A expenses of $66.5 million partially offset by higher gross profit of $40.0 million. The increase in SG&A expenses is related to a $53.7 million increase in Greater China and Asia, excluding Japan, related to higher occupancy and employee costs associated with new store openings and a $45.8 million increase as a result of the recently acquired Europe business. The increase in SG&A costs was offset by foreign currency effects in Japan of $42.6 million. Operating margin decreased 360 basis points to 33.8% in fiscal ~~2013. Excluding items affecting comparability~~2014 from 37.4% during the same period in the prior year primarily due to lower gross margin of ~~$39.2 million in fiscal 2012, administrative~~180 basis points and higher overall selling expenses ~~were $243.0 million, or 5.1%~~ as a percentage of net sales which increased by 180 basis points.

Corporate Unallocated Operating Expense increased $86.2 million to $633.9 million, an increase of 15.7%. This increase was primarily attributable to higher charges incurred by the Company in fiscal ~~2012.~~

The effective tax rate was 30.4% in fiscal 2014, as compared to 32.0% in fiscal ~~2013, as compared to~~2013. Excluding the ~~31.0%~~items affecting comparability, the effective tax rate was 30.6% and 32.2% in fiscal ~~2012.~~2014 and fiscal 2013, respectively. Both fiscal 2014 and fiscal 2013 benefited from one-time discrete items. In fiscal 2014, the Company recognized a net benefit related to refinements of its various tax accounts which were partially offset by the loss of deductions related to changes in key executives. During fiscal 2013, the Company recognized a favorable tax settlement and the benefit of certain permanent adjustments related to executive compensation. During fiscal 2012, the Company recorded the effect of a revaluation of certain deferred tax asset balances due to a change in Japan’s corporate tax laws, the favorable completion of a multi-year transfer pricing agreement with Japan and a favorable tax settlement. Excluding theThese one-time discrete items ~~affecting comparability (see page~~ 39~~), the~~favorably impacted our effective tax rate ~~was 32.2%~~by approximately 220 basis points and ~~32.8%~~40 basis points in fiscal 2014 and fiscal 2013, ~~and 2012,~~ respectively. The decline reflects the favorable tax settlement and the benefit of certain permanent adjustments related to executive compensation, as well as the Company earning a higher proportion of its profits in lower tax rate jurisdictions.

Net income decreased ~~0.4%~~24.5% or $253.1 million to $781.3 million in fiscal 2014 as compared to $1.03 billion in fiscal ~~2013 as compared to $1.04 billion in fiscal 2012.~~2013. Excluding items of comparability, net income ~~increased 2.7%~~decreased 18.5% or $197.4 million to $869.6 million in fiscal 2014 from $1.07 billion in fiscal ~~2013, reflecting a 1.9% increase in~~2013. This decrease was primarily due to lower operating income ~~before~~partially offset by lower provision for income ~~taxes and the lower effective tax rate.~~

The Company’s reported results are presented in accordance with GAAP. The reported gross profit, SG&A expenses, operating income, provision for income taxes, net income and earnings per diluted share in fiscal 2015, fiscal 2014 and fiscal 2013 reflect certain items which affect the comparability of our ~~results. Similarly,~~results, including the ~~reported SG&A expenses, operating income,~~impact of the Transformation Plan and ~~provision for income taxes in fiscal 2012 and 2011 reflect certain items which affect the comparability of our results.~~acquisition-related charges. These metrics are also reported on a non-GAAP basis ~~for these fiscal years~~ to exclude the impact of these items.

These non-GAAP performance measures were used by management to conduct and evaluate its business during its regular review of operating results for the periods affected. Management and the Company’s Board utilized these non-GAAP measures to make decisions about the uses of Company resources, analyze performance between periods, develop internal projections and measure management performance. The Company’s primary internal financial reporting excluded these items affecting comparability. In addition, the compensation committee of the Company’s Board ~~used~~will use these non-GAAP measures when setting and assessing achievement of incentive compensation goals.

Additionally, certain increases and decreases in operating results for the Company and its North America and International segment have been presented both including and excluding currency fluctuation effects from translating foreign-denominated amounts into U.S. dollars and compared to the same period in the prior fiscal year.

We believe these non-GAAP measures are useful to investors in evaluating the Company’s ongoing operating and financial results and understanding how such results compare with the Company’s historical performance. ~~In addition,~~Additionally, we believe presenting certain increases and decreases that include and exclude the effect of foreign currency fluctuations helps investors and analysts understand the effect of significant year-over-year currency fluctuations. We believe excluding the items affecting comparability assists investors in developing expectations of future performance. By providing the non-GAAP measures, as a supplement to GAAP information, we believe we are enhancing investors’ understanding of our business and our results of operations. The non-GAAP financial measures are limited in their usefulness and should be considered in addition to, and not in lieu of, U.S. GAAP financial measures. Further, these non-GAAP measures may be unique to the Company, as they may be different from non-GAAP measures used by other companies.

For a detailed discussion on these non-GAAP measures, see Item 6. "Selected Financial Data," and the Results of Operations section within Item 7. ~~Management’s~~"Management’s Discussion and ~~Analysis.~~

The Company’s cash and cash equivalents

~~The net increase in cash and cash equivalents declined $71.9~~ increased $699.9 million in fiscal ~~2013~~2015 compared to a decrease of $470.9 million in fiscal ~~2012~~2014, primarily due to purchases of investments, lower proceeds and excess tax benefits related to share based awards,our investment in the Hudson Yards joint venture in fiscal year 2013, higher dividend payments, and higher capital expenditures. These were partially offset by lower share repurchases and increasednet cash provided by ~~operations.~~

Net cash provided by operating activities ~~increased $192.3~~decreased $48.0 million primarily due to lower net income of $378.9 million from fiscal 2014 to fiscal 2015, partially offset by changes in our operating asset and liability balances of $331.4 million.

Changes in our operating asset and liability balances were primarily driven by changes in accounts payable, inventory, other balance sheet changes and accrued liabilities. Accounts payable were a ~~$121.1 million year-over-year improvement in operating assets and liabilities, lower excess tax benefit related to share-based compensation~~source of ~~$41.2~~cash of $64.4 million in fiscal ~~2013, and higher non-cash expense items of $34.5 million. The change in operating assets and liabilities benefitted~~2015, driven primarily ~~from~~by the ~~fiscal 2013 collection of an income tax refund and a year-over-year reduction in the growth~~timing of inventory purchases and ~~accounts receivable. The~~lease termination payments, as compared to a use of cash of $30.2 million in fiscal 2014. Inventory was a source of cash of $29.2 million in fiscal 2015, primarily driven by overall lower inventory ~~benefit was~~purchases in fiscal 2015, as compared to a use of cash of $64.1 million in fiscal 2014. Other balance sheet changes, net, which primarily relate to other assets, were a source of cash of $17.8 million in fiscal 2015 as compared to a use of cash of $64.2 million in fiscal 2014, primarily due to ~~lapping the significant growth~~a decrease in tax receivables and changes in deferred tax accounts. Accrued liabilities were a source of cash

Net cash used in investing activities was ~~$570.5 in fiscal 2013 compared to $259.4~~$612.9 million in fiscal ~~2012, with~~2015 compared to $707.7 million in fiscal 2014. The decrease in net cash used of $94.8 million was primarily due to the ~~increase~~impact of ~~$311.1~~net proceeds from our investment portfolio of $255.6 million ~~driven by purchases~~in fiscal 2015, compared to net cash used for purchase of investments ~~investment~~of $397.1 million in fiscal 2014, offset by an increase in net cash used of $515.8 million in cash used for acquisitions, related to the Stuart Weitzman acquisition in the fourth quarter of fiscal 2015, as well as an increase in net cash used of $51.9 million related to increased investments in the Hudson Yards joint venture and higher planned capital investment. During fiscal 2013, the Company invested $100.8 million in a corporate debt securities portfolio through one of its subsidiaries outside of the U.S., consisting of high-credit quality U.S. and non-U.S. issued corporate debt securities, and $70.0 million in time deposits, with no similar investment activity in the prior fiscal year period. During fiscal 2013, the Company invested $93.9 million in a joint venture agreement with Related Parties, L.P. to develop a new office tower in Manhattan, known as Hudson Yards, that will serve as the Company’s headquarters. Purchases of property and equipment were $241.4venture.

Net cash provided by financing activities was $389.3 million in fiscal ~~2013, or $57.0 million higher than fiscal 2013, primarily reflecting store related capital expenditures, and $24.8 million~~2015 as compared to a use of ~~direct capital for our new corporate headquarters.~~

~~Net cash used in financing activities was $689.1~~of $748.1 million in fiscal ~~2013, or a decrease~~2014. This increase of ~~$52.8~~cash provided of $1,137.4 million ~~as compared~~was primarily due to the ~~prior~~debt borrowings described in Note 11, "Debt", as well as the absence of cash used for share repurchases during fiscal ~~year period. This~~2015. The Company received $896.7 million in proceeds from long term debt, net ~~decrease~~of discount, which was ~~primarily attributable to $300.0 million lower expenditures for common stock repurchases~~ partially offset by ~~$104.6~~net repayments of $140 million ~~lower net proceeds from share-based awards, $79.4 million higher dividend payments,~~under the Company's Amended and ~~$41.2~~Restated Credit Agreement during fiscal 2015, compared to $140 million of ~~lower excess tax benefits from share-based awards. The higher dividend payments were due to an increased dividend rate per share.~~

~~On June 18, 2012,~~net borrowings during fiscal 2014. Furthermore, the Company ~~established a $400~~used $524.9 million ~~revolving credit facility with certain lenders~~for share repurchases in fiscal 2014, compared to no stock repurchases occurring in fiscal 2015.

We have the ~~fiscal year ending June 28, 2014,~~ability to draw on our credit facilities or access other sources of financing options available to us in the ~~Company expects total~~credit and capital ~~expenditures~~markets for, among other things, funding our investment in the Hudson Yards joint venture, our transformation-related initiatives, acquisition or integration-related costs, settlement of a material contingency, or a material adverse business or macroeconomic development, as well as for other general corporate business purposes.

Management believes that cash flows from operations, access to ~~be approximately $280 million. Capital expenditures~~the credit and capital markets and our credit lines, on-hand cash and cash equivalents and our investments will ~~be primarily for new stores in North America and Asia~~provide adequate funds to support our ~~global expansion. We will also continue to invest in department store~~operating, capital, and ~~distributor locations~~debt service requirements for the foreseeable future, our plans for acquisitions, further business expansion and ~~corporate infrastructure, primarily technology. These investments~~transformation-related initiatives. Future events, such as acquisitions or joint ventures, and other similar transactions may require additional capital. There can be no assurance that any such capital will be ~~financed primarily from~~available to the Company on ~~hand cash and operating cash flows.~~

~~Coach experiences significant seasonal variations in its~~acceptable terms or at all. Our ability to fund working capital ~~requirements. During~~needs, planned capital expenditures, dividend payments and scheduled debt payments, as well as to comply with all of the ~~first fiscal quarter Coach builds inventory for~~financial covenants under our debt agreements, depends on future operating performance and cash flow, which in turn are subject to prevailing economic conditions and to financial, business and other factors, some of which are beyond the holiday selling season, opens new retail stores and generates higher levels of trade receivables. In the second fiscal quarter its working capital requirements are reduced substantially as Coach generates consumer sales and collects wholesale accounts receivable. In fiscal 2013, Coach purchased approximately $1.4 billion of inventory, which was funded by on hand cash and operating cash flows.

Company's control.

In April 2013 the Company entered into a joint venture agreement with the Related Companies, L.P. to develop a new office tower in Manhattan in the Hudson Yards district. The formation of the joint venture serves as a financing vehicle for the project, with the Company owning less than 43%. of the joint venture. Upon completion of the office tower, ~~in 2015,~~ the Company will retain a condominium interest serving as its new corporate headquarters. During fiscal ~~2013,~~2015 the Company invested ~~$93.9~~$139.1 million in the joint venture. Since the formation of the Hudson Yards joint venture, the Company has invested $320.2 million in the joint venture. The Company expects to further invest approximately ~~$440~~$210 million, ~~over~~ the ~~next three years. Depending~~significant majority of which will be by the end of fiscal 2016, depending on construction ~~progress, the Company’s latest estimate contemplates an~~progress. In addition to its investment ~~range of $130 million to $160 million~~ in ~~fiscal 2014. Outside of~~ the joint venture, Coach is directly investing in ~~aspects~~a portion of the design and build-out of the new corporate ~~headquarters. In fiscal 2013, $24.8~~headquarters and has incurred $34.0 million ~~was included in~~of capital expenditures to date, including $5.9 million in fiscal 2015, and ~~we expect an additional $190~~expects to incur approximately $185 million over the remaining period of construction. ~~The joint venture investments~~

On January 5, 2015, the Company entered into a purchase agreement with Stuart Weitzman Topco LLC and ~~capital expenditures (the purchase~~Stuart Weitzman Intermediate LLC, a wholly owned subsidiary of Topco. On May 4, 2015, the acquisition was consummated. Under the terms of the ~~new headquarters) will be financed by~~Stuart Weitzman purchase agreement, Coach purchased all of the ~~Company with cash on hand, borrowings under its credit facility and approximately $130 million~~equity interests of ~~proceeds from the sale of its current headquarters buildings.~~

Management believes that cash flow from operations, on hand cash, cash equivalents and its credit lines will provide adequate funds for the foreseeable working capital needs, planned capital expenditures, dividend paymentsStuart Weitzman Intermediate LLC, a luxury footwear company and the common stock repurchase program. Any future acquisitions or joint ventures, and other similar transactions may require additional capital. There can be no assurance that any such capital will be availableparent of Stuart Weitzman Holdings, LLC, from Topco for an aggregate payment of approximately $531.1 million in cash, subject to ~~Coach on acceptable terms or at all. Coach’s ability to fund its working capital needs, planned capital expenditures, dividend payments and scheduled debt payments,~~customary purchase price adjustments, as well as a potential earnout of up to ~~comply with all of the financial covenants under its debt agreements, depends on its future operating performance and~~$14.7 million annually in cash ~~flow, which in turn are subject to prevailing economic conditions and to financial, business and other factors, some of which are beyond Coach’s control.~~

Besides the credit facilities noted previously, at June 29, 2013 the Company had a separate $200 million letter of credit arrangement in place, and $14.9 million of letters of credit outstanding. These letters of credit, which expire at various dates through 2014, primarily collateralize the Company’s obligation to third parties for the purchase of inventory.

~~As previously noted, the Company expects to invest approximately $440 million in the joint venture~~ over the next three calendar years ~~with approximately $130 million~~based on the achievement of certain revenue targets. On May 4, 2015, the Company funded the acquisition through cash on-hand, including the utilization of a portion of debt related proceeds, as described in Note 11, "Debt." Refer to ~~$160 million estimated~~Note 7, "Acquisitions," for further discussion on the Stuart Weitzman acquisition.

Because Coach products are frequently given as gifts, we experience seasonal variations in ~~fiscal 2014, depending on~~

In October 2012, the ~~Reed Krakoff business and the acquisition~~Company’s Board of ~~our European joint venture.~~

Directors approved a common stock repurchase program to acquire up to $1.5 billion of Coach’s outstanding common stock through June 2015. As of June ~~29, 2013,~~27, 2015, the program has expired.

Purchases of Coach common stock are made subject to market conditions and at prevailing market prices, through open market purchases. Under Maryland law, Coach’s state of incorporation, treasury shares are not allowed. As a result, all repurchased shares are retired when acquired.

During fiscal 2015, the Company did not repurchase or retire any shares. During fiscal 2014, the Company repurchased and retired 10.2 million shares, or $524.9 million of common stock, at an average cost of $51.27.

Excluded from the above contractual obligations table is the non-current liability for unrecognized tax benefits of $185.7 million as of June 27, 2015, as we cannot make a reliable estimate of the period in which the liability will be settled, if ever. The above table ~~above~~also excludes ~~the following:~~ amounts included in current liabilities in the Consolidated Balance Sheet at June ~~29, 2013~~27, 2015 as these items will be paid within one ~~year;~~year, certain long-term liabilities not requiring cash payments and cash contributions for the Company’s pension plans.

In addition to the commitments included in the table above, we have outstanding letters of credit $6.8 million as of June 27, 2015, primarily serving to collateralize our obligation to third parties for insurance claims and store leases. These letters of credit expire at various dates through 2016.

As discussed earlier, the Company entered into a joint venture agreement with the Related Companies, L.P. to develop a new office tower in Manhattan in the Hudson Yards district, in April 2013. The formation of the Hudson Yards joint venture serves as a financing vehicle for the project. Construction of the new building has commenced and upon expected completion of the office tower in fiscal 2016, the Company will retain a condominium interest serving as its new corporate headquarters. The Company’s maximum loss exposure is limited to the committed capital.

We do not maintain any other off-balance sheet arrangements, transactions, obligations, or other relationships with unconsolidated entities that would be expected to have a material current or future effect on our consolidated financial statements. Refer to Note 12, "Commitments and Contingencies," to the accompanying audited consolidated financial statements for further information.

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect ~~the reported amounts~~our results of ~~assets~~operations, financial condition and ~~liabilities and~~cash flows as well as the disclosure of contingent assets and liabilities atas of the date of the Company's financial ~~statements as well as the reported amounts of revenues and expenses during the reporting period.~~statements. Actual results could differ from estimates in amounts that may be material to the financial statements. Predicting future events is inherently an imprecise activity and, as such, requires the use of judgment. Actual results could differ from estimates in amounts that may be material to the financial statements. The development and selection of the Company’s critical accounting policies and estimates are periodically reviewed with the Audit Committee of the Board.

The accounting policies discussed below are considered critical because changes to certain judgments and assumptions inherent in these policies could affect the financial statements. For more information on ~~Coach’s~~the Company's accounting policies, please refer to the Notes to Consolidated Financial Statements.

Long-term investments primarily consist of high-credit quality U.S. and non-U.S. issued corporate debt securities, classified as available-for-sale, and recorded at fair value, with unrealized gains and losses recorded in other comprehensive income. Short-term investments consist primarily of time deposits with original maturities greater than three months and with maturities within one year of balance sheet date. Dividend and interest income are recognized when earned.

Investments in companies in which the Company has significant influence, but less than a controlling financial interest, are accounted for using the equity method. Significant influence is generally presumed to exist when the Company owns between 20% and 50% of the investee, however, other factors should be considered, such as board representation and the rights to participate in the day-to-day operations of the business.

Additionally, GAAP requires the consolidation of all entities for which a Company has a controlling voting interest and all variable interest entities (“VIEs”) for which a Company is deemed to be the primary beneficiary. An entity is generally a VIE if it meets any of the following criteria: (i) the entity has insufficient equity to finance its activities without additional subordinated financial support from other parties, (ii) the equity investors cannot make significant decisions about the entity’s operations or (iii) the voting rights of some investors are not proportional to their obligations to absorb the expected losses of the entity or receive the expected returns of the entity and substantially all of the entity’s activities involve or are conducted on behalf of the investor with disproportionately few voting rights.

From time to time, Coach may make an investment that requires judgment in determining whether the entity is a VIE. If it is determined that the entity is a VIE, the Company must assess whether it is the primary beneficiary.

The Company’s inventories are reported at the lower of cost or market. Inventory costs include material, conversion costs, freight and duties and are determined by the first-in, first-out method. The Company reserves for slow-moving and aged inventory based on historical experience, current product demand and expected future demand. A decrease in product demand due to changing customer tastes, buying patterns or increased competition could impact Coach’s evaluation of its slow-moving and aged inventory and additional reserves might be required. At June 29, 2013, a 10% change in the reserve for slow-moving and aged inventory would have resulted in an insignificant change in inventory and cost of sales.

Revenue is recognized by the Company when there is persuasive evidence of an arrangement, delivery has occurred (and risks and rewards of ownership have been transferred to the buyer), price has been fixed or is determinable, and collectability is reasonably assured.

Retail store and concession-based ~~shop-within-shop~~shop-in-shop revenues are recognized at the point of sale, which occurs when merchandise is sold in an over-the-counter consumer transaction. These revenues are recognized

Wholesale revenue is recognized at the time title passes and risk of loss is transferred to customers. Wholesale revenue is recorded net of estimates of returns, discounts and markdown allowances. Returns and allowances require pre-approval from management and discounts are based on trade terms. Estimates for markdown reserves are based on historical trends, actual and forecasted seasonal results, an evaluation of current economic and market conditions, retailer performance, and, in certain cases, contractual terms. The Company reviews and refines these estimates on at least a quarterly basis. The Company’s historical estimates of these costs have not differed materially from actual results.

At June ~~29, 2013,~~27, 2015, a 10% change in the allowances for estimated uncollectible accounts, ~~discounts~~markdowns and returns would have resulted in an insignificant change in ~~accounts receivable~~the Company's reserves and net sales.

Gift cards issued by the Company are recorded as a liability until they are redeemed, at which point revenue is recognized. The Company recognizes income for unredeemed gift cards when the likelihood of a gift card being redeemed by a customer is remote, which is approximately two years after the gift card is issued, and the Company determines that it does not have a legal obligation to remit the value of the unredeemed gift card to the relevant jurisdiction as unclaimed or abandoned property. Revenue associated with gift card breakage is not material to the Company’s net operating results.

The Company’s inventories are reported at the lower of cost or market. Inventory costs include material, conversion costs, freight and duties and are primarily determined by the first-in, first-out method. The Company ~~accounts~~reserves for ~~sales taxes~~inventory, including slow-moving and aged inventory, based on current product demand, expected future demand and historical experience. A decrease in product demand due to changing customer tastes, buying patterns or increased competition could impact the Company's evaluation of its inventory and additional reserves might be required. Estimates may differ from actual results due to the quantity, quality and mix of products in inventory, consumer and retailer preferences and market conditions. At June 27, 2015, a 10% change in the inventory reserve, excluding amounts associated with the Transformation Plan, would have resulted in an insignificant change in inventory and cost of sales. Refer to Note 3, "Transformation and Other Actions," for charges related to inventory under the Company's Transformation Plan.

In connection with an acquisition, we are required to record all assets acquired and liabilities assumed of the acquired business at their acquisition date fair value, including the recognition of contingent consideration at fair value on the acquisition date. These fair value determinations require our judgment and may involve the use of significant estimates and assumptions, including assumptions with respect to future cash inflows and outflows, discount rates, asset lives, and market multiples, among other items. We may utilize independent third-party valuation firms to assist in making these fair value determinations. Refer to Note 7, "Acquisitions," for detailed disclosures related ~~taxes on a net basis, excluding such taxes from revenue.~~

Goodwill and certain other intangible assets deemed to have indefinite useful lives, including trademarks and trade names, are not amortized, but are assessed for impairment at least annually. Finite-lived intangible assets are amortized over their respective estimated useful lives and, and along with other long-lived assets as noted above, are evaluated for impairment periodically whenever events or changes in circumstances indicate that their related carrying values may not be fully recoverable. Estimates of fair value for finite-lived intangible assets are primarily determined using discounted cash flows, with consideration of market comparisons and recent transactions. This approach may use significant estimates and assumptions, including projected future cash flows, discount rates and growth rates.

The Company ~~has no finite-lived~~generally performs its annual goodwill and indefinite-lived intangible ~~assets.~~

assets impairment analysis using a qualitative approach to determine whether it is more likely than not that the fair values of such assets are less than their respective carrying values. If, based on the results of the qualitative assessment, it is concluded that it is not more likely than not that the fair value of the asset exceeds its carrying value, a quantitative test is performed. The ~~Company uses a~~ quantitative goodwill impairment test ~~which~~ is a two-step process. The first step is to identify the existence of potential impairment by comparing the fair value of each reporting unit with its ~~net book~~carrying value, including goodwill. If the fair value of a reporting unit exceeds its carrying value, the reporting unit's goodwill is considered not to be impaired and performance of the second step of the quantitative goodwill impairment test is unnecessary.

If the carrying value of a reporting unit exceeds its fair value, the second step of the goodwill impairment test is performed to measure the amount of impairment loss, if any. The second step of the goodwill impairment test compares the implied fair value of the reporting unit’s goodwill with the carrying value of that goodwill. If the carrying value of the reporting unit’s goodwill exceeds the implied fair value of that goodwill, an impairment loss is recognized in an amount equal to that excess. The implied fair value of goodwill is ~~allocated~~determined in the same manner as the amount of goodwill that would be recognized in a business combination. In other words, the fair value of the reporting unit is allocated to all of the assets and liabilities of that unit as if the reporting unit had been acquired in a business combination and the fair value was the purchase price paid to acquire the reporting unit.

Determination of the fair value of a reporting unit and the fair value of individual assets and liabilities of a reporting unit is based on management's assessment, considering independent third-party appraisals when necessary. Furthermore, this determination is judgmental in nature and often involves the use of significant estimates and assumptions. These estimates and assumptions could have a significant impact on whether or not an impairment charge is recognized and the amount of any such charge. Estimates of fair value are primarily determined using discounted cash flows, market comparisons, and recent transactions. These approaches use significant estimates and assumptions, including projected future cash flows, discount rates, growth rates, and determination of appropriate market comparables.

The Company ~~performed~~performs its annual impairment assessment of goodwill, including trademarks and trade names, during the ~~third~~fourth quarter of each fiscal year. The Company determined that there was no impairment in fiscal ~~2013,~~2015, fiscal ~~2012~~2014 or fiscal ~~2011.~~

2013 as the fair values of our reporting units significantly exceeded their respective carrying values.

Long-lived assets, such as property and equipment, are evaluated for impairment whenever events or circumstances indicate that the carrying value of the assets may not be recoverable. ~~The evaluation is based on a review~~In evaluating long-lived assets for recoverability, the Company uses its best estimate of ~~forecasted operating~~future cash flows ~~and~~expected to result from the ~~profitability~~use of the ~~related~~ asset ~~group. An~~and its eventual disposition. To the extent that estimated future undiscounted net cash flows attributable to the asset are less than its carrying value, an impairment loss is recognized ifequal to the ~~forecasted cash flows are less than~~difference between the carrying ~~amount~~value of the asset. Similar to prior fiscal years, when assessing store assets for impairment in fiscal 2013, the Company analyzed the cash flows at an individual store-by-store level, which is the lowest level for identifiable cash flows. The Company recorded impairment losses of $16.6 million in fiscal 2013. The Company did not record any impairment losses in fiscal 2012 or fiscal 2011.

such asset and its fair value, considering external market participant assumptions.

In determining future cash flows, ~~we take~~Coach takes various factors into account, including changes in merchandising strategy, the emphasis on retail store cost controls, the effects of macroeconomic trends such as consumer spending, the impacts of the experienced level of retail store managers, ~~and~~ the level of ~~advertising.~~advertising, promotional cadence and in-store capital investments. Since the determination of future cash flows is an estimate of future performance, there may be future impairments in the event that future cash flows do not meet expectations.

The Company recognizes the cost of equity awards to employees and the non-employee Directors based on the grant-date fair value of those awards. The grant-date fair values of share unit awards are based on the fair value of the Company's common stock on the date of grant. The grant-date fair value of stock option awards is determined using the Black-Scholes option pricing model and involves several assumptions, including the expected term of the option, expected volatility and dividend yield. The expected term of options represents the period of time that the options granted are expected to be outstanding and is based on historical experience. Expected volatility is based on historical volatility of the Company’s stock as well as the implied volatility from publicly traded options on ~~Coach’s~~the Company's stock. Dividend yield is based on the current expected annual dividend per share and the Company’s stock price. Changes in the assumptions used to determine the Black-Scholes value could result in significant changes in the Black-Scholes value. ~~However, a 10% change in the Black-Scholes value would have resulted in an insignificant change in fiscal 2013 share-based compensation expense.~~

For stock options and share unit awards, the Company recognizes share-based compensation net of estimated forfeitures and revises the estimates in subsequent periods if actual forfeitures differ from the estimates. We estimate the forfeiture rate based on historical experience as well as expected future behavior.

The Company grants performance-based share awards to certain key executives, the vesting of which is subject to the executive’s continuing employment and the Company's achievement of certain performance goals. On a quarterly basis, the Company assesses actual performance versus the predetermined performance goals, and adjusts the share-based compensation

A hypothetical 10% change in our stock-based compensation expense would have affected our fiscal 2015 net income by approximately $7 million.

The Company’s effective tax rate is based on pre-tax income, statutory tax rates, tax laws and regulations, and tax planning strategies available in the various jurisdictions in which Coach operates. The Company classifies interest and penalties on uncertain tax positions in the provision for income taxes. We record net deferred tax assets to the extent we believe that it is more likely than not that these assets will be realized. In making such determination, we consider all available evidence, including scheduled reversals of deferred tax liabilities, projected future taxable income, tax planning strategies and recent results of operation. We reduce our deferred tax assets by a valuation allowance if, based upon the weight of available evidence, it is more likely than not that some amount of deferred tax assets is not expected to be realized. ~~In fiscal 2013, the Company changed its policy for disclosure of valuation allowances related to deferred tax assets whose realization is deemed remote from a net to a gross basis.~~

~~In accordance with ASC 740-10, the~~

The Company recognizes the impact of tax positions in the financial statements if those positions will more likely than not be sustained on audit, based on the technical merits of the position. Although we believe that the estimates and assumptions we use are reasonable and legally supportable, the final determination of tax audits could be different than that which is reflected in historical

See Note 2, "Significant Accounting ~~Standards Codification Topic 220, “~~~~Comprehensive Income~~~~,” was amended in June 2011~~Policies," to ~~require entities to present~~ the total of comprehensive income, the components of net income, and the components of other comprehensive income either in a single continuous statement of comprehensive income or in two separate but consecutive statements. The amendment does not change the items that must be reported in other comprehensive income or when an item of other comprehensive income must be reclassified to net income under current GAAP. This guidance was effective for the Company’s fiscal year and interim periods beginning July 1, 2012. The adoption of this amendment did not have a material effect on the Company’saccompanying audited consolidated financial ~~statements.~~

~~In September 2011, Accounting Standards Codification 350-20, “~~~~Intangibles — Goodwill and Other — Goodwill~~,” was amended to allow entities to assess qualitative factors to determine if it is more-likely-than-not that goodwill might be impaired, and whether it is necessary to perform the two-step goodwill impairment test required under currentstatements for a description of certain recently issued or proposed accounting ~~standards. This guidance was effective for the Company’s fiscal year beginning July 1, 2012. The adoption of this amendment did not have a material effect on the Company’s~~standards which may impact our consolidated financial ~~statements.~~

statements in future reporting periods.

The market risk inherent in our financial instruments represents the potential loss in fair value, earnings or cash flows, arising from adverse changes in foreign currency exchange rates or interest rates. Coach manages these exposures through operating and financing activities and, when appropriate, through the use of derivative financial instruments. The use of derivative financial instruments is in accordance with ~~Coach’s~~the Company's risk management ~~policies. Coach does~~policies, and we do not enter into derivative transactions for speculative or trading purposes.

The quantitative disclosures in the following discussion are based on quoted market prices obtained through independent pricing sources for the same or similar types of financial instruments, taking into consideration the underlying terms and maturities and theoretical pricing models.

Foreign currency exposures arise from transactions, including firm commitments and anticipated contracts, denominated in a currency other than the entity’s functional currency, and from foreign-denominated revenues and expenses translated into U.S. dollars. ~~Substantially all~~The majority of ~~Coach’s~~the Company's purchases and sales involving international parties, excluding international consumer sales, are denominated in U.S. dollars and, therefore, ~~are not subject to~~our foreign currency exchange ~~risk.~~risk is limited. The Company is exposed to risk from foreign currency exchange rate fluctuations resulting from its ~~foreign~~ operating subsidiaries’ U.S. dollar and Euro denominated inventory purchases. To mitigate such risk, Coach Japan and Coach Canada enter into foreign currency derivative contracts, primarily zero-cost collar ~~options.~~options and forward foreign currency contracts. As of June ~~29, 2013~~27, 2015 and June ~~30, 2012,~~28, 2014, zero-cost collar options and forward foreign currency exchange contracts designated as cash flow hedges with a notional amount of ~~$193.4~~$126.7 million and ~~$310.9~~$90.2 million, respectively, were outstanding.

~~Coach~~ As a result of the use of derivative instruments, we are exposed to the risk that counterparties to the derivative instruments will fail to meet their contractual obligations. To mitigate the counterparty credit risk, we only enter into derivative contracts with carefully selected financial institutions. The Company also reviews the creditworthiness of our counterparties on a regular basis. As a result of the above considerations, we do not believe that we are exposed to any undue concentration of counterparty credit risk associated with our derivative contracts as of June 27, 2015.

The Company is also exposed to market risk from foreign currency exchange rate fluctuations with respect to various cross-currency intercompany loans which are not long term in investment nature. This primarily includes exposure to exchange rate fluctuations in the Singapore Dollar, the Euro, the British Pound Sterling, the New Taiwan Dollar and ~~related party loans. These loans are denominated in various foreign currencies, with a total principal amount of $253.0 million and $286.4 million as of June 29, 2013 and June 30, 2012, respectively.~~the Malaysian Ringgit. To manage the exchange rate risk related to these loans, the Company ~~entered~~primarily enters into forward exchange and cross-currency swap contracts, the terms of which include the exchange of foreign currency fixed interest for U.S. dollar fixed interest and an exchange of the foreign currency and U.S. dollar based notional values at the maturity dates of the contracts, the latest of which is May 2014.contracts. As of June ~~29, 2013~~27, 2015 and June ~~30, 2012,~~28, 2014, the total notional values of outstanding forward foreign currency exchange and cross-currency swap contracts related to these loans were ~~$147.6~~$25.8 million and ~~$206.6~~$13.2 million, respectively.

The fair value of ~~open~~outstanding foreign currency derivatives included in current assets at June ~~29, 2013~~27, 2015 and June ~~30, 2012~~28, 2014 was ~~$4.5~~$3.4 million and ~~$1.5~~$0.5 million, respectively. The fair value of ~~open~~outstanding foreign currency derivatives included in current liabilities at June ~~29, 2013~~27, 2015 and June ~~30, 2012~~28, 2014 was ~~$2.9~~$0.2 million and ~~$4.1~~$0.9 million, respectively. The fair value of these contracts is sensitive to changes in foreign currency exchange rates.

The Company is exposed to interest rate risk in relation to its ~~investments~~Amended and ~~revolving credit facilities.~~

Restated Credit Agreement, including the Term Loan, the 4.250% Senior Notes and investments.

The Company’s investment portfolio is maintained in accordance with the Company’s investment policy, which defines our investment principles including credit quality standards and limits the credit exposure of any single issuer. The primary objective

Based on the evaluation of the Company’s disclosure controls and procedures, as that term is defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended, ~~each of Lew Frankfort,~~ the Chief Executive Officer of the Company and ~~Jane Nielsen,~~ the Chief Financial Officer of the Company, ~~has~~have concluded that the Company’s disclosure controls and procedures are effective as of June ~~29, 2013.~~

The Company’s management is responsible for establishing and maintaining adequate internal controls over financial reporting. The Company’s internal control system was designed to provide reasonable assurance to the Company’s management and Board regarding the preparation and fair presentation of published financial statements. Management evaluated the effectiveness of the Company’s internal control over financial reporting using the criteria set forth by the Committee of Sponsoring Organizations (COSO) of the Treadway Commission in Internal Control — Integrated Framework in ~~1992.~~2013. Management, under the supervision and with the participation of the Company’s Chief Executive Officer and Chief Financial Officer, assessed the effectiveness of the Company’s internal control over financial reporting as of June ~~29, 2013~~27, 2015 and concluded that it is effective.

There were no changes in internal control over financial reporting that occurred during the fourth fiscal quarter that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

The information required to be included by Item 10 of Form 10-K will be included in the Proxy Statement for the ~~2013~~2015 Annual Meeting of Stockholders and such information is incorporated by reference herein. The Proxy Statement will be filed with the Commission within 120 days after the end of the fiscal year covered by this Form 10-K pursuant to Regulation 14A under the Securities Exchange Act of 1934, as amended.

The information regarding executive and director compensation set forth in the Proxy Statement for the ~~2013~~2015 Annual Meeting of Stockholders is incorporated herein by reference. The Proxy Statement will be filed with the Commission within 120 days after the end of the fiscal year covered by this Form 10-K pursuant to Regulation 14A under the Securities Exchange Act of 1934, as amended.

The information under the headings “Securities Authorized for Issuance Under Equity Compensation Plans” and “Coach Stock Ownership by Certain Beneficial Owners and Management” in the Company’s Proxy Statement for the ~~2013~~2015 Annual Meeting of Stockholders is incorporated herein by reference.

There are no arrangements known to the registrant that may at a subsequent date result in a change in control of the registrant.

The Proxy Statement will be filed with the Commission within 120 days after the end of the fiscal year covered by this Form 10-K pursuant to Regulation 14A under the Securities Exchange Act of 1934, as amended.

The information required to be included by Item 13 of Form 10-K will be included in the Proxy Statement for the ~~2013~~2015 Annual Meeting of Stockholders and such information is incorporated by reference herein. The Proxy Statement will be filed with the Commission within 120 days after the end of the fiscal year covered by this Form 10-K pursuant to Regulation 14A under the Securities Exchange Act of 1934, as amended.

The information required by this item is incorporated herein by reference to the sections entitled “Fees For Audit and Other Services” and “Audit Committee Pre-Approval Policy” in the Proxy Statement for the ~~2013~~2015 Annual Meeting of Stockholders. The Proxy Statement will be filed with the Commission within 120 days after the end of the fiscal year covered by this Form 10-K pursuant to Regulation 14A under the Securities Exchange Act of 1934, as amended.

⁽¹⁾ During fiscal 2015, there was less than 0.1 million shares of PRSU activity due to changes in performance conditions.

At June ~~29, 2013, $17,330~~27, 2015, $16.2 million of total unrecognized compensation cost related to non-vested share awards is expected to be recognized over a weighted-average period of ~~1.9~~1.1 years.

The weighted-average grant-date fair value of share awards granted during fiscal ~~2013,~~2015, fiscal ~~2012~~2014 and fiscal ~~2011~~2013 was $36.43, $32.53 and $50.55, ~~$62.07~~respectively. The total fair value of awards that vested during fiscal 2015 and ~~$36.92,~~fiscal 2014 was $2.5 million and $23.8 million, respectively. There were no vestings of performance-based shares during fiscal ~~2013,~~2013.

During fiscal ~~2012 or fiscal 2011.~~

During fiscal 2014, the Company granted 0.2 million shares of common stock with a fair value of $6.8 million to selected executives as retention PRSU awards with a maximum potential number of shares issued and fair value (excluding dividends) of 0.3 million shares and $9.1 million, respectively. The shares of common stock under these PRSU awards will be earned and distributed based on performance criteria which ~~compare~~compares the Company’s total stockholder return over the performance period to the total stockholder return of the companies included in the Standard & Poor’s 500 Index on the date of grant (excluding the Company). The grant date fair value of the PRSU ~~award of $13,700~~awards was determined utilizing a Monte Carlo simulation and the following assumptions: ~~Expected~~expected volatility of ~~40.19%~~32.61%, risk-free interest rate of ~~0.76%~~0.63%, and dividend yield of 0.00%.

Included in the non-vested amount at June 27, 2015 are approximately 0.8 million of PRSU awards that are based on the aforementioned performance criteria.

In fiscal ~~2013,~~2015, fiscal ~~2012~~2014 and fiscal ~~2011,~~2013, the cash tax benefit realized for the tax deductions from all RSUs (service and performance-based) was ~~$26,097, $30,740~~$15.7 million, $33.5 million and ~~$18,114,~~$26.1 million, respectively.

Under the 2001 Employee Stock Purchase Plan, full-time ~~Coach~~ employees are permitted to purchase a limited number of ~~Coach~~Company common shares at 85% of market value. Under this plan, ~~Coach~~the Company sold ~~122, 129,~~0.1 million, 0.1 million, and ~~120 new~~0.1 million shares to employees in fiscal ~~2013,~~2015, fiscal ~~2012~~2014 and fiscal ~~2011,~~2013, respectively. Compensation expense is calculated for the fair value of employees’ purchase rights using the Black-Scholes model and the following weighted-average assumptions:

The weighted-average fair value of the purchase rights granted during fiscal ~~2013,~~2015, fiscal ~~2012~~2014 and fiscal ~~2011~~2013 was ~~$15.08, $17.31,~~$8.41, $13.30, and ~~$11.51,~~$15.08, respectively. The Company issues new shares for employee stock purchases.

The amortized cost, gross unrealized gains, gross unrealized losses and fair value of June 29, 2013, the Company's equity method investment related to an equity interest in an entity formed during fiscal 2013 for the purpose of developing of a new office tower in Manhattan (the “Hudson Yards joint venture”) withavailable-for-sale securities are presented below (in millions):

On May 4, 2015, the Company ~~owning less than 43%. This investment is~~acquired all of the outstanding equity interests of Stuart Weitzman Topco LLC (“Topco”) and Stuart Weitzman Intermediate LLC (“Stuart Weitzman”), a wholly owned subsidiary of Topco, which the Company believes will complement its current leadership position in premium handbags and accessories. Stuart Weitzman designs and manufactures women’s luxury footwear and accessories. The results of the Stuart Weitzman’s operations (including approximately $43 million of net sales and an operating loss of $4 million, including the effects of purchase accounting and contingent payments) have been included in the ~~Company’s long-term investments.~~

consolidated financial statements since the date of acquisition within the Other segment.

The ~~formation~~aggregate cash paid in connection with the acquisition of Stuart Weitzman was $531.1 million (or $519.6 million net of cash acquired). Furthermore, the ~~Hudson Yards joint venture serves as~~acquisition agreement contains a ~~financing vehicle for the project. Construction~~potential earnout payment of ~~the new building has commenced and upon completion of the office tower~~up to $14.7 million annually in calendar 2015, the Company will retain a condominium interest serving as its new corporate headquarters. During fiscal 2013, the Company invested $93,930 in the joint venture. The Company expects to invest approximately $440,000cash over the next three calendar years, based on the achievement of certain revenue targets. The agreement also contains a catch-up provision that provides that if the revenue targets are missed in any one year but are surpassed in succeeding years then amounts for past years become due upon surpassing targets in succeeding years. The total amount payable under the earnout will not exceed $44.0 million.

The Company funded the acquisition through cash on-hand, including the utilization of a portion of debt related proceeds, as described in Note 11, “Debt.”

The purchase price allocations for these assets and liabilities are substantially complete, however it may be subject to change as additional information is obtained during the acquisition measurement period. The following table summarizes the fair value of the assets acquired and liabilities assumed as of the acquisition date (in millions):

On July 1, 2013, the Company became the 100% owner of its European joint venture by purchasing Hackett Limited’s remaining 50% interest in ~~fiscal 2014, depending on construction progress. Outside of~~ the joint venture, ~~Coach is directly investing~~enabling the Company to assume direct control and consolidate its European retail business. The joint venture included 18 retail locations in ~~a portion~~Spain, Portugal, Great Britain, France, Ireland and Germany. The results of the ~~design~~acquired business have been included in the consolidated financial statements since the date of acquisition within the International segment. The purchase price consisted of cash payments of approximately $15.1 million and ~~build-out~~the forgiveness of a loan from the Company to Hackett Limited of approximately $18.0 million. The allocation of the ~~new corporate headquarters. In fiscal 2013, $24,800 was included~~purchase price acquisition has been completed resulting in ~~capital expenditures and we expect another $190,000 over the period~~goodwill of ~~construction.~~

The Hudson Yards joint venture is determined to be a VIE primarily due to the fact that it has insufficient equity to finance its activities without additional subordinated financial support from its two joint venture partners. Coach$14.8 million which is not considered the primary beneficiary of the entity primarily because the Company does not have the power to direct the activities that most significantly impact the entity’s economic performance. The Company’s maximum loss exposure is limited to the committed capital.

tax deductible.

On July 1, 2012, ~~Coach~~the Company acquired 100% of its domestic retail business in Malaysia (consisting of ~~ten~~10 retail stores) from the former distributor, Valiram Group, and on August 5, 2012, acquired 100% of its domestic retail business in South Korea (consisting of 47 retail and department ~~stores)~~store locations) from the former distributor, Shinsegae International. The results of the acquired businesses have been included in the consolidated financial statements since the dates of acquisition within the International segment. The aggregate cash paid in connection with the acquisitions of the Malaysia and South Korea businesses was ~~$8,593~~$8.6 million and ~~$36,851,~~$36.9 million, respectively. The Company ~~is obligated to make additional~~made a contingent ~~payments~~payment to Shinsegae International, ~~estimated at $10,000, with $6,000 and $4,000 scheduled to be paid during the first quarter~~ of $6.0 million in fiscal 2014 and $3.8 million in fiscal 2015 ~~respectively.~~

(classified as financing activities within the Consolidated Statements of Cash Flows).

Assets Acquired Estimated Fair Value
Current assets $ 12,671
Fixed assets and other non-current assets 3,087
Goodwill⁽¹⁾ 41,307
Liabilities (2,554 )
Total net assets acquired through June 30, 2012 $ 54,511

The Company leases office, distribution and retail facilities. The lease agreements, which expire at various dates through ~~2028,~~2036, are subject, in most cases, to renewal options and provide for the payment of taxes, insurance and maintenance. Certain leases contain escalation clauses resulting from the pass-through of increases in operating costs, property taxes and the effect on costs from changes in consumer price indices. Certain ~~rentals are~~store-related rent expense may also be contingent upon ~~factors such as~~ sales.

During fiscal ~~2013~~2015, fiscal 2014 and fiscal ~~2012,~~2013 there were no material gains or losses recognized in income due to hedge ineffectiveness.

For forward foreign currency exchange contracts that are designated as fair value hedges, the gain (loss) on the derivative as well as the offsetting (loss) gain on the hedged item attributable to the hedged risk, both of which are recorded within SG&A, resulted in an immaterial net impact to the Company's statement of operations.

The Company expects that ~~$6,197~~$4.4 million of net derivative ~~losses~~gains included in ~~accumulated other comprehensive income~~AOCI at June ~~29, 2013~~27, 2015 will be reclassified into earnings within the next 12 months. This amount will vary due to fluctuations in foreign currency exchange rates.

~~Hedging activity affected accumulated other comprehensive income, net of tax, as follows:~~

The Company ~~categorized~~categorizes its assets and liabilities based on the priority of the inputs to the valuation technique into a three-level fair value hierarchy as set forth below. The three levels of the hierarchy are defined as follows:

Level 1 — Unadjusted quoted prices in active markets for identical assets or liabilities.

Level 2 — Observable inputs other than quoted prices included in Level 1. Level 2 inputs include quoted prices for identical assets or liabilities in non-active markets, quoted prices for similar assets or liabilities in active markets, and inputs other than quoted prices that are observable for substantially the full term of the asset or liability.

Level 3 — Unobservable inputs reflecting management’s own assumptions about the input used in pricing the asset or liability.

The following table shows the fair value measurements of the Company’s financial assets and liabilities at June ~~29, 2013~~27, 2015 and June ~~30, 2012:~~

28, 2014 (in millions):

The Company’s non-financial instruments, which primarily consist of goodwill, intangible assets and property and equipment, are not required to be measured at fair value on a recurring basis and are reported at carrying value. However, on a periodic basis whenever events or changes in circumstances indicate that their carrying value may not be fully recoverable (and at least annually for ~~goodwill)~~goodwill and indefinite-lived intangible assets), non-financial instruments are assessed for impairment and, if applicable, written-down to and recorded at fair value, considering market participant assumptions.

~~In fiscal 2013,~~ Refer to Note 7, "Acquisitions," for further discussion of the approaches used in valuing acquired assets and assumed liabilities.

The Company incurred impairment charges of ~~$16,624~~$0.0 million in fiscal 2015, $35.5 million in fiscal 2014 and $16.6 million in fiscal 2013, to reduce the carrying amount of certain store assets (primarily leasehold improvements at selected retail store locations) to their fair values of ~~$4,310~~$6.9 million as of June 28, 2014 and $4.3 million as of June 29, 2013. The fair values of these assets were determined based on Level 3 measurements. Inputs to these fair value measurements included estimates of the amount and the timing of the stores' net future discounted cash flows based on historical experience, current trends, and market conditions.

As of June 27, 2015, the Company's equity method investment related to an equity interest in an entity formed during fiscal 2013 for the purpose of developing a new office tower in Manhattan, the Hudson Yards joint venture, with the Company owning less than 43% of the joint venture. This investment is included in the Company’s long-term investments.

The formation of the Hudson Yards joint venture serves as a financing vehicle for the project. Construction of the new building has commenced and upon completion of the office tower in fiscal 2016, the Company will retain a condominium interest serving as its new corporate headquarters. During fiscal 2015, the Company invested $139.1 million in the joint venture. Since the formation of the Hudson Yards joint venture, the Company has invested $320.2 million. The Company expects to invest approximately ~~$440,000~~$210 million over the next two years, with approximately $195 million estimated in fiscal 2016, depending on construction progress. Outside of the joint venture, the Company is directly investing in a portion of the design and build-out of the new corporate headquarters. In fiscal 2015, $5.9 million was included in capital expenditures and we expect approximately another $185 million over the period of construction.

The Hudson Yards joint venture ~~over~~is determined to be a VIE primarily due to the ~~next three years, with approximately $130,000~~fact that it has insufficient equity to ~~$160,000 estimated in fiscal 2014, depending on construction progress.~~

finance its activities without additional subordinated financial support from its two joint venture partners. The Company is not considered the primary beneficiary of the entity primarily because the Company does not have the power to direct the activities that most significantly impact the entity’s economic performance. The Company’s maximum loss exposure is limited to the committed capital.

At June ~~29, 2013~~27, 2015 and June ~~30, 2012,~~28, 2014, the Company had ~~credit available of $900,000 and $600,000, respectively, of which~~standby letters of credit totaling ~~$14,885~~$6.8 million and ~~$215,380, respectively, were~~$5.6 million outstanding. The letters of credit, which expire at various dates through ~~2014,~~2016, primarily collateralize the Company’s obligation to third parties for ~~the purchase~~insurance claims and value-added tax refunds. The Company pays certain fees with respect to letters of ~~inventory.~~

~~Coach is a party to employment agreements with certain key executives which provide for compensation and other benefits.~~ credit that are issued.

The ~~agreements also provide for severance payments under certain circumstances. The Company’s employment agreements and the respective end of initial term dates are as follows:~~


~~Executive~~	~~Title~~	~~End of Initial Term~~⁽¹⁾
~~Lew Frankfort~~	~~Chairman and Chief Executive Officer~~	~~August 2012~~
~~Reed Krakoff~~	~~President and Executive Creative Director~~	~~June 2014~~⁽²⁾
~~Michael Tucci~~	~~President, North America Retail Division~~	~~June 2013~~⁽²⁾

~~(1)~~

~~Once the initial term expires, these agreements automatically renew for successive one year terms unless either the employee or Board provides notice.~~

~~(2)~~

~~Refer to Note “Subsequent Events” regarding the sale of the Reed Krakoff business and the departure of these executive officers.~~

~~In addition to the employment agreements described above,~~Company had other contractual cash obligations as of June ~~29, 2013 and June 30, 2012 included $185,838 and $212,084, respectively,~~27, 2015, including $254.7 million related to inventory purchase obligations, ~~and $7,897 and $1,272, respectively,~~$103.1 million related to firm capital expenditure purchase ~~obligations.~~

obligations (of which the Company expects total capital expenditures to be in the area of $300 million in fiscal 2016), $4.9 million of other purchase obligations, $900.0 million of debt repayments and $257.1 million of interest payments on the 4.250% Senior Notes. Refer to Note 8, "Leases," for a summary of the Company's future minimum rental payments under non-cancelable leases. Furthermore, refer to Note 7, "Acquisitions," for a description of potential earnout payments attributable to the Stuart Weitzman acquisition.

In the ordinary course of business, ~~Coach~~the Company is a party to several pending legal proceedings and claims. Although the outcome of such items cannot be determined with certainty, ~~Coach's~~the Company's general counsel and management are of the opinion that the final outcome will not have a material effect on ~~Coach's~~the Company's cash flow, results of operations or financial position.

~~Refer to Note “Investments” for a discussion of commitments related to the Company’s Hudson Yards joint venture.~~

Based on the balance of the Company's intangible assets subject to amortization ~~consisted~~as of ~~$9,788~~June 27, 2015, the expected amortization expense for each of ~~trademarks.~~

The expected future amortization expense above reflects remaining useful lives of 14.8 years for customer relationships, four months for order backlog, and the remaining lease terms ranging from approximately two to 10 years for favorable lease rights.

The provisions for income taxes computed by applying the U.S. statutory rate to income before taxes as reconciled to the actual provisions ~~were:~~

were (in millions):

Current and deferred tax ~~provisions (benefits) were:~~

provision (benefit) was (in millions):

The components of deferred tax assets and liabilities ~~were:~~

were (in millions):

Significant judgment is required in determining the worldwide provision for income taxes, and there are many transactions for which the ultimate tax outcome is uncertain. It is the Company’s policy to establish provisions for taxes that may become payable in future years, including those due to an examination by tax authorities. The Company establishes the provisions based upon management’s assessment of exposure associated with uncertain tax positions. The provisions are analyzed at least quarterly and adjusted as appropriate based on new information or circumstances in accordance with the requirements of ASC 740.

Of the ~~$148,810~~$168.1 million ending gross unrecognized tax benefit balance as of June ~~29, 2013, $89,360~~27, 2015, $121.5 million relates to items which, if recognized, would impact the effective tax rate. Of the ~~$155,599~~$170.7 million ending gross unrecognized tax benefit balance as of June ~~30, 2012, $77,366~~28, 2014, $113.0 million relates to items which, if recognized, would impact the effective tax rate. As of June ~~29, 2013~~27, 2015 and June ~~30, 2012,~~28, 2014, gross interest and penalties payable was ~~$17,301~~$17.6 million and ~~$24,338,~~$18.0 million, respectively, which are included in ~~other~~Other liabilities. During fiscal ~~2013,~~2015, fiscal ~~2012~~2014 and fiscal ~~2011,~~2013, the Company recognized gross interest and penalty income of ~~$7,037, $10,920,~~$0.1 million, gross interest and ~~$73,~~penalty expense of $0.8 million and gross interest and penalty income of $7.0 million, respectively.

The Company files income tax returns in the U.S. federal jurisdiction, as well as various state and foreign jurisdictions. Tax examinations are currently in progress in select foreign and state jurisdictions that are extending the years open under the statutes of limitation. Fiscal years ~~2010~~2011 to present are open to examination in the U.S. federal jurisdiction, fiscal ~~2006~~2008 to present in select state jurisdictions and fiscal 2004 to present in select foreign jurisdictions. The Company anticipates that one or more of these audits may be finalized and certain statutes of limitation may expire in the foreseeable future. However, based on the status of these examinations, and the average time typically incurred in finalizing audits with the relevant tax authorities, we cannot reasonably estimate the impact these audits may have in the next 12 months, if any, to previously recorded uncertain tax positions. We accrue for certain known and reasonably anticipated income tax obligations after assessing the likely outcome based on the weight of available evidence. Although we believe that the estimates and assumptions we have used are reasonable and legally supportable, the final determination of tax audits could be different than that which is reflected in historical income tax provisions and recorded assets and liabilities. With respect to all jurisdictions, we believe we have made adequate provision for all income tax uncertainties.

For the years ended June ~~29, 2013~~27, 2015 and June ~~30, 2012,~~28, 2014, the Company had net operating loss carryforwards in foreign tax jurisdictions of ~~$340,893~~$618.3 million and ~~$263,782,~~$526.7 million, the majority of which can be carried forward indefinitely. The deferred tax assets related to the carryforwards have been reflected net of ~~$79,599~~$169.8 million and ~~$53,503~~$131.8 million valuation allowances at June ~~29, 2013~~27, 2015 and June ~~30, 2012,~~28, 2014, respectively. The Company’s valuation allowance increased by ~~$26,096~~$38.0 million in fiscal ~~2013~~2015 and ~~$31,702~~increased by $52.2 million in fiscal ~~2012,~~2014, primarily as the result of actual or anticipated results in the foreign jurisdictions.

The total amount of undistributed earnings of foreign subsidiaries as of June ~~29, 2013~~27, 2015 and June ~~30, 2012,~~28, 2014, was ~~$1,601,637~~$2.09 billion and ~~$1,203,949,~~$2.03 billion, respectively. It is the Company’s intention to permanently reinvest undistributed earnings of its foreign subsidiaries and thereby indefinitely postpone their remittance. Accordingly, no provision has been made for foreign withholding taxes or United States income taxes which may become payable if undistributed earnings of foreign subsidiaries are paid as dividends. Determination of the amount of unrecognized deferred income tax liabilities on these earnings is not practicable because such liability, if any, is subject to many variables and is dependent on circumstances existing if and when remittance occurs.

The Company maintains the Coach, Inc. Savings and Profit Sharing Plan, which is a defined contribution plan. Employees who meet certain eligibility requirements and are not part of a collective bargaining agreement may participate in this program. The annual expense incurred by ~~Coach~~the Company for this defined contribution plan was ~~$16,274, $18,641,~~$7.2 million, $7.5 million, and ~~$16,029~~$16.3 million in fiscal ~~2013,~~2015, fiscal ~~2012~~2014 and fiscal ~~2011,~~2013, respectively.

In fiscal ~~2013,~~2015, the Company ~~changed its~~has three reportable segments ~~to a geographic focus, recognizing the expansion and growth of sales through its international markets. This is consistent with organizational changes implemented during fiscal 2012.~~

~~Prior to this change, the Company was organized and reported its results~~ based on directly-operated and indirect business units. The Company has recently experienced substantial growth in its international business, while at the same time has converted formerly wholesale businesses in several key markets such as China, Taiwan and Korea to Company-operated businesses. Reflecting this growth and corresponding declines in indirect businesses relative to Company-operated, the Company implemented a realignment of its business ~~units based on geography, aligning with the organizational changes.~~

~~As of the end of the Company’s first quarter of fiscal 2013, the Company’s operations now reflect five operating segments aggregated into two reportable segments:~~

activities and organization:

In deciding how to allocate resources and assess performance, ~~Coach's~~the Company's chief operating decision maker regularly evaluates the sales and operating income of these segments. Operating income is the gross margin of the segment less direct expenses of the segment. Unallocated corporate expenses include inventory-related costs (such as production ~~variances,~~variances), advertising, marketing, design, administration and information systems, as well as distribution and consumer service expenses.

~~Prior year amounts have been reclassified to conform to~~ Additionally, costs incurred by the ~~current year presentation.~~

Company as described in Note 3, "Transformation and Other Actions," and certain acquisition-related costs are also included as unallocated corporate expenses. The following table summarizes segment performance for fiscal 2015, fiscal 2014 and fiscal 2013 (in millions):

Basic net income per share is calculated by dividing net income by the weighted-average number of shares outstanding during the period. Diluted net income per share is calculated similarly but includes potential dilution from the exercise of stock options and RSUs and any other potentially dilutive instruments, only in the periods in which such effects are dilutive under the treasury stock method.

The following is a reconciliation of the weighted-average shares outstanding and calculation of basic and diluted earnings per ~~share:~~

share (in millions, except per share data):

At June 27, 2015, options to purchase 5.9 million shares of common stock were outstanding but not included in the computation of diluted earnings per share, as these options’ exercise prices, ranging from $38.75 to $78.46, were greater than the average market price of the common shares.

At June 28, 2014, options to purchase 6.4 million shares of common stock were outstanding but not included in the computation of diluted earnings per share, as these options’ exercise prices, ranging from $43.39 to $78.46, were greater than the average market price of the common shares.

At June 29, 2013, options to purchase ~~2,145~~2.1 million shares of common stock were outstanding but not included in the computation of diluted earnings per share, as these options’ exercise prices, ranging from $56.95 to $78.46, were greater than the average market price of the common shares.

~~At June 30, 2012, options~~

Earnings per share amounts have been calculated based on unrounded numbers. Options to purchase ~~116~~ shares of the Company's common stock ~~were outstanding but not included in the computation of diluted earnings per share, as these options’~~at an exercise ~~prices, ranging from $72.06 to $78.46, were~~price greater than the average market price of the common ~~shares.~~

~~At July 2, 2011, options to purchase 55 shares of common~~ stock ~~were outstanding but~~during the reporting period are anti-dilutive and therefore not included in the computation of diluted ~~earnings~~net income per ~~share,~~common share. In addition, the Company has outstanding RSUs that are issuable only upon the achievement of certain performance goals. PRSUs are included in the computation of diluted shares only to the extent that the underlying performance conditions (and any applicable market condition modifiers) (i) are satisfied as ~~these options’ exercise prices, ranging from $59.97 to $60.28, were greater than the average market price~~ of the ~~common shares.~~

Purchases of ~~Coach’s~~the Company's common stock ~~are~~have been made from time to time, subject to market conditions and at prevailing market prices, through open market purchases. ~~Repurchased~~Under Maryland law, Coach’s state of incorporation, treasury shares ~~of common stock become authorized but unissued~~are not allowed. As a result, all repurchased shares ~~and may be issued in the future for general corporate and other purposes.~~are retired when acquired. The ~~Company may terminate or limit the~~Company's stock repurchase program expired at ~~any time.~~

the end of fiscal 2015, with zero remaining availability at June 27, 2015.

During fiscal ~~2013,~~2015, fiscal ~~2012,~~2014, and fiscal ~~2011,~~2013, the Company repurchased and retired ~~7,066, 10,688~~zero, 10.2 million and ~~20,404~~7.1 million shares, respectively, or ~~$400,000, $700,000,~~$0.0 million, $524.9 million, and ~~$1,098,000~~$400.0 million of common stock, respectively, at an average cost of ~~$56.61, $65.49~~$0.00, $51.27 and ~~$53.81~~$56.61 per share, respectively. ~~As of June 29, 2013, Coach had $1,361,627 remaining in the stock repurchase program.~~



Maryland		52-2242751
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)



Title of Each Class:		Name of Each Exchange on which Registered
Common Stock, par value $.01 per share		New York Stock Exchange



Documents		Form 10-K Reference
Proxy Statement for the ~~2013~~2015 Annual Meeting of Stockholders		Part III, Items 10 – 14




		Page Number
	PART I
Item 1.	Business	2
Item 1A.	Risk Factors	11
Item 1B.	Unresolved Staff Comments	20
Item 2.	Properties	21
Item 3.	Legal Proceedings	21
Item 4.	Mine Safety Disclosures	22
		2PART II
~~Item 1A.~~ ~~Risk Factors~~			12
~~Item 1B.~~ ~~Unresolved Staff Comments~~			20
~~Item 2.~~ ~~Properties~~			21
~~Item 3.~~ ~~Legal Proceedings~~			21
~~Item 4.~~ ~~Mine Safety Disclosures~~			22
~~PART II~~
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities			23
Item 6.	Selected Financial Data			26
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations			29
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk			4948
Item 8.	Financial Statements and Supplementary Data			5049
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	49
Item 9A.	Controls and Procedures	49
Item 9B.	Other Information	49
		50PART III
~~Item 9A.~~ ~~Controls and Procedures~~			50
~~Item 9B.~~ ~~Other Information~~			50
~~PART III~~
Item 10.	Directors, Executive Officers and Corporate Governance			5150
Item 11.	Executive Compensation			5150
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters			5150
Item 13.	Certain Relationships and Related Transactions, and Director Independence	50
Item 14.	Principal Accounting Fees and Services	50
		51PART IV
~~Item 14.~~ ~~Principal Accountant Fees and Services~~			51
~~PART IV~~
Item 15.	Exhibits, Financial Statement Schedules			5251
Signatures				5352



þ
x		ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934



o		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

	■
n	Fiscal 2009: Hong Kong, Macau and mainland China (“~~Coach~~Greater China”).


	Fiscal Year Ended
	June 29, 2013			June 30, 2012			July 2, 2011
Women's Handbags		58	%		61	%		63	%
Women's Accessories		23			24			25
Men's		11			8			5
All Other Products		8			7			7
Total		100	%		100	%		100	%



	Fiscal Year Ended
	June 27, 2015		June 28, 2014		June 29, 2013
Retail stores	258		332		351
Net decrease vs. prior year	(74	)	(19	)	(3	)
% decrease vs. prior year	(22.3	)%	(5.4	)%	(0.8	)%
Retail square footage	728,833		910,003		952,422
Net decrease vs. prior year	(181,170	)	(42,419	)	(6,677	)
% decrease vs. prior year	(19.9	)%	(4.5	)%	(0.7	)%
Average square footage	2,825		2,741		2,713



		Date
Category	Partner	Introduction	Expiration
Footwear	Jimlar Corporation	1999	2017
Eyewear	Luxottica⁽¹⁾	2012	2016
Watches	Movado	1998	2020
Fragrance	Estee Lauder⁽²⁾	2010	2015
Fragrance	Interparfums⁽²⁾	2015	2026

		~~Date~~
~~Category~~ ⁽¹⁾	The Luxottica licensing relationship is expected to automatically renew in June 2016 with a new expiration date in calendar year 2020.

	~~Partner~~		~~Introduction~~		~~Expiration~~
~~Footwear~~ ⁽²⁾		~~Jimlar~~		~~Spring '99~~		~~2015~~
~~Eyewear~~		~~Luxottica~~		~~Spring '12~~		~~2016~~
~~Watches~~		~~Movado~~		~~Spring '98~~		~~2015~~
~~Fragrance~~		The Estee Lauder		~~Spring '10~~		licensing relationship expired on June 30, 2015. Coach entered into a new licensing agreement with Interparfums in April 2015, expiring in June 2026.



Location	Use		Approximate Square Footage
Jacksonville, Florida		~~Distribution~~North America distribution and consumer service				850,000
New York, New York		Corporate, design, sourcing and product development				~~433,000~~	429,000⁽¹⁾
Carlstadt, New Jersey	Corporate offices	~~Corporate~~	65,000
New York, New York	Stuart Weitzman corporate, design, sourcing and product development		37,500		~~65,000~~
Tokyo, Japan		Coach Japan regional management		32,300		~~32,000~~
~~Dongguan, China~~		~~Sourcing, quality control and product development~~				~~27,000~~
Shanghai, China		~~Coach~~Greater China regional management		23,000		~~22,000~~
Hong Kong		~~Sourcing and quality control~~				~~17,000~~
~~Hong Kong~~		Coach Hong Kong regional management		18,100
South Korea	~~14,000~~Coach South Korea regional management		18,000
Shanghai, China	Coach Asia shared service center		17,700
Hong Kong	Corporate sourcing and quality control		17,000⁽²⁾
Dongguan, China	Corporate sourcing, quality control and product development		16,700
Ho Chi Minh City, Vietnam		~~Sourcing~~Corporate sourcing and quality control		10,200
Fort Lauderdale, Florida	~~11,000~~Stuart Weitzman corporate management		9,400
London	Coach Europe regional management		8,000
Taipei City, Taiwan		Coach Taiwan regional management		6,400
Malaysia	~~6,000~~
~~Hong Kong~~Coach Malaysia regional management	3,800	~~Sourcing and quality control~~				~~6,000~~
Singapore		Coach Singapore regional management		2,900		~~3,000~~
~~Seoul, South Korea~~		~~Sourcing~~				~~3,000~~
Beijing, China		~~Coach~~Greater China regional management		2,800		~~3,000~~
~~Pampanga,~~Clark, Philippines		~~Sourcing~~Corporate sourcing and quality control				2,400


~~Chennai, India~~	~~Sourcing and quality control~~	~~1,300~~
~~Long An, Vietnam~~	~~Sourcing and quality control~~	~~1,000~~
~~Luxembourg~~	~~Coach regional management~~	~~300~~


⁽¹⁾	Includes ~~250,000~~approximately 285,000 square feet related to ~~Coach owned~~Coach-owned buildings.


⁽²⁾	Represents a Coach-owned location.


	High		Low		Closing		Dividends Declared per Common Share
Fiscal 2013 Quarter ended:
September 29, 2012	$	63.24	$	48.24			$	0.300
December 29, 2012		60.33		52.20				0.300
March 30, 2013		61.94		45.87				0.300
June 29, 2013		60.12		48.76	$	57.09		0.338
Fiscal 2012 Quarter ended:
October 1, 2011	$	69.20	$	45.70			$	0.225
December 31, 2011		66.54		48.37				0.225
March 31, 2012		79.70		59.74				0.225
June 30, 2012		79.00		55.18	$	58.48		0.300



	High		Low		Closing		Dividends Declared per Common Share
Fiscal 2015 Quarter ended:
September 27, 2014	$	37.70	$	33.39			$	0.3375
December 27, 2014	37.60		32.72				0.3375
March 28, 2015	43.87		35.65				0.3375
June 27, 2015	43.45		34.00		$	36.12	0.3375

Fiscal 2014 Quarter ended:
September 28, 2013	$	59.58	$	51.53			$	0.3375
December 28, 2013	57.95		47.89				0.3375
March 29, 2014	56.72		44.31				0.3375
June 28, 2014	50.86		33.60		$	34.47	0.3375


	June-08		June-09		June-10		June-11		June-12		June-13
COH	$	100.00	$	93.33	$	128.25	$	227.23	$	211.03	$	210.61
Peer Set	$	100.00	$	77.18	$	117.44	$	188.18	$	201.95	$	286.72
S&P 500	$	100.00	$	73.79	$	84.43	$	110.35	$	116.36	$	140.32


Period	Total Number of Shares Purchased		Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs⁽¹⁾		Approximate Dollar Value of Shares that May Yet be Purchased Under the Plans or Programs⁽¹⁾
	(in thousands, except per share data)
Period 10 (3/31/13 – 5/4/13)		—	$	—		—	$	1,361,627
Period 11 (5/5/13 – 6/1/13)		—		—		—		1,361,627
Period 12 (6/2/13 – 6/29/13)		—		—		—		1,361,627
Total		—				—



	Fiscal Year Ended⁽¹⁾															Fiscal Year Ended⁽¹⁾
	June 29, 2013⁽²⁾⁽⁴⁾			June 30, 2012⁽²⁾⁽⁴⁾			July 2, 2011⁽²⁾			July 3, 2010			June 27, 2009⁽²⁾⁽⁴⁾			June 27, 2015⁽²⁾⁽⁴⁾			June 28, 2014⁽³⁾⁽⁴⁾			June 29, 2013⁽³⁾⁽⁴⁾			June 30, 2012⁽³⁾⁽⁴⁾			July 2, 2011⁽⁴⁾
Consolidated Statements of Income:
Net sales	$	5,075,390		$	4,763,180		$	4,158,507		$	3,607,636		$	3,230,468		$	4,191.6		$	4,806.2		$	5,075.4		$	4,763.2		$	4,158.5
Gross profit		3,698,148			3,466,078			3,023,541			2,633,691			2,322,610		2,908.6			3,297.0			3,698.1			3,466.1			3,023.5
Selling, general and administrative expenses		2,173,607			1,954,089			1,718,617			1,483,520			1,350,697
Selling, general and administrative ("SG&A") expenses																2,290.6			2,176.9			2,173.6			1,954.1			1,718.6
Operating income		1,524,541			1,511,989			1,304,924			1,150,171			971,913		618.0			1,120.1			1,524.5			1,512.0			1,304.9
Net income		1,034,420			1,038,910			880,800			734,940			623,369		402.4			781.3			1,034.4			1,038.9			880.8
Net income:
Per basic share	$	3.66		$	3.60		$	2.99		$	2.36		$	1.93		$	1.46		$	2.81		$	3.66		$	3.60		$	2.99
Per diluted share		3.61			3.53			2.92			2.33			1.91		1.45			2.79			3.61			3.53			2.92
Weighted-average basic shares outstanding		282,494			288,284			294,877			311,413			323,714		275.7			277.8			282.5			288.3			294.9
Weighted-average diluted shares outstanding		286,307			294,129			301,558			315,848			325,620		277.2			280.4			286.3			294.1			301.6
Dividends declared per common share⁽³⁾	$	1.238		$	0.975		$	0.675		$	0.375		$	0.075
Dividends declared per common share																$	1.350		$	1.350		$	1.238		$	0.975		$	0.675

Consolidated Percentage of Net Sales Data:
Gross margin		72.9	%		72.8	%		72.7	%		73.0	%		71.9	%	69.4		%	68.6		%	72.9		%	72.8		%	72.7		%
Selling, general and administrative expenses		42.8	%		41.0	%		41.3	%		41.1	%		41.8	%
SG&A expenses																54.6		%	45.3		%	42.8		%	41.0		%	41.3		%
Operating margin		30.0	%		31.7	%		31.4	%		31.9	%		30.1	%	14.7		%	23.3		%	30.0		%	31.7		%	31.4		%
Net income		20.4	%		21.8	%		21.2	%		20.4	%		19.3	%	9.6		%	16.3		%	20.4		%	21.8		%	21.2		%

Consolidated Balance Sheet Data:
Working capital	$	1,348,437		$	1,086,368		$	859,371		$	773,605		$	936,757		$	1,671.8		$	1,042.1		$	1,348.4		$	1,086.4		$	859.4
Total assets		3,531,897			3,104,321			2,635,116			2,467,115			2,564,336		4,666.9			3,663.1			3,531.9			3,104.3			2,635.1
Cash, cash equivalents and investments		1,332,231			923,215			712,754			702,398			806,362		1,931.8			1,353.1			1,332.2			923.2			712.8
Inventory		524,706			504,490			421,831			363,285			326,148		485.1			526.2			524.7			504.5			421.8
Long-term debt		485			985			23,360			24,159			25,072
Total debt																890.4			140.5			1.0			23.4			24.2
Stockholders' equity		2,409,158			1,992,931			1,612,569			1,505,293			1,696,042		2,489.9			2,420.6			2,409.2			1,992.9			1,612.6



	Fiscal Year Ended⁽¹⁾
	June 27, 2015⁽²⁾	June 28, 2014⁽³⁾	June 29, 2013⁽³⁾	June 30, 2012⁽³⁾	July 2, 2011
Coach Operated Store Data:
Stores open at fiscal year-end:
North American retail stores	258	332	351	354	345
North American outlet stores	204	207	193	169	143
Coach International	503	475	409	368	311
Stuart Weitzman stores	54	—	—	—	—
Total stores open at fiscal year-end	1,019	1,014	953	891	799

Store square footage at fiscal year-end:
North American retail stores	728,833	910,003	952,422	959,099	936,277
North American outlet stores	1,189,018	1,132,714	982,202	789,699	649,094
Coach International	1,030,695	918,995	768,567	665,396	544,798
Stuart Weitzman stores	91,101	—	—	—	—
Total store square footage at fiscal year-end	3,039,647	2,961,712	2,703,191	2,414,194	2,130,169

Average store square footage at fiscal year-end:
North American retail stores	2,825	2,741	2,713	2,709	2,714
North American outlet stores	5,829	5,472	5,089	4,673	4,539
Coach International	2,049	1,935	1,879	1,808	1,752
Stuart Weitzman stores	1,687	—	—	—	—


⁽¹⁾	~~Coach’s~~The Company’s fiscal year ends on the Saturday closest to June 30. Fiscal years 2015, 2014, 2013, 2012 ~~2011,~~ and ~~2009~~2011 were each 52-week years. ~~Fiscal year 2010 was a 53-week year.~~


⁽²⁾	~~During~~The Company acquired Stuart Weitzman in the fourth quarter of fiscal 2015.


⁽³⁾	The Company acquired its international businesses from its former distributors as follows: fiscal 2014 — the remaining 50% interest in Europe; fiscal 2013 — Malaysia and South Korea; fiscal 2012 — Singapore and Taiwan.


	Fiscal 2013
								Net Income
	Gross Profit		SG&A			Operating Income		Amount		Per Diluted Share
As Reported: (GAAP Basis)	$	3,698,148	$	2,173,607		$	1,524,541	$	1,034,420	$	3.61
Excluding items affecting comparability		4,800		(48,402	)		53,202		32,568		0.11
Adjusted: (Non-GAAP Basis)	$	3,702,948	$	2,125,205		$	1,577,743	$	1,066,988	$	3.73


	Fiscal 2012
						Net Income
	SG&A			Operating Income		Amount		Per Diluted Share
As Reported: (GAAP Basis)	$	1,954,089		$	1,511,989	$	1,038,910	$	3.53
Excluding items affecting comparability		(39,209	)		39,209		0		0.00
Adjusted: (Non-GAAP Basis)	$	1,914,880		$	1,551,198	$	1,038,910	$	3.53


	Fiscal 2011
						Net Income
	SG&A			Operating Income		Amount		Per Diluted Share
As Reported: (GAAP Basis)	$	1,718,617		$	1,304,924	$	880,800	$	2.92
Excluding items affecting comparability		(25,678	)		25,678		0		0.00
Adjusted: (Non-GAAP Basis)	$	1,692,939		$	1,330,602	$	880,800	$	2.92

Large accelerated filer þ

Accelerated filer o

Non-accelerated filer o

~~Large accelerated filer~~
x

~~Accelerated filer~~o

~~Non-accelerated filer~~o

Smaller reporting companyo


	Fiscal 2009
						Net Income
	SG&A			Operating Income		Amount			Per Diluted Share
As Reported: (GAAP Basis)	$	1,350,697		$	971,913	$	623,369		$	1.91
Excluding items affecting comparability⁽⁵⁾		(28,365	)		28,365		(1,241	)		0.00
Adjusted: (Non-GAAP Basis)	$	1,322,332		$	1,000,278	$	622,128		$	1.91



								Net Income
Fiscal 2015	Gross Profit		SG&A			Operating Income		Amount		Per Diluted Share
As Reported: (GAAP Basis)	$	2,908.6	$	2,290.6		$	618.0	$	402.4	$	1.45
Excluding items affecting comparability	9.7		(160.8		)	170.5		128.8		0.47
Adjusted: (Non-GAAP Basis)	$	2,918.3	$	2,129.8		$	788.5	$	531.2	$	1.92

								Net Income
Fiscal 2014	Gross Profit		SG&A			Operating Income		Amount		Per Diluted Share
As Reported: (GAAP Basis)	$	3,297.0	$	2,176.9		$	1,120.1	$	781.3	$	2.79
Excluding items affecting comparability	82.2		(49.3		)	131.5		88.3		0.31
Adjusted: (Non-GAAP Basis)	$	3,379.2	$	2,127.6		$	1,251.6	$	869.6	$	3.10

								Net Income
Fiscal 2013	Gross Profit		SG&A			Operating Income		Amount		Per Diluted Share
As Reported: (GAAP Basis)	$	3,698.1	$	2,173.6		$	1,524.5	$	1,034.4	$	3.61
Excluding items affecting comparability	4.8		(48.4		)	53.2		32.6		0.11
Adjusted: (Non-GAAP Basis)	$	3,702.9	$	2,125.2		$	1,577.7	$	1,067.0	$	3.73

								Net Income
Fiscal 2012	Gross Profit		SG&A			Operating Income		Amount		Per Diluted Share
As Reported: (GAAP Basis)	$	3,466.1	$	1,954.1		$	1,512.0	$	1,038.9	$	3.53
Excluding items affecting comparability	—		(39.2		)	39.2		—		—
Adjusted: (Non-GAAP Basis)	$	3,466.1	$	1,914.9		$	1,551.2	$	1,038.9	$	3.53

								Net Income
Fiscal 2011	Gross Profit		SG&A			Operating Income		Amount		Per Diluted Share
As Reported: (GAAP Basis)	$	3,023.5	$	1,718.6		$	1,304.9	$	880.8	$	2.92
Excluding items affecting comparability	—		(25.7		)	25.7		—		—
Adjusted: (Non-GAAP Basis)	$	3,023.5	$	1,692.9		$	1,330.6	$	880.8	$	2.92



	June 27, 2015
	GAAP Basis (As Reported)		Transformation and Other Actions			Acquisition-Related Costs			Acquisition-Related Purchase Accounting			Non-GAAP Basis (Excluding Items)
	(dollars in millions, except per share data)
Gross profit	$	2,908.6	$	(5.0	)	$	—		$	(4.7	)	$	2,918.3
SG&A expenses	2,290.6		140.9			17.1			2.8			2,129.8
Operating income	618.0		(145.9		)	(17.1		)	(7.5		)	788.5
Income before provision for income taxes	611.6		(145.9		)	(17.1		)	(7.5		)	782.1
Provision for income taxes	209.2		(38.1		)	(3.6		)	—			250.9
Net income	402.4		(107.8		)	(13.5		)	(7.5		)	531.2
Diluted net income per share	1.45		(0.39		)	(0.05		)	(0.03		)	1.92



	Fiscal Year Ended
	Total Net Sales				Rate of Change			Percentage of Total Net Sales
	June 27, 2015		June 28, 2014		Rate of Change			June 27, 2015		June 28, 2014
	(dollars in millions)
North America	$	2,467.5	$	3,100.5	(20.4	)	%	58.9	%	64.5	%
International	1,622.0		1,644.2		(1.3	)		38.7		34.2
Other⁽¹⁾	102.1		61.5		66.0			2.4		1.3
Total net sales	$	4,191.6	$	4,806.2	(12.8	)	%	100.0	%	100.0	%


⁽¹⁾	Net sales in the Other category consists of Coach brand ancillary channels in fiscal 2015, including licensing and disposition, and sales generated by the Stuart Weitzman brand during the final two months of fiscal 2015.


⁽¹⁾	Operating income in the Other category consists of sales and expenses in Coach brand ancillary channels in fiscal 2015, including licensing and disposition, and sales and expenses generated by the Stuart Weitzman brand during the final two months of fiscal 2015.


	June 29, 2013
	GAAP Basis (As Reported)		Restructuring and Transformation			Non-GAAP Basis (Excluding Items)
Gross profit	$	3,698.1	$	(4.8	)	$	3,702.9
Selling, general and administrative expenses	$	2,173.6	$	48.4		$	2,125.2
Operating income	$	1,524.5	$	(53.2	)	$	1,577.7
Income before provision for income taxes	$	1,520.5	$	(53.2	)	$	1,573.7
Provision for income taxes	$	486.1	$	(20.6	)	$	506.7
Net income	$	1,034.4	$	(32.6	)	$	1,067.0
Diluted net income per share	$	3.61	$	(0.11	)	$	3.73


	June 30, 2012
	GAAP Basis (As Reported)		Tax Adjustment			Charitable Contribution			Non-GAAP Basis (Excluding Items)		June 28, 2014
Selling, general and administrative expenses	$	1,954.1	$	—		$	39.2		$	1,914.9
											GAAP Basis (As Reported)		Transformation and Other Related Actions			Non-GAAP Basis (Excluding Items)
Gross profit											$	3,297.0	$	(82.2	)	$	3,379.2
SG&A expenses											2,176.9		49.3			2,127.6
Operating income	$	1,512.0	$	—		$	(39.2	)	$	1,551.2	1,120.1		(131.5		)	1,251.6
Income before provision for income taxes	$	1,505.7	$	—		$	(39.2	)	$	1,544.9	1,122.3		(131.5		)	1,253.8
Provision for income taxes	$	466.8	$	(23.9	)	$	(15.3	)	$	506.0	341.0		(43.2		)	384.2
Net income	$	1,038.9	$	23.9		$	(23.9	)	$	1,038.9	781.3		(88.3		)	869.6
Diluted net income per share	$	3.53	$	0.08		$	(0.08	)	$	3.53	2.79		(0.31		)	3.10



	June 29, 2013
	GAAP Basis (As Reported)		Restructuring and Transformation-Related Charges			Non-GAAP Basis (Excluding Items)
Gross profit	$	3,698.1	$	(4.8	)	$	3,702.9
SG&A expenses	2,173.6		48.4			2,125.2
Operating income	1,524.5		(53.2		)	1,577.7
Income before provision for income taxes	1,520.5		(53.2		)	1,573.7
Provision for income taxes	486.1		(20.6		)	506.7
Net income	1,034.4		(32.6		)	1,067.0
Diluted net income per share	3.61		(0.11		)	3.73


⁽²⁾	Net sales in the ~~other~~Other category ~~which is not a reportable segment, consists~~consisted of sales generated in ancillary channels, including licensing and disposition.