10-Q

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

_____________________

FORM 10-Q

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended October 1, 2011

or

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

Commission file number: 1-16153

________________________

Coach, Inc.

(Exact name of registrant as specified in its charter)

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

516 West 34th Street, New York, NY  10001

(Address of principal executive offices);  (Zip Code)

(212) 594-1850

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. [ü] Yes    [   ] No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  Yes [ü] No [   ]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.  See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer [ü]	Accelerated Filer [  ]
Non-accelerated filer [  ] (Do not check if a smaller reporting company)	Smaller Reporting Company [  ]

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

[  ] Yes  [ü] No

On October 28, 2011, the Registrant had 291,826,211 outstanding shares of common stock, which is the Registrant’s only class of common stock.

The document contains 35 pages excluding exhibits.

1

COACH, INC.

TABLE OF CONTENTS

		Page Number
PART I – FINANCIAL INFORMATION
ITEM 1.	Financial Statements
	Condensed Consolidated Balance Sheets –
	At October 1, 2011 and July 2, 2011	4
	Condensed Consolidated Statements of Income –
	For the Quarters Ended
	October 1, 2011 and October 2, 2010	5
	Condensed Consolidated Statements of Cash Flows –
	For the Quarters Ended
	October 1, 2011 and October 2, 2010	6
	Notes to Condensed Consolidated Financial Statements	7
ITEM 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	21
ITEM 3.	Quantitative and Qualitative Disclosures about Market Risk	31
ITEM 4.	Controls and Procedures	32
PART II – OTHER INFORMATION
ITEM 1.	Legal Proceedings	33
ITEM 1A.	Risk Factors	33
ITEM 2.	Unregistered Sales of Equity Securities and Use of Proceeds	33
ITEM 6.	Exhibits	34
SIGNATURE		35

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SPECIAL NOTE ON FORWARD-LOOKING INFORMATION

This Form 10-Q contains certain “forward-looking statements,” based on current expectations, that involve risks and uncertainties that could cause our actual results to differ materially from our management’s current expectations.  These forward-looking statements can be identified by the use of forward-looking terminology such as “believe,” “may,” “will,” “should,” “expect,” “intend,” “estimate,” “are positioned to,” “continue,” “project,” “guidance,” “target,” “forecast,” “anticipated,” “plan,” “potential,” the negative of these terms or comparable terms.  Future results will vary from historical results and historical growth is not indicative of future trends, which will depend upon a number of factors, including but not limited to: (i) the successful execution of our growth strategies; (ii) the effect of existing and new competition in the marketplace; (iii) our exposure to international risks, including currency fluctuations; (iv) changes in economic or political conditions in the markets where we sell or source our products; (v) our ability to successfully anticipate consumer preferences for accessories and fashion trends; (vi) our ability to control costs; (vii) the effect of seasonal and quarterly fluctuations in our sales on our operating results; (viii) our ability to protect against infringement of our trademarks and other proprietary rights; and such other risk factors as set forth in the Company’s Annual Report on Form 10-K for the fiscal year ended July 2, 2011.  Coach, Inc. assumes no obligation to revise or update any such forward-looking statements for any reason, except as required by law.

WHERE YOU CAN FIND MORE INFORMATION

Coach’s quarterly financial results and other important information are available by calling the Investor Relations Department at (212) 629-2618.

Coach maintains a website at www.coach.com where investors and other interested parties may obtain, free of charge, press releases and other information as well as gain access to our periodic filings with the SEC.

3

PART I – FINANCIAL INFORMATION

ITEM 1.  Financial Statements

COACH, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(amounts in thousands, except share data)

(unaudited)

	October 1,			July 2,
	2011			2011
ASSETS
Current Assets:
Cash and cash equivalents	$	845,719		$	699,782
Short-term investments		2,256			2,256
Trade accounts receivable, less allowances of $9,937 and $9,544, respectively		153,061			142,898
Inventories		519,586			421,831
Other current assets		168,526			185,621
Total current assets		1,689,148			1,452,388
Property and equipment, net		586,914			582,348
Goodwill		351,978			331,004
Other assets		250,038			269,376
Total assets	$	2,878,078		$	2,635,116
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable	$	144,244		$	118,612
Accrued liabilities		486,329			473,610
Current portion of long-term debt		800			795
Total current liabilities		631,373			593,017
Long-term debt		23,264			23,360
Other liabilities		406,938			406,170
Total liabilities		1,061,575			1,022,547
See note on commitments and contingencies
Stockholders' Equity:
Preferred stock: (authorized 25,000,000 shares; $0.01 par value) none issued		-			-
Common stock: (authorized 1,000,000,000 shares; $0.01 par value) issued
and outstanding - 291,310,968 and 288,514,529 shares, respectively		2,914			2,886
Additional paid-in-capital		2,106,830			2,000,426
Accumulated deficit		(354,971	)		(445,654	)
Accumulated other comprehensive income		61,730			54,911
Total stockholders' equity		1,816,503			1,612,569
Total liabilities and stockholders' equity	$	2,878,078		$	2,635,116

See accompanying Notes to Condensed Consolidated Financial Statements.

4

COACH, INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(amounts in thousands, except per share data)

(unaudited)

	Quarter Ended
	October 1,			October 2,
	2011			2010
Net sales	$	1,050,359		$	911,669
Cost of sales		285,706			235,498
Gross profit		764,653			676,171
Selling, general and administrative expenses		442,687			390,511
Operating income		321,966			285,660
Interest income, net		114			248
Other expense		(1,476	)		(810	)
Income before provision for income taxes		320,604			285,098
Provision for income taxes		105,621			96,222
Net income	$	214,983		$	188,876
Net income per share
Basic	$	0.74		$	0.64
Diluted	$	0.73		$	0.63
Shares used in computing net income per share
Basic		289,778			296,304
Diluted		296,068			301,249

See accompanying Notes to Condensed Consolidated Financial Statements.

5

COACH, INC.

 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

 (amounts in thousands)

 (unaudited)

	Quarter Ended
	October 1,			October 2,
	2011			2010
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	214,983		$	188,876
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		32,054			32,251
Provision for bad debt		3,083			2,015
Share-based compensation		24,606			22,342
Excess tax benefit from share-based awards		(14,969	)		(2,587	)
Deferred income taxes		34,289			9,896
Other, net		1,366			(4,408	)
Changes in operating assets and liabilities:
Increase in trade accounts receivable		(10,816	)		(23,749	)
Increase in inventories		(102,017	)		(97,681	)
Decrease in other assets		7,224			4,443
Increase (decrease)  in accounts payable		24,646			(1,935	)
Increase in accrued liabilities		1,234			15,093
Increase in other liabilities		9,283			32,900
Net cash provided by operating activities		224,966			177,456
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of interest in equity method investment		-			(776	)
Acquisition of distributor		(7,595	)		-
Purchases of property and equipment		(30,895	)		(23,080	)
Purchases of investments		-			(90,592	)
Proceeds from maturities and sales of investments		-			99,928
Net cash used in investing activities		(38,490	)		(14,520	)
CASH FLOWS FROM FINANCING ACTIVITIES
Dividend payment		(65,253	)		(44,774	)
Repurchase of common stock		(59,000	)		(137,500	)
Repayment of long-term debt		(91	)		(86	)
Proceeds from share-based awards, net		66,868			39,477
Excess tax benefit from share-based awards		14,969			2,587
Net cash used in financing activities		(42,507	)		(140,296	)
Effect of changes in foreign exchange rates on cash and cash equivalents		1,968			2,261
Increase in cash and cash equivalents		145,937			24,901
Cash and cash equivalents at beginning of period		699,782			596,470
Cash and cash equivalents at end of period	$	845,719		$	621,371

See accompanying Notes to Condensed Consolidated Financial Statements.

6

COACH, INC.

Notes to Condensed Consolidated Financial Statements

(dollars and shares in thousands, except per share data)

(unaudited)

1. Basis of Presentation and Organization

The accompanying unaudited condensed consolidated financial statements include the accounts of Coach, Inc. (“Coach” or the “Company”) and all 100% owned subsidiaries.  These condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”).  Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted from this report as is permitted by SEC rules and regulations.  However, the Company believes that the disclosures are adequate to make the information presented not misleading.  This report should be read in conjunction with the audited consolidated financial statements and notes thereto, included in the Company’s Annual Report on Form 10-K filed with the SEC for the year ended July 2, 2011 (“fiscal 2011”).

In the opinion of management, the accompanying unaudited condensed consolidated financial statements contain all normal and recurring adjustments necessary to present fairly the consolidated financial position, results of operations and changes in cash flows of the Company for the interim periods presented.  The results of operations for the quarter ended October 1, 2011 are not necessarily indicative of results to be expected for the entire fiscal year, which will end on June 30, 2012 (“fiscal 2012”).

The Company evaluated subsequent events through the date these financial statements were issued, and concluded there were no events to recognize or disclose.

2. Acquisition

On July 3, 2011, Coach acquired 100% of its domestic retail business in Singapore from the former distributor, Valiram Group, for an aggregate purchase price of $7,595. The results of the acquired business have been included in the consolidated financial statements since July 3, 2011 within the Direct-to-Consumer segment. This acquisition will provide the Company with greater control over the brand in Singapore, enabling Coach to raise brand awareness and grow market share with regional consumers.

The following table summarizes the estimated fair values of the assets acquired as of the date of acquisition:

Assets Acquired	Estimated Fair Value at July 3, 2011
Current assets	$	1,684
Fixed assets		619
Goodwill		5,292
Total assets acquired	$	7,595

Prior to this acquisition, Valiram Group operated five retail and department store locations in Singapore. Management believes the strength of these established locations supported a premium above the fair value of the individual assets acquired.  Unaudited pro forma information related to these acquisitions is not included as the impact of this transaction is not material to the consolidated results of the Company.

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COACH, INC.

Notes to Condensed Consolidated Financial Statements

(dollars and shares in thousands, except per share data)

(unaudited)

During October 2011, the Company entered into an agreement to acquire 100% of its domestic retail business in Taiwan from the current distributor, with the transition expected in early January 2012.

3. Stockholders’ Equity

Activity for the quarters ended October 1, 2011 and October 2, 2010 in the accounts of Stockholders’ Equity is summarized below:

	Common Stockholders' Equity			Additional Paid-in- Capital		Accumulated Deficit			Accumulated Other Comprehensive Income			Total Stockholders' Equity
Balances at July 3, 2010	$	2,969		$	1,502,982	$	(30,053	)	$	29,395		$	1,505,293
Net income		-			-		188,876			-			188,876
Unrealized losses on cash flow hedging derivatives, net of tax		-			-		-			(5,364	)		(5,364	)
Translation adjustments		-			-		-			11,256			11,256
Comprehensive income													194,768
Shares issued for stock options and employee benefit plans		24			39,453		-			-			39,477
Share-based compensation		-			22,342		-			-			22,342
Excess tax benefit from share-based compensation		-			2,587		-			-			2,587
Repurchase of common stock		(36	)		-		(137,464	)		-			(137,500	)
Dividend declared		-			-		(44,294	)		-			(44,294	)
Balances at October 2, 2010	$	2,957		$	1,567,364	$	(22,935	)	$	35,287		$	1,582,673
Balances at July 2, 2011	$	2,886		$	2,000,426	$	(445,654	)	$	54,911		$	1,612,569
Net income		-			-		214,983			-			214,983
Unrealized losses on cash flow hedging derivatives, net of tax		-			-		-			(565	)		(565	)
Translation adjustments		-			-		-			7,384			7,384
Comprehensive income													221,802
Shares issued for stock options and employee benefit plans		39			66,829		-			-			66,868
Share-based compensation		-			24,606		-			-			24,606
Excess tax benefit from share-based compensation		-			14,969		-			-			14,969
Repurchase of common stock		(11	)		-		(58,989	)		-			(59,000	)
Dividend declared		-			-		(65,311	)		-			(65,311	)
Balances at October 1, 2011	$	2,914		$	2,106,830	$	(354,971	)	$	61,730		$	1,816,503

The components of accumulated other comprehensive income, as of the dates indicated, are as follows:

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COACH, INC.

Notes to Condensed Consolidated Financial Statements

(dollars and shares in thousands, except per share data)

(unaudited)

	October 1,			July 2,
	2011			2011
Cumulative translation adjustments	$	66,796		$	59,412
Cumulative effect of previously adopted accounting pronouncements and minimum pension liability, net of taxes		(3,036	)		(3,036	)
Net unrealized losses on cash flow hedging derivatives, net of taxes of $2,222 and $899		(2,030	)		(1,465	)
Accumulated other comprehensive income	$	61,730		$	54,911

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COACH, INC.

Notes to Condensed Consolidated Financial Statements

(dollars and shares in thousands, except per share data)

(unaudited)

4. Earnings Per Share

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 employee benefit and share awards.

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

	Quarter Ended
	October 1,		October 2,
	2011		2010
Net income	$	214,983	$	188,876
Total weighted-average basic shares		289,778		296,304
Dilutive securities:
Employee benefit and share award plans		1,534		1,380
Stock option programs		4,756		3,565
Total weighted-average diluted shares		296,068		301,249
Net income per share:
Basic	$	0.74	$	0.64
Diluted	$	0.73	$	0.63

At October 1, 2011, options to purchase 2,067 shares of common stock were outstanding but not included in the computation of diluted earnings per share, as these options’ exercise prices, ranging from $59.97 to $66.76, were greater than the average market price of the common shares.

At October 2, 2010, options to purchase 7,235 shares of common stock were outstanding but not included in the computation of diluted earnings per share, as these options’ exercise prices, ranging from $38.41 to $51.56, were greater than the average market price of the common shares.

10

COACH, INC.

Notes to Condensed Consolidated Financial Statements

(dollars and shares in thousands, except per share data)

(unaudited)

5. Share-Based Compensation

The following table shows the total compensation cost charged against income for share-based compensation plans and the related tax benefits recognized in the income statement for the periods indicated:

	Quarter Ended
	October 1,		October 2,
	2011		2010
Share-based compensation expense	$	24,606	$	22,342
Income tax benefit related to share-based compensation expense		7,208		7,828

Stock Options

A summary of option activity under the Coach stock option plans as of October 1, 2011 and changes during the period then ended is as follows:

	Number of Options Outstanding			Weighted- Average Exercise Price
Outstanding at July 2, 2011		16,832		$	31.73
Granted		2,074			61.71
Exercised		(2,856	)		31.94
Forfeited or expired		(143	)		36.08
Outstanding at October 1, 2011		15,907			35.58
Vested and expected to vest at October 1, 2011		15,777			32.35
Exercisable at October 1, 2011		9,930			29.88

At October 1, 2011, $61,029 of total unrecognized compensation cost related to non-vested stock option awards is expected to be recognized over a weighted-average period of 1.1 years.

The weighted-average grant-date fair value of individual options granted during the first quarter of fiscal 2012 and fiscal 2011 was $15.34 and $11.17, respectively.  The total intrinsic value of options exercised during the first quarter of fiscal 2012 and fiscal 2011 was $69,909 and $21,361, respectively.  During the first quarter of fiscal 2012 and fiscal 2011 the total cash received from these option exercises was $91,219 and $50,117, respectively, and the actual tax benefit realized from these option exercises was $26,611 and $7,892, respectively.

11

COACH, INC.

Notes to Condensed Consolidated Financial Statements

(dollars and shares in thousands, except per share data)

(unaudited)

Share Unit Awards

The grant-date fair value of each Coach share unit award is equal to the fair value of Coach stock at the grant date.  The following table summarizes information about non-vested share units as of and for the period ended October 1, 2011:

	Number of Non-vested Share Units			Weighted- Average Grant- Date Fair Value
Non-vested at July 2, 2011		4,321		$	33.81
Granted		1,393			61.03
Vested		(1,276	)		31.07
Forfeited		(117	)		32.28
Non-vested at October 1, 2011		4,321			43.06

At October 1, 2011, $135,482 of total unrecognized compensation cost related to non-vested share awards is expected to be recognized over a weighted-average period of 1.2 years.

The weighted-average grant-date fair value of share awards granted during the first quarter of fiscal 2012 and fiscal 2011 was $61.03 and $38.45, respectively.  The total fair value of shares vested during the first quarter of fiscal 2012 and fiscal 2011 was $73,330 and $34,608, respectively.

6. Fair Value Measurements

In accordance with Accounting Standards Codification (“ASC”) 820-10, “Fair Value Measurements and Disclosures,” the Company 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.  Coach currently does not have any Level 1 financial 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.

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COACH, INC.

Notes to Condensed Consolidated Financial Statements

(dollars and shares in thousands, except per share data)

(unaudited)

The following table shows the fair value measurements of the Company’s assets and liabilities at October 1, 2011 and July 2, 2011:

	Level 2				Level 3
	October 1,		July 2,		October 1,		July 2,
	2011		2011		2011		2011
Assets:
Long-term investment - auction rate security (a)	$	-	$	-	$	6,000	$	6,000
Derivative assets -  zero-cost collar options (b)		2,924		2,020		-		-
Total	$	2,924	$	2,020	$	6,000	$	6,000
Liabilities:
Derivative liabilities - zero-cost collar options (b)	$	5,257	$	1,062	$	-	$	-
Derivative liabilities - cross-currency swap (c)		-		-		6,141		651
Total	$	5,257	$	1,062	$	6,141	$	651

(a) The fair value of the security is determined using a model that takes into consideration the financial conditions of the issuer and the bond insurer, current market conditions and the value of the collateral bonds.

(b) The Company enters into zero-cost collar options to manage its exposure to foreign currency exchange rate fluctuations resulting from Coach Japan's and Coach Canada’s U.S. dollar-denominated inventory purchases.  The fair value of these cash flow hedges is primarily based on the forward curves of the specific indices upon which settlement is based and includes an adjustment for the counterparty’s or Company’s credit risk.

(c) The Company is a party to a cross-currency swap transaction to manage its exposure to foreign currency exchange rate fluctuations resulting from Coach Japan's U.S. dollar-denominated fixed rate intercompany loan.  The fair value of this cash flow hedge is primarily based on the forward curves of the specific indices upon which settlement is based and includes an adjustment for the Company's credit risk.

As of October 1, 2011 and July 2, 2011, the Company’s investments included an auction rate security (“ARS”), deemed a long-term investment classified within other assets, as the auction for this security has been unsuccessful.  The underlying investments of the ARS are scheduled to mature in 2035.  We have determined that the significant majority of the inputs used to value this security fall within Level 3 of the fair value hierarchy as the inputs are based on unobservable estimates.  The fair value of the Company’s ARS has been $6,000 since the end of the second quarter of fiscal 2009.

As of October 1, 2011 and July 2, 2011, the fair value of the Company’s cross-currency swap derivatives were included within accrued liabilities.  The Company uses a management model to value these derivatives, which includes a combination of observable inputs, such as tenure of the agreement and notional amount and unobservable inputs, such as the Company’s credit rating.  The table below presents the changes in the fair value of the cross-currency swaps during the first three months of fiscal 2012 and 2011:

13

COACH, INC.

Notes to Condensed Consolidated Financial Statements

(dollars and shares in thousands, except per share data)

(unaudited)

	Cross-Currency Swaps
Balance at July 2, 2011	$	651
Unrealized loss, recorded in accumulated other comprehensive income		5,490
Balance at October 1, 2011	$	6,141
Balance at July 3, 2010	$	2,418
Unrealized loss, recorded in accumulated other comprehensive income		6,905
Balance at October 2, 2010	$	9,323

The Company’s short-term investments of $2,256 and $90,592 as of October 1, 2011 and July 2, 2011, respectively, consist of U.S. treasury bills and commercial paper which are classified as held-to-maturity based on our positive intent and ability to hold the securities to maturity.  They are stated at amortized cost, which approximates fair market value due to their short maturities.

7. Commitments and Contingencies

At October 1, 2011, the Company had letters of credit available of $300,000, of which $167,209 were outstanding.  The letters of credit, which expire at various dates through 2014, primarily collateralize the Company’s obligation to third parties for the purchase of inventory.

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

14

COACH, INC.

Notes to Condensed Consolidated Financial Statements

(dollars and shares in thousands, except per share data)

(unaudited)

8. Derivative Instruments and Hedging Activities

Substantially all purchases and sales involving international parties are denominated in U.S. dollars, which limits the Company’s exposure to foreign currency exchange rate fluctuations.  However, the Company is exposed to market risk from foreign currency exchange risk related to Coach Japan’s and Coach Canada’s U.S. dollar-denominated inventory purchases and Coach Japan’s $109,110 U.S. dollar-denominated fixed rate intercompany loan.  Coach uses derivative financial instruments to manage these risks.  These derivative transactions are in accordance with the Company’s risk management policies.  Coach does not enter into derivative transactions for speculative or trading purposes.

Coach Japan and Coach Canada enter into certain foreign currency derivative contracts, primarily zero-cost collar options, to manage the exchange rate risk related to their inventory purchases.  As of October 1, 2011 and July 2, 2011, $168,993 and $171,030 of foreign currency forward contracts were outstanding, respectively.

Coach Japan’s cross currency swap transaction requires an exchange of a yen fixed interest rate for a U.S. dollar fixed interest rate and an exchange of yen and U.S. dollar based notional values at maturity on December 29, 2011.

The Company’s derivative instruments are designated as cash flow hedges. The effective portion of gains or losses on the derivative instruments are reported as a component of other comprehensive income and reclassified into earnings in the same periods during which the hedged transaction affects earnings. The ineffective portion of gains or losses on the derivative instruments are recognized in current earnings and are included within net cash provided by operating activities.

15

COACH, INC.

Notes to Condensed Consolidated Financial Statements

(dollars and shares in thousands, except per share data)

(unaudited)

The following tables provide information related to the Company’s derivatives:

Derivatives Designated as Hedging	Balance Sheet	Fair Value
Instruments	Classification	At October 2, 2011		At July 2, 2011
Foreign exchange contracts	Other Current Assets	$	2,924	$	2,020
Total derivative assets		$	2,924	$	2,020
Foreign exchange contracts	Accrued Liabilities	$	11,398	$	1,713
Total derivative liabilities		$	11,398	$	1,713

	Amount of Loss Recognized in OCI on Derivatives (Effective Portion)
	Quarter Ended
Derivatives in Cash Flow	October 1,			October 2,
Hedging Relationships	2011			2010
Foreign exchange contracts	$	(2,332	)	$	(5,816	)
Total	$	(2,332	)	$	(5,816	)

For the first quarter of fiscal 2012 and fiscal 2011, the amounts above are net of tax of $2,469 and $3,882, respectively.

	Amount of Loss Reclassified from Accumulated OCI into Income (Effective Portion)
Location of Loss Reclassified	Quarter Ended
from Accumulated OCI into	October 1,			October 2,
Income (Effective Portion)	2011			2010
Cost of Sales	$	(2,913	)	$	(840	)
Total	$	(2,913	)	$	(840	)

During the three months ended October 1, 2011 and October 2, 2010, there were no material gains or losses recognized in income due to hedge ineffectiveness.

The Company expects that $3,311 of net derivative losses included in accumulated other comprehensive income at October 1, 2011 will be reclassified into earnings within the next 12 months.  This amount will vary due to fluctuations in the Japanese yen and Canadian dollar exchange rates.

16

COACH, INC.

Notes to Condensed Consolidated Financial Statements

(dollars and shares in thousands, except per share data)

(unaudited)

Hedging activity affected accumulated other comprehensive (loss) income, net of tax, as follows:

	October 1,			July 2,
	2011			2011
Balance at prior year end balance sheet date	$	(1,465	)	$	(2,092	)
Net losses transferred to earnings		1,767			10,021
Change in fair value, net of tax		(2,332	)		(9,394	)
Balance at end of period	$	(2,030	)	$	(1,465	)

9. Goodwill and Intangible Assets

The change in the carrying value of goodwill for the first three months of fiscal 2012 ended October 1, 2011, by operating segment, is as follows:

	Direct-to-
	Consumer		Indirect		Total
Goodwill balance at July 2, 2011	$	329,488	$	1,516	$	331,004
Acquisition of Singapore retail business		5,292		-		5,292
Foreign exchange impact		15,682		-		15,682
Goodwill balance at October 1, 2011	$	350,462	$	1,516	$	351,978

At October 1, 2011 and July 2, 2011, intangible assets not subject to amortization consisted of $9,788 of trademarks.

10. Segment Information

The Company operates its business in two reportable segments: Direct-to-Consumer and Indirect.  The Company's reportable segments represent channels of distribution that offer similar merchandise and service and utilize similar marketing strategies.  Sales of Coach products through Company-operated stores in North America, Japan, Hong Kong, Macau, mainland China and Singapore, and the Internet constitute the Direct-to-Consumer segment.  The Indirect segment includes sales to wholesale customers in over 20 countries, including the United States, and royalties earned on licensed product.  In deciding how to allocate resources and assess performance, the Company's executive officers regularly evaluate the net 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 production variances, general marketing, administration and information systems expenses, as well as distribution and consumer service expenses.

In connection with the acquisition of the retail business in Singapore, the Company evaluated the composition of its reportable segments and concluded that sales in this region should be included in the Direct-to-Consumer segment. Accordingly, prior year comparable sales and operating income have been reclassified to conform to the current year presentation.

17

COACH, INC.

Notes to Condensed Consolidated Financial Statements

(dollars and shares in thousands, except per share data)

(unaudited)

	Direct-to-				Corporate
	Consumer		Indirect		Unallocated			Total
Quarter Ended October 1, 2011
Net sales	$	910,275	$	140,084	$	-		$	1,050,359
Operating income		364,898		77,950		(120,882	)		321,966
Income before provision for income taxes		364,898		77,950		(122,244	)		320,604
Depreciation and amortization expense		21,448		2,567		8,039			32,054
Additions to long-lived assets		18,889		7,193		9,897			35,979
Quarter Ended October 2, 2010
Net sales	$	777,222	$	134,447	$	-		$	911,669
Operating income		301,469		74,928		(90,737	)		285,660
Income before provision for income taxes		301,469		74,928		(91,299	)		285,098
Depreciation and amortization expense		21,220		3,036		7,995			32,251
Additions to long-lived assets		20,026		2,171		4,593			26,790

18

COACH, INC.

Notes to Condensed Consolidated Financial Statements

(dollars and shares in thousands, except per share data)

(unaudited)

The following is a summary of the common costs not allocated in the determination of segment performance:

	Quarter Ended
	October 1,			October 2,
	2011			2010
Production variances	$	8,677		$	16,367
Advertising, marketing and design		(50,692	)		(37,406	)
Administration and information systems		(64,260	)		(57,496	)
Distribution and customer service		(14,607	)		(12,202	)
Total corporate unallocated	$	(120,882	)	$	(90,737	)

11. Stock Repurchase Program

Purchases of Coach’s common stock are made subject to market conditions and at prevailing market prices, through the open market.  Repurchased shares of common stock become authorized but unissued shares and may be issued in the future for general corporate and other purposes.  The Company may terminate or limit the stock repurchase program at any time.

Coach accounts for stock repurchases and retirements by allocating the repurchase price to common stock, additional paid-in-capital and retained earnings.  The repurchase price allocation is based upon the equity contribution associated with historical issuances, beginning with the earliest issuance.  During the fourth quarter of fiscal 2010, cumulative stock repurchases allocated to retained earnings have resulted in an accumulated deficit balance.  Since its initial public offering, the Company has not experienced a net loss in any fiscal year, and the net accumulated deficit balance in stockholders’ equity is attributable to the cumulative stock repurchase activity.

For the first quarter of fiscal 2012 and fiscal 2011, the Company repurchased and retired 1,067 and 3,585 shares of common stock at an average cost of $55.30 and $38.35 per share, respectively.  As of October 1, 2011, Coach had $902,627 remaining in the stock repurchase program.

12. Recent Accounting Developments

In May 2011, Accounting Standards Codification 820-10 “Fair Value Measurements and Disclosures,” was amended to clarify certain disclosure requirements and improve consistency with international reporting standards. This amendment is to be applied prospectively and is effective for the Company beginning January 1, 2012. The Company does not expect its adoption to have a material effect on its consolidated financial statements.

19

COACH, INC.

Notes to Condensed Consolidated Financial Statements

(dollars and shares in thousands, except per share data)

(unaudited)

Accounting Standards Codification Topic 220, “Comprehensive Income,” was amended in June 2011 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 is effective for the Company’s fiscal year and interim periods beginning July 1, 2012. The Company is currently evaluating this guidance, but does not expect its adoption to have a material effect on its 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 current accounting standards.  This guidance is effective for the Company’s fiscal year beginning July 1, 2012.  The Company does not expect its adoption to have a material effect on its consolidated financial statements.

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ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

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

EXECUTIVE OVERVIEW

Coach is a leading American marketer of fine accessories and gifts for women and men.  Our product offerings include women’s and men’s bags, accessories, business cases, footwear, wearables, jewelry, sunwear, travel bags, watches and fragrance.  Coach operates in two segments: Direct-to-Consumer and Indirect.  The Direct-to-Consumer segment includes sales to consumers through Company-operated stores in North America, Japan, Hong Kong, Macau, mainland China, Singapore, and the Internet.  The Indirect segment includes sales to wholesale customers in over 20 countries, including the United States, and royalties earned on licensed product.  As Coach’s business model is based on multi-channel international distribution, our success does not depend solely on the performance of a single channel or geographic area.

In order to sustain growth within our global framework, we continue to focus on two key growth strategies: increased global distribution, with an emphasis on North America and China, and improved store sales productivity.  To that end, we are focused on five key initiatives:

· Build market share in North America’s growing accessories market in part by expanding our North American retail store base by opening stores in new markets and adding stores in under-penetrated existing markets. We believe that North America can support about 500 retail stores in total, including up to 30 in Canada. We expect to open about 15 net new retail stores and 25 factory outlets in fiscal 2012. The pace of our future retail store openings will depend upon the economic environment and will reflect opportunities in the marketplace. In addition, as part of our culture of innovation and continuous improvement, we have implemented a number of initiatives to accelerate the level of distinctive newness, elevate our product offering and enhance the in-store experience. These initiatives will enable us to maximize productivity and continue to leverage our leadership position in the market.

· Raise brand awareness and build market share in markets in which Coach is under-penetrated, most notably in Asia, where China is our largest geographic growth opportunity, given the size of the market, its rate of growth, and our increasing brand awareness. We currently plan to open about 30 new locations in China during fiscal 2012, with the majority in mainland China. Outside of Asia, we are developing the brand opportunity as we expand into Europe and South America.

· Focus on the Men’s opportunity for the brand, notably in North America and Asia, while drawing on our long heritage in the category. We have implemented a number of initiatives to elevate our Men’s product offering through image-enhancing and accessible locations. We are leveraging the Men’s opportunity by opening new locations, notably in factory, and as a productivity driver with a broadened assortment, dual-gender stores and shop-in-shop store executions.

· Continue to expand market share with the Japanese consumer, driving growth in Japan primarily by opening new retail locations. We believe that Japan can support about 180 retail locations in total. We currently plan to open approximately 15 net new locations, most notably Men’s, during fiscal 2012.

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· Raise brand awareness and maximize e-commerce sales through our digital strategy, coach.com, our global e-commerce sites, marketing sites and social networking. The Company utilizes and continues to explore implementing new technologies such as our global web presence, with 17 informational websites in 18 countries, with e-commerce enabled in the United States, Canada and Japan, social networking and blogs as cost-effective consumer communication opportunities to increase on-line and store sales.

We believe the growth strategies outlined above will allow us to deliver long-term superior returns on our investments and drive increased cash flows from operating activities.  Although  the current macroeconomic environment has improved, consumers, notably in North America and Japan, remain cautious.  The Company believes long-term growth can still be achieved through a combination of expanded distribution with an emphasis on Asia, along with a focus on innovation to support productivity and disciplined expense control.  Our multi-channel distribution model is diversified and includes substantial international and factory businesses, which complement our full-price U.S. business.  With an essentially debt-free balance sheet and significant cash position, we believe we are well positioned to manage our business to take advantage of profitable growth opportunities while returning cash to shareholders through common stock repurchases and dividends.

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FIRST QUARTER OF FISCAL 2012 HIGHLIGHTS

The key metrics of the first quarter of fiscal 2012 were:

· Earnings per diluted share increased 15.8% to $0.73.

· Net sales increased 15.2% to $1.05 billion.

· Direct-to-consumer sales rose 17.1% to $910 million.

· Comparable store sales in North America increased 9.2%, primarily due to overall improved conversion in our factory and full-priced stores.

· In North America, Coach opened nine new factory stores including eight Men’s, bringing the total number of retail and factory stores to 345 and 152, respectively, at the end of the first quarter of fiscal 2012.

· Coach China results continued to be strong with double-digit growth in comparable stores.  Coach China opened five net new locations, bringing the total number of locations at the end of the first quarter of fiscal 2012 to 71.

· Coach Japan opened two net new locations, bringing the total number of locations at the end of the first quarter of fiscal 2012 to 171.

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RESULTS OF OPERATIONS

FIRST QUARTER FISCAL 2012 COMPARED TO FIRST QUARTER FISCAL 2011

The following table summarizes results of operations for the first quarter of fiscal 2012 compared to the first quarter of fiscal 2011:

	Quarter Ended
	October 1, 2011						October 2, 2010						Variance
	(dollars in millions, except per share data)
	(unaudited)
				% of						% of
	Amount			net sales			Amount			net sales			Amount			%
Net sales	$	1,050.4			100.0	%	$	911.7			100.0	%	$	138.7			15.2	%
Gross profit		764.7			72.8			676.2			74.2			88.5			13.1
Selling, general and
administrative expenses		442.7			42.1			390.5			42.8			52.2			13.4
Operating income		322.0			30.7			285.7			31.3			36.3			12.7
Interest income, net		0.1			0.0			0.2			0.0			(0.1	)	nm		*
Other expense		(1.5	)		(0.1	)		(0.8	)		(0.1	)		(0.7	)	nm		*
Provision for income taxes		105.6			10.1			96.2			10.6			9.4			9.8
Net income		215.0			20.5			188.9			20.7			26.1			13.8
Net income per share:
Basic	$	0.74					$	0.64					$	0.10			16.4	%
Diluted		0.73						0.63						0.10			15.8

* - Percentage change is not meaningful

Net Sales

Net sales by business segment in the first quarter of fiscal 2012, compared to the first quarter of fiscal 2011, were as follows:

	Quarter Ended
	(unaudited)
								Percentage of
	Net Sales							Total Net Sales
	October 1,		October 2,		Rate of			October 1,			October 2,
	2011		2010		Change			2011			2010
	(dollars in millions)
Direct-to-Consumer	$	910.3	$	777.2		17.1	%		86.7	%		85.3	%
Indirect		140.1		134.4		4.2			13.3			14.7
Total net sales	$	1,050.4	$	911.7		15.2			100.0	%		100.0	%

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Direct-to-Consumer

Net sales increased 17.1% to $910.3 million during the first quarter of fiscal 2012 from $777.2 million during the same period in fiscal 2011, primarily driven by sales increases in our Company-operated stores in North America and China.

In North America, net sales increased 14.3% driven by a 9.2% increase in comparable store sales, including online sales, and sales from new and expanded stores.  Since the end of the first quarter of fiscal 2011, Coach opened 24 new factory stores, and expanded seven factory stores in North America.  In Japan, net sales increased 10.4% driven by an approximately $16.2 million or 9.4% positive impact from foreign currency exchange.  Since the end of the first quarter of fiscal 2011, Coach opened eight net new locations and expanded three locations in Japan.  Coach China results continued to be strong with double-digit percentage growth in comparable store sales.  Since the end of the first quarter of fiscal 2011, Coach opened 22 net new stores in Hong Kong and mainland China.

Indirect

Net sales increased 4.2% to $140.1 million in the first quarter of fiscal 2012 from $134.4 million during the same period of fiscal 2011.  The increase was driven primarily by a 6.1% increase in Coach International Wholesale net shipments.  Licensing revenue of approximately $4.8 million and $4.2 million in the first quarter of fiscal 2012 and fiscal 2011, respectively, is included in Indirect sales.

Operating Income

Operating income increased 12.7% to $322.0 million in the first quarter of fiscal 2012 as compared to $285.7 million in the first quarter of fiscal 2011.  Operating margin decreased to 30.7% as compared to 31.3% in the same period of the prior year.

Gross profit increased 13.1% to $764.7 million in the first quarter of fiscal 2012 from $676.2 million during the same period of fiscal 2011.  Gross margin was 72.8% in the first quarter of fiscal 2012 as compared to 74.2% during the same period of fiscal 2011.

Selling, general and administrative expenses increased 13.4% to $442.7 million in the first quarter of fiscal 2012 as compared to $390.5 million in the first quarter of fiscal 2011, driven primarily by increased selling expenses and investments in our digital and e-commerce infrastructure.  As a percentage of net sales, selling, general and administrative expenses decreased to 42.1% during the first quarter of fiscal 2012 as compared to 42.8% during the first quarter of fiscal 2011 as we leveraged our selling expense base on higher sales.

Selling expenses were $303.5 million, or 28.9% of net sales, in the first quarter of fiscal 2012 compared to $269.1 million, or 29.5% of net sales, in the first quarter of fiscal 2011.  The dollar increase in selling expenses was due to higher operating expenses in Coach China and North American stores due to higher sales and new store openings.  Coach China and North American store expenses as a percentage of sales decreased primarily due to operating efficiencies and sales leverage.  The decrease in Coach Japan operating expenses in constant currency of $1.2 million was offset by the impact of foreign currency exchange rates which increased reported expenses by approximately $6.0 million.

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Advertising, marketing, and design costs were $57.8 million, or 5.5% of net sales, in the first quarter of fiscal 2012, compared to $51.0 million, or 5.6% of net sales, during the same period of fiscal 2011.  The increase was primarily due to marketing expenses related to consumer communications, which includes our digital strategy through coach.com, our global e-commerce sites, marketing sites and social networking.  The Company operates informational websites in 18 countries, and utilizes social networking and blogs as cost-effective consumer communication opportunities to increase on-line and store sales and build brand awareness.  Also contributing to the increase were new design expenditures and development costs for new merchandising initiatives.

Distribution and consumer service expenses were $15.4 million, or 1.4% of net sales, in the first quarter of fiscal 2012, compared to $12.9 million, or 1.5% of net sales, in the first quarter of fiscal 2011.To support our growth in China and the region, during the second half of 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.  During the first quarter of fiscal 2012, the Asia distribution center contributed to the increase in distribution and consumer service expenses; however in the long run, the Company expects the Asia distribution center to reduce costs as a percentage of net sales.

Administrative expenses were $66.0 million, or 6.3% of net sales, in the first quarter of fiscal 2012 compared to $57.5 million, or 6.3% of net sales, during the same period of fiscal 2011.  The increase in administrative expenses was primarily due to higher share-based compensation and systems investment.

Provision for Income Taxes

The effective tax rate was 32.94% in the first quarter of fiscal 2012 as compared to 33.75% in the first quarter of fiscal 2011.  The decrease in the effective tax rate is primarily attributable to higher profitability in lower tax rate jurisdictions in which income is earned, due to the increased globalization of the Company.

Net Income

Net income was $215.0 million in the first quarter of fiscal 2012 as compared to $188.9 million in the first quarter of fiscal 2011.  This increase was primarily due to an improvement in operating income as well as a decrease in the Company's effective tax rate.

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FINANCIAL CONDITION

Cash Flow

Net cash provided by operating activities was $225.0 million in the first quarter of fiscal 2012 compared to $177.5 million in the first quarter of fiscal 2011. The increase of $47.5 million was primarily the result of $26.1 million higher net income in the current period, as well as changes in deferred income taxes year-over-year.  Deferred income taxes were a source of cash of $34.3 million in fiscal 2012 compared to $9.9 million in fiscal 2011, due to the timing of certain deferred tax items.  In total, cash outflows from working capital accounts were in line year-over-year, at approximately $70 million.  During the first quarter the Company invests in inventory for the holiday selling season and typically generates higher levels of trade receivables.

Net cash used in investing activities was $38.5 million in the first quarter of fiscal 2012 compared to $14.5 million in the first quarter of fiscal 2011, an increase of $24.0 million, due to increased capital investment.  The company acquired its domestic retail business in Singapore from the former distributor for an aggregate purchase price of $7.6 million.  Additionally, purchases of property and equipment were $30.9 million in the current fiscal period, which was $7.8 million higher than the prior year period, reflecting planned increased capital investment.  Proceeds from maturities and sales of investments, net of purchases of investments, resulted in investing cash inflows of $9.3 million in the prior fiscal period. The Company had no comparable investment activity in the current fiscal year period.

Net cash used in financing activities was $42.5 million in the first quarter of fiscal 2012 compared to $140.3 million in the first quarter of fiscal 2011. The decrease of $97.8 million in net cash used in the current fiscal period was primarily attributable to $78.5 million less cash expended for repurchases of common stock and $27.4 million incremental proceeds from exercises of share-based awards, partially offset by $20.5 million of higher dividend payments, due to the higher dividend payment rate in the current fiscal period.

Revolving Credit Facilities

On July 26, 2007, the Company renewed its $100 million revolving credit facility with certain lenders and Bank of America, N.A. as the primary lender and administrative agent (the “Bank of America facility”), extending the facility expiration to July 26, 2012.  At Coach’s request and the lenders’ consent, the Bank of America facility can be expanded to $200 million.  The facility can also be extended for two additional one year periods, at Coach’s request and the lenders’ consent.

Coach’s Bank of America facility is available for seasonal working capital requirements or general corporate purposes and may be prepaid without penalty or premium.  During the first three months of fiscal 2012 and fiscal 2011 there were no borrowings under the Bank of America facility.  As of October 1, 2011 and July 2, 2011, there were no outstanding borrowings under the Bank of America facility.  The Company’s borrowing capacity as of October 1, 2011 was $92.4 million, due to outstanding letters of credit.

Coach pays a commitment fee of 6 to 12.5 basis points on any unused amounts and interest of LIBOR plus 20 to 55 basis points on any outstanding borrowings.  Both the commitment fee and the LIBOR margin are based on the Company’s fixed charge coverage ratio.  At October 1, 2011, the commitment fee was 7 basis points and the LIBOR margin was 30 basis points.

The Bank of America facility contains various covenants and customary events of default.  Coach has been in compliance with all covenants since its inception.

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To provide funding for working capital and general corporate purposes, Coach Japan has available credit facilities with several Japanese financial institutions.  These facilities allow a maximum borrowing of 4.1 billion Japanese yen, or approximately $53.2 million, at October 1, 2011.  Interest is based on the Tokyo Interbank rate plus a margin of 30 basis points.  There were no borrowings during the first three months of fiscal 2012 or fiscal 2011.  As of October 1, 2011 and July 2, 2011, there were no outstanding borrowings under the Japanese credit facilities.

To provide funding for working capital and general corporate purposes, Coach Shanghai Limited has a credit facility that allows a maximum borrowing of 63 million Chinese renminbi, or approximately $10 million, at October 1, 2011.  Interest is based on the People's Bank of China rate.  There were no borrowings during the first three months of fiscal 2012 or fiscal 2011.  As of October 1, 2011 and July 2, 2011, there were no outstanding borrowings under this facility.

Common Stock Repurchase Program

During fiscal 2011, the Company completed its $1.0 billion common stock repurchase program, which was put into place in April 2010.  In January 2011, the Company’s Board of Directors approved a new common stock repurchase program to acquire up to $1.5 billion of Coach’s outstanding common stock through June 2013.  Purchases of Coach common stock are made subject to market conditions and at prevailing market prices, through open market purchases.  Repurchased shares become authorized but unissued shares and may be issued in the future for general corporate and other uses.  The Company may terminate or limit the stock repurchase program at any time.

During the first three months of fiscal 2012 and fiscal 2011, the Company repurchased and retired 1.1 million and 3.6 million shares respectively, or $59.0 million and $137.5 million of common stock, respectively, at an average cost of $55.30 and $38.35 per share, respectively.  As of October 1, 2011, Coach had $902.6 million remaining in the stock repurchase program.

Liquidity and Capital Resources

The Company expects total capital expenditures for the fiscal year ending June 30, 2012 to be approximately $200 million.  Capital expenditures will be primarily for new stores in North America, Japan, Hong Kong and mainland China.  We will also continue to invest in corporate infrastructure and department store and distributor locations.  These investments will be financed primarily from cash on hand and operating cash flows.

Coach experiences significant seasonal variations in its working capital requirements.  During the first fiscal quarter Coach builds inventory for the holiday selling season, opens new retail stores and generates higher levels of trade receivables.  In the second fiscal quarter, working capital requirements are reduced substantially as Coach generates greater consumer sales and collects wholesale accounts receivable.  During the first three months fiscal 2012, Coach purchased approximately $383 million of inventory, which was funded by operating cash flow.

Management believes that cash flow from continuing operations and on hand cash will provide adequate funds for the foreseeable working capital needs, planned capital expenditures, dividend payments and the common stock repurchase program.  Any future acquisitions, joint ventures or other similar transactions may require additional capital.  There can be no assurance that any such capital will be available 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, as well as to comply with all of the financial covenants under its debt agreements, depends on its 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 Coach’s control.

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Reference should be made to our most recent Annual Report on Form 10-K for additional information regarding liquidity and capital resources.

Seasonality

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.  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.  Over the past several years, we have achieved higher levels of growth in the non-holiday quarters, which has reduced these seasonal fluctuations.

NON-GAAP MEASURES

Currency Fluctuation Effects

The percentage increase in sales and U.S. dollar increases in operating expenses in the first quarter of fiscal 2012 for Coach Japan have been presented both including and excluding currency fluctuation effects from translating these foreign-denominated amounts into U.S. dollars and comparing these figures to the same periods in the prior fiscal year.

We believe that presenting Coach Japan sales and operating expense increases, including and excluding currency fluctuation effects, will help investors and analysts to understand the effect on these valuable performance measures of significant year-over-year currency fluctuations.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

Our discussion of results of operations and financial condition relies on our consolidated financial statements that are prepared based on certain critical accounting policies that require management to make judgments and estimates that are subject to varying degrees of uncertainty.  We believe that investors need to be aware of these policies and how they impact our financial statements as a whole, as well as our related discussion and analysis presented herein.  While we believe that these accounting policies are based on sound measurement criteria, actual future events can and often do result in outcomes that can be materially different from these estimates or forecasts.  The accounting policies and related risks described in our Annual Report on Form 10-K for the year ended July 2, 2011 are those that depend most heavily on these judgments and estimates.  As of October 1, 2011, there have been no material changes to any of the critical accounting policies contained therein.

Recent Accounting Developments

In May 2011, Accounting Standards Codification 820-10 “Fair Value Measurements and Disclosures,” was amended to clarify certain disclosure requirements and improve consistency with international reporting standards. This amendment is to be applied prospectively and is effective for the Company beginning January 1, 2012. The Company does not expect its adoption to have a material effect on its consolidated financial statements.

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Accounting Standards Codification Topic 220, “Comprehensive Income,” was amended in June 2011 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 is effective for the Company’s fiscal year and interim periods beginning July 1, 2012. The Company is currently evaluating this guidance, but does not expect its adoption to have a material effect on its 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 current accounting standards.  This guidance is effective for the Company’s fiscal year beginning July 1, 2012.  The Company does not expect its adoption to have a material effect on its consolidated financial statements.

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ITEM 3.                  Quantitative and Qualitative Disclosures about Market Risk

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

The following quantitative disclosures 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.  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.

Foreign Currency Exchange

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 of Coach’s fiscal 2012 non-licensed product needs are purchased from independent manufacturers in countries other than the United States.  These countries include China, United States, Italy, Hong Kong, India, Thailand, Vietnam, Macau, Philippines, Turkey, Colombia, Malaysia, Mexico, Peru, South Africa and Taiwan.  Additionally, sales are made through international channels to third party distributors.  Substantially all purchases and sales involving international parties, excluding consumer sales at Coach Japan, Coach Canada, Coach China and Coach Singapore, are denominated in U.S. dollars and, therefore, are not subject to foreign currency exchange risk.

In Japan and Canada, Coach is exposed to market risk from foreign currency exchange rate fluctuations resulting from Coach Japan and Coach Canada’s U.S. dollar denominated inventory purchases.  Coach Japan and Coach Canada enter into certain foreign currency derivative contracts, primarily zero-cost collar options, to manage these risks.  As of October 1, 2011 and July 2, 2011, open foreign currency forward contracts designated as hedges with a notional amount of $169.0 million and $171.0 million, respectively, were outstanding.

Coach is also exposed to market risk from foreign currency exchange rate fluctuations with respect to Coach Japan as a result of its $109.1 million U.S. dollar-denominated fixed rate intercompany loan from Coach. To manage this risk, on June 30, 2011, Coach Japan entered into a cross currency swap transaction, the terms of which include an exchange of a yen fixed interest rate for a U.S. dollar fixed interest rate. The loan matures on December 29, 2011, at which point the swap requires an exchange of Japanese yen and U.S. dollar based notional values.

The fair value of open foreign currency derivatives included in current assets at October 1, 2011 and July 2, 2011 was $2.9 and $2.0 million, respectively.  The fair value of open foreign currency derivatives included in current liabilities at October 1, 2011 and July 2, 2011 was $11.4 million and $1.7 million, respectively.  The fair value of these contracts is sensitive to changes in Japanese yen and Canadian dollar exchange rates.

31

Coach believes that exposure to adverse changes in exchange rates associated with revenues and expenses of foreign operations, which are denominated in Japanese yen, Chinese renminbi, Hong Kong dollar, Macanese pataca, Canadian dollars, Singapore dollar and the euro, are not material to the Company’s consolidated financial statements.

Interest Rate

Coach is exposed to interest rate risk in relation to its investments, revolving credit facilities and long-term debt.

The Company’s investment portfolio is maintained in accordance with the Company’s investment policy, which identifies allowable investments, specifies credit quality standards and limits the credit exposure of any single issuer.  The primary objective of our investment activities is the preservation of principal while maximizing interest income and minimizing risk.  We do not hold any investments for trading purposes.  The Company’s investment portfolio consists of U.S. government and agency securities as well as corporate debt securities.  As the Company does not have the intent to sell and will not be required to sell these securities until maturity, investments are classified as held-to-maturity and stated at amortized cost, except for auction rate securities, which are classified as available-for-sale.  At both October 1, 2011 and July 2, 2011, the Company’s investments, classified as held-to-maturity, consisted of commercial paper and treasury bills valued at $2.3 million.  As the adjusted book value of the commercial paper and treasury bills equals its fair value, there were no unrealized gains or losses associated with these investments.  At October 1, 2011 and July 2, 2011, the Company’s investments, classified as available-for-sale, consisted of a $6.0 million auction rate security.  At October 1, 2011, as the auction rate security’s adjusted book value equaled its fair value, there were no unrealized gains or losses associated with this investment.

As of October 1, 2011, the Company had no outstanding borrowings on its Bank of America facility, its revolving credit facilities maintained by Coach Shanghai, nor its Coach Japan facility.  The fair value of any future borrowings may be impacted by fluctuations in interest rates.

As of October 1, 2011, Coach’s outstanding long-term debt, including the current portion, was $24.1 million.  A hypothetical 10% change in the interest rate applied to the fair value of debt would not have a material impact on earnings or cash flows of Coach.

ITEM 4.                  Controls and Procedures

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 Chairman and Chief Executive Officer of the Company, and Jane Nielsen, Executive Vice President and Chief Financial Officer of the Company, have concluded that the Company's disclosure controls and procedures are effective as of October 1, 2011.

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

Reference should be made to our most recent Annual Report on Form 10-K for additional information regarding discussion of the effectiveness of the Company’s controls and procedures.

32

PART II – OTHER INFORMATION

ITEM 1.  Legal Proceedings

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, Coach actively files lawsuits in the U.S. and abroad alleging acts of trademark counterfeiting, trademark infringement, patent infringement, trade dress infringement, 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 U.S.-based employees, such litigation can result in large monetary awards when a civil jury is allowed to determine compensatory and/or punitive damages for actions claiming discrimination on the basis of age, gender, race, religion, disability or other legally protected characteristic or for termination of employment that is wrongful or in violation of implied contracts.

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

ITEM 1A.  Risk Factors

There are no material changes from the risk factors previously disclosed in our Annual Report on Form 10-K for the fiscal year ended July 2, 2011.

ITEM 2.  Unregistered Sales of Equity Securities and Use of Proceeds

The Company’s share repurchases during the first quarter of fiscal 2012 were 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 1 (7/3/2011 - 8/6/2011)		-	$	-		-	$	961,627
Period 2 (8/7/2011 - 9/3/2011)		556		52.69		556		932,318
Period 3 (9/4/2011 - 10/1/2011)		511		58.14		511		902,627
Total		1,067				1,067

33

(1) The Company repurchases its common shares under repurchase programs that were approved by the Board of Directors as follows:

Date Share Repurchase Programs were Publicly Announced	Total Dollar Amount Approved	Expiration Date of Plan
January 25, 2011	$ 1.5 billion	June 2013

ITEM 6.  Exhibits

(a) Exhibits

10.1 Performance Restricted Stock Unit Award Grant Notice and Agreement, dated August 4, 2011, between Coach andMichael Tucci

10.2 Employment Offer Letter dated July 19, 2011 between Coach to Jane Nielsen

10.3 Consulting Agreement dated October 7, 2011 between Coach and Michael F. Devine, III, which is incorporated by reference from Exhibit 10.1 to Coach’s Current Report on Form 8-K filed on October 7, 2011

31.1 Rule 13(a) – 14(a)/15(d) – 14(a) Certifications

32.1 Section 1350 Certifications

101.INS  XBRL Instance Document

101.SCH  XBRL Taxonomy Extension Schema Document

101.CAL  XBRL Taxonomy Extension Calculation Linkbase

101.LAB  XBRL Taxonomy Extension Label Linkbase

101.PRE XBRL Taxonomy Extension Presentation Linkbase

101.DEF XBRL Taxonomy Extension Definition Linkbase

34

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	COACH, INC.   (Registrant) By:  /s/ Jane Nielsen                                   Name: Jane Nielsen Title:   Executive Vice President,             Chief Financial Officer and             Chief Accounting Officer
Dated: November 9, 2011

35

EX-10.1

    Unassociated Document
    
    
    

EX-10.2

July 19 2011

Jane Nielsen

3 Parley Lane

Ridgefield,

CT 06877

Dear Jane,

It is with great pleasure that I confirm our offer for the position of Chief Financial Officer and Executive Vice President of Coach, reporting to Jerry Stritzke, President and Chief Operating Officer, Coach Inc. You will be an Executive Officer of Coach, Inc. and a member of the Coach Operating Group.

If you accept our offer, we will agree the earliest possible mutually acceptable start date.  Our offer includes an annual compensation package valued, at grant, at maximum at $2,093,338 and, in addition, a one-time sign-on package valued, at grant, at $3,100,000.   Our offer has a total maximum value, over the first five years of your employment of over $13,566,687, with further upside possible due to stock price appreciation, and dividend reinvestment on RSU’s.

Base Salary

$575,000 per annum.

Your salary will be paid monthly on the last Thursday of each calendar month.

Performance reviews are typically conducted at the end of our fiscal year, which presently runs from approximately July 1 through June 30. Any merit increases for which you may be eligible would also be determined at that time, and would take effect in September.  You will be eligible for a merit increase beginning in September, 2012.

Incentive Compensation

You will be eligible to participate in the Coach, Inc. Performance-Based Annual Incentive Plan ("SOPS"), a cash incentive program under which payout is based solely on Coach’s financial performance.  The target bonus is 75% of your salary actually paid during the fiscal year (“actual earnings”).  The maximum bonus is 100% and assumes the highest possible level of company financial performance.  You will be eligible for this program beginning in fiscal year 2012.  To be eligible for the bonus, you understand and agree you must be employed with Coach as of the payout date.   If you resign your employment or are terminated for "cause," you are not eligible for this bonus for the fiscal year in which your employment is terminated.  For the purposes of this letter, termination for “cause” is defined by Coach and includes but shall not be limited to:  (1) poor performance as an employee of Coach, (2) violation of Coach’s rules of conduct as provided in our Employee Guide, (3) any willful or grossly negligent breach of your duties, or (4) fraud, embezzlement or any other similar dishonest conduct

Any SOPS bonus is paid within three months of the end of the fiscal year. After you are hired, please refer to the Benefits & Pay section of the Coach intranet for the governing terms of the SOPS bonus plan.

2

Jane Nielsen, Chief Financial Officer, Coach Inc

In addition, Coach’s Board of Directors has adopted the following incentive repayment policy affecting all performance-based compensation Coach pays to members of its Operating Group:

In the event of a material restatement of the company's financial results, the Human Resources Committee of the Board of Directors (“the Committee”) will review the circumstances that caused the restatement and consider accountability to determine whether an Operating Group member was negligent or engaged in misconduct.  If the Committee determines that this was the case, and that the amount paid to that Operating Group member of a cash incentive award (for example SOPS), or the shares vesting of a performance-based long-term incentive award, would have been less during any period had the financial statements been correct, then the Committee will recover compensation from the responsible Operating Group member as it deems appropriate.

Your acceptance of this offer includes your acceptance of a binding agreement to return to the company the full amount of any compensation demanded by the Committee under this policy.  This agreement will survive the longer of (i) six months following your departure from Coach, or (ii) up to six months after payment of the relevant incentive compensation.

Sign On Package

You will receive a special, one time, sign-on package valued at $3,100,000; $1,400,000 of which will be payable as cash (“Cash Bonus”), 50%, within six (6) weeks of your start date, and 50% after 12 months of service, less applicable withholding taxes.  In accepting our offer, you agree that you will repay a pro-rata portion of the Cash Bonus if you voluntarily resign your employment within two years of your start date, or if your employment is terminated for “cause,” as defined above.  Full repayment of this Cash Bonus must occur within 30 days of your termination date.  Any repayment hereunder shall be net of withholding taxes, if such repayment takes place in the same calendar year of the payment of the Cash Bonus, and, thereafter, will be on the gross amount.

You will receive the remaining value of your sign on package as a special grant of Coach, Inc. Restricted Stock Units (RSUs) valued at $1,700,000 (“Sign-on RSUs”).  The number of RSUs you receive will be based on the closing stock price on date of grant. The grant date will be the first business day of the fiscal month coincident with or next following your start date.  The award will vest 30% on the third anniversary of the grant date, 50% on the fourth anniversary of the grant date and 20% on the fifth anniversary of the grant date.  In the event of death or permanent disability before the vesting of these awards,  The  Sign-on  RSU’s  will vest in full, as of the date of death or the date on which you are determined to be permanently and totally disabled.

3

Jane Nielsen, Chief Financial Officer, Coach Inc

Equity Compensation

You will receive a new hire stock option grant valued at $500,000 on the date of the grant.  The number of stock options you receive will be based on the grant price (closing price on the grant date) and on an industry standard valuation model, Black-Scholes, which determines the value of a stock option.  The grant date will be the first business day of the fiscal month coincident with or next following your start date.  Stock options are exercisable 1/3 after 1 year, 1/3 after 2 years, and 1/3 after 3 years.  Coach may make additional, annual stock option grants each August.  Any future grants will be determined based on your position, performance, time in job and other criteria Coach determines it its discretion, which are subject to change.

You will also receive a new hire RSU grant valued at $400,000 on the date of grant.  The number of RSUs you receive will be based on the closing stock price on date of grant.  The grant date will be the same date as your new hire stock option grant and Sign on RSU grant.  The award will vest in full on the third anniversary of the grant date, conditioned upon your continued employment with us on that date.  Coach may make additional, annual RSU grants each August. Any future grants will be determined based on your position, performance, time in job and other criteria Coach determines it its discretion, which are subject to change.

With regard to all equity grants, including the Sign on RSUs, after you are hired, you will receive an email alert to view and accept your Grant Agreements and have access to the Coach, Inc. Stock Incentive Plan (“the Plan”) prospectus through our service provider Fidelity via the internet.  Sample forms of the stock grant agreements are included with this letter for your review; the Plan’s terms, as they may be changed from time to time, are controlling.

For clarification, in the event of death or permanent disability before the vesting of these awards, the new hire option award will vest as of the date of death or the date on which you are determined to be permanently and totally disabled.  For the new hire RSU award, the HR Committee of our Board may approve a pro-rata vesting of the RSU’s, which would occur on the original vesting date,

Stock Ownership Requirements

Coach’s Board of Directors has implemented stock ownership requirements for all Vice Presidents and above.  The recommended amount of stock ownership for your position is Coach stock valued at twice your annual salary, or 50,000 shares, whichever has lesser value. You will be required to meet this requirement by the time you have reached your fifth anniversary with the Company.  Details about this program may be found in the Your Coach Benefits Summary Kit, included with this letter.

In addition to general restrictions on trading other types of Coach securities, as well as blackout periods,  and to ensure that you do not inadvertently trade Coach securities when a non-public material event is taking place and to provide the Chairman and CEO with advance notice, you will be required to  provide the Coach legal department at least 24 hours’ notice of your intent to exercise stock options, or buy or sell Coach shares, along with the details (number of shares/options) of any proposed transaction.

4

Jane Nielsen, Chief Financial Officer, Coach Inc

Transportation Allowance

While you are employed, you will be eligible for a monthly transportation allowance equal to 5.45% of your base salary (up to $3,000) plus $1,000.  The allowance is subject to applicable federal, FICA, state/local taxes.

Benefits

Your other major benefits will include medical, dental, vision benefits for you and your family, Life insurance, short and long term disability for you, Coach, Inc. Savings & Profit Sharing Plan, Employee Stock Purchase Plan, employee discount program, four (4) weeks of vacation and two (2) floating holidays per year.  Information about your benefits is provided in the Your Coach Benefits Summary Kit included with this letter. For clarification, there are no pre-existing condition exceptions in our medical plan, provided the conditions for you or your family members are currently covered by another plan.

Relocation

You are eligible for relocation under the Coach Relocation Policy, details of which are provided in the Your Coach Benefits Summary Kit included with this letter.   We will extend the requirement to complete the relocation from the normal 12 month to 18 months following the date on which you start employment with us. When you have accepted our offer, Neil Corp, Relocation Coordinator, will be in touch to get started on managing your relocation.  Should you resign your employment within two years of your start date, or if your employment is terminated for “cause,” as defined above, Coach may require you to repay relocation expenses.

Severance

If your employment at Coach should cease involuntarily (e.g. position elimination) for any reason other than “cause,” as defined above you will receive 12months of the base salary in effect at the time of your termination under the Coach, Inc. Severance Pay Plan.  For more information, please view the Severance Plan document on the Coach intranet.  To receive separation pay, you will be required to sign a waiver and release agreement in the form provided by Coach; this agreement will include restrictions on your ability to compete with Coach and solicit Coach Employees.

Section 409A of the IRS Code.

It is expressly intended and contemplated that this letter comply with the provisions of Section 409A and that the payments hereunder will either be exempt from Section 409A or will comply with the provisions of Section 409A.  This letter will be administered and interpreted in a manner consistent with this intent,

5

Jane Nielsen, Chief Financial Officer, Coach Inc

and any provision that would cause the letter to fail to satisfy Section 409A will be amended to satisfy Section 409A or be exempt therefrom (which amendment may be retroactive to the extent permitted by Section 409A), which shall be done as soon as possible.  In no event shall Coach be relieved of its obligation to make any payment due under this letter by reason of this paragraph.  Notwithstanding any other provision of this letter, if you are a “specified employee” within the meaning of Treas. Reg. §1.409A-1(i)(1), then the payment of any amount or the provision of any benefit under this letter which is considered deferred compensation subject to Section 409A of the Code shall be deferred for six (6) months after your “separation from service” or, if earlier, your death to the extent required by Section 409A(a)(2)(B)(i) of the Code (the “409A Deferral Period”).  In the event payments are otherwise due to be made in installments or periodically during the 409A Deferral Period, the payments which would otherwise have been made in the 409A Deferral Period shall be accumulated and paid in a lump sum as soon as the 409A Deferral Period ends, and the balance of the payments shall be made as otherwise scheduled.  For purposes of any provision of this letter providing for reimbursements to you, such reimbursements shall be made no later than the end of the calendar year following the calendar year in which you incurred such expenses, and in no event shall the unused reimbursement amount during one calendar year be carried over into a subsequent calendar year.  For purposes of this letter, you shall not be deemed to have terminated employment unless you have a “separation from service” within the meaning of U.S. Treasury Regulations Section 1.409A-1(h), where it is reasonably anticipated that no further services will be performed after such date or that the level of bona fide services you will perform after that date (whether as an employee or independent contractor) will permanently decrease to no more than 20 percent of the average level of bona fide services performed by you over the immediately preceding 36-month period.  All rights to payments and benefits under this letter shall be treated as rights to receive a series of separate payments and benefits to the fullest extent allowed by Section 409A of the Code.

Terms and Conditions

If you accept Coach's offer of employment, our relationship is "employment-at-will."  That means you are free, at any time, for any reason, to end your employment with Coach and that Coach may do the same, providing that either party will give the other party three (3) months’ notice of intention to end employment.  Our agreement regarding employment-at-will may not be changed, except specifically in writing signed by both the Human Resources Committee of the Coach, Inc. Board of Directors (“the

Committee”) and you.  Coach may in its discretion add to, discontinue, or change compensation, duties, benefits and policies.  Notwithstanding the foregoing two sentences, nothing in the preceding two sentences shall be construed as diminishing the financial obligations of either of the parties hereunder, including, without limitation, Coach’s obligations to pay Salary, Bonus, Cash Bonus, Severance, Equity Compensation, etc., pursuant to the pertinent provisions set forth above.  Our offer of employment is contingent on the following:

· Formal ratification of this offer by the Human Resources Committee of the Coach, Inc. Board of Directors.

6

Jane Nielsen, Chief Financial Officer, Coach Inc

· You passing a credit/background check and verification of your identity and authorization to be employed in the United States.

· You returning a signed copy of this offer letter before your first day of work. 

· You completing new hire paper work; tax forms etc. on, or prior to, your first day of work

· Your agreement to be bound by, and adhere to, all of Coach's policies in effect during your employment with Coach, and our Confidentiality, Information Security and Privacy Agreement.

Jane, we are all excited at the prospect of your joining us at Coach to build a great future, both for Coach and for yourself.  This is Coach's entire offer of employment.  As you review this offer, please feel free to call me at (___) ___-____ or (___) ___-____ with any questions.  To accept the offer, and acknowledge you are not relying on any promise or representation that is not contained in this letter, please sign in the space below and return both copies to me on or beforeJuly 25th in the enclosed envelope.

Sincerely,

Sarah Dunn

SVP Human Resources

Coach, Inc.

I accept your offer of employment:

Jane Nielsen Date

EX-31.1

    Unassociated Document
    
    
    

EX-32.1

EXHIBIT 32.1

Pursuant to 18 U.S.C. § 1350, as created by Section 906 of the Sarbanes-Oxley Act of 2002, the undersigned officer of Coach, Inc. (the “Company”) hereby certifies, to such officer’s knowledge, that:

(i)           the accompanying Quarterly Report on Form 10-Q of the Company for the fiscal quarter ended October 1, 2011 (the “Report”) fully complies with the requirements of Section 13(a) or Section 15(d), as applicable, of the Securities Exchange Act of 1934, as amended; and

(ii)           the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: November 9, 2011

By:      /s/ Lew Frankfort                                  .

Name: Lew Frankfort

Title:  Chairman and Chief Executive Officer

Pursuant to 18 U.S.C. § 1350, as created by Section 906 of the Sarbanes-Oxley Act of 2002, the undersigned officer of Coach, Inc. (the “Company”) hereby certifies, to such officer’s knowledge, that:

(i)           the accompanying Quarterly Report on Form 10-Q of the Company for the fiscal quarter ended October 1, 2011 (the “Report”) fully complies with the requirements of Section 13(a) or Section 15(d), as applicable, of the Securities Exchange Act of 1934, as amended; and

(ii)           the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: November 9, 2011

By:      /s/ Jane Nielsen                      .

Name: Jane Nielsen

Title:  Executive Vice President and Chief Financial Officer

XML

Summary of Common Costs Not Allocated (Detail) (USD $) In Thousands	3 Months Ended
	Oct. 01, 2011	Oct. 02, 2010
Segment Reporting, Other Significant Reconciling Item [Line Items]
Production variances	$ 8,677	$ 16,367
Advertising, marketing and design	(50,692)	(37,406)
Administration and information systems	(64,260)	(57,496)
Distribution and customer service	(14,607)	(12,202)
Operating income	321,966	285,660
Unallocated Amount to Segment
Segment Reporting, Other Significant Reconciling Item [Line Items]
Operating income	$ (120,882)	$ (90,737)

XML

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) In Thousands, except Share data	Oct. 01, 2011	Jul. 02, 2011
Trade accounts receivable, allowances	$ 9,937	$ 9,544
Preferred stock, authorized	25,000,000	25,000,000
Preferred stock, par value	$ 0.01	$ 0.01
Preferred stock, issued	0	0
Common stock, authorized	1,000,000,000	1,000,000,000
Common stock, par value	$ 0.01	$ 0.01
Common stock, issued	291,310,968	288,514,529
Common stock, outstanding	291,310,968	288,514,529

XML

CONDENSED CONSOLIDATED STATEMENTS OF INCOME (USD $) In Thousands, except Per Share data	3 Months Ended
	Oct. 01, 2011	Oct. 02, 2010
Net sales	$ 1,050,359	$ 911,669
Cost of sales	285,706	235,498
Gross profit	764,653	676,171
Selling, general and administrative expenses	442,687	390,511
Operating income	321,966	285,660
Interest income, net	114	248
Other expense	(1,476)	(810)
Income before provision for income taxes	320,604	285,098
Provision for income taxes	105,621	96,222
Net income	$ 214,983	$ 188,876
Net income per share
Basic	$ 0.74	$ 0.64
Diluted	$ 0.73	$ 0.63
Shares used in computing net income per share
Basic	289,778	296,304
Diluted	296,068	301,249

XML

Derivative Instruments and Hedging Activities (Tables)

3 Months Ended

Oct. 01, 2011

Schedule of Derivative Instruments

The following tables provide information related to the Company’s derivatives:

Derivatives Designated as Hedging	Balance Sheet	Fair Value
Instruments	Classification	At October 2, 2011		At July 2, 2011
Foreign exchange contracts	Other Current Assets	$	2,924	$	2,020
Total derivative assets		$	2,924	$	2,020
Foreign exchange contracts	Accrued Liabilities	$	11,398	$	1,713
Total derivative liabilities		$	11,398	$	1,713

Schedule of Derivative Instruments, Effect on Other Comprehensive Income (Loss)

	Amount of Loss Recognized in OCI on Derivatives (Effective Portion)
	Quarter Ended
Derivatives in Cash Flow	October 1,			October 2,
Hedging Relationships	2011			2010
Foreign exchange contracts	$	(2,332	)	$	(5,816	)
Total	$	(2,332	)	$	(5,816	)

Schedule of Derivative Instruments, Gain (Loss) in Statement of Financial Performance

For the first quarter of fiscal 2012 and fiscal 2011, the amounts above are net of tax of $2,469 and $3,882, respectively.

	Amount of Loss Reclassified from Accumulated OCI into Income (Effective Portion)
Location of Loss Reclassified	Quarter Ended
from Accumulated OCI into	October 1,			October 2,
Income (Effective Portion)	2011			2010
Cost of Sales	$	(2,913	)	$	(840	)
Total	$	(2,913	)	$	(840	)

Schedule of Cash Flow Hedges Included in Accumulated Other Comprehensive Income (Loss)

Hedging activity affected accumulated other comprehensive (loss) income, net of tax, as follows:

	October 1,			July 2,
	2011			2011
Balance at prior year end balance sheet date	$	(1,465	)	$	(2,092	)
Net losses transferred to earnings		1,767			10,021
Change in fair value, net of tax		(2,332	)		(9,394	)
Balance at end of period	$	(2,030	)	$	(1,465	)

XML

Document and Entity Information	3 Months Ended
	Oct. 01, 2011	Oct. 28, 2011
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Oct. 01, 2011
Document Fiscal Year Focus	2012
Document Fiscal Period Focus	Q1
Trading Symbol	COH
Entity Registrant Name	COACH INC
Entity Central Index Key	0001116132
Current Fiscal Year End Date	--10-01
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		291,826,211

XML

Segment Reporting (Detail)	Oct. 01, 2011 Location Entity
Segment Reporting Disclosure [Line Items]
Reportable segments	2
Sales to wholesale customers, number of countries in which entity operates	20

XML

Acquisition - Additional Information (Detail) (USD $) In Thousands, unless otherwise specified		1 Months Ended
	Jul. 04, 2011	Oct. 31, 2011 Acquisition TAIWAN, PROVINCE OF CHINA	Jul. 04, 2011 SINGAPORE	Jul. 02, 2011 SINGAPORE Retail and Department Store Store
Business Acquisition [Line Items]
Percentage of domestic retail businesses acquired			100.00%
Aggregate purchase price of retail business in Singapore from the former distributor, Valiram Group	$ 7,595
Number of stores operated				5
Percentage of domestic retail business to be acquired in Taiwan		100.00%

XML

Goodwill and Intangible Assets - Additional Information (Detail) (Trademarks, USD $) In Thousands	Oct. 01, 2011	Jul. 02, 2011
Trademarks
Goodwill and Intangible Assets Disclosure [Line Items]
Intangible assets not subject to amortization	$ 9,788	$ 9,788

XML

Commitments and Contingencies

3 Months Ended

Oct. 01, 2011

Commitments and Contingencies

7. Commitments and Contingencies

At October 1, 2011, the Company had letters of credit available of $300,000, of which $167,209 were outstanding.  The letters of credit, which expire at various dates through 2014, primarily collateralize the Company’s obligation to third parties for the purchase of inventory.

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

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Fair Values of the Assets Acquired as of the Date of Acquisition (Detail) (USD $) In Thousands	Jul. 04, 2011
Schedule of Business Acquisitions, Purchase Price Allocation [Line Items]
Current assets	$ 1,684
Fixed assets	619
Goodwill	5,292
Total assets acquired	$ 7,595

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Amount of Gain or (Loss) Recognized in OCI on Derivatives (Effective Portion) (Detail) (USD $) In Thousands	3 Months Ended	12 Months Ended	3 Months Ended
	Oct. 01, 2011	Jul. 02, 2011	Oct. 01, 2011 Foreign Exchange Contract Cash Flow Hedging	Oct. 02, 2010 Foreign Exchange Contract Cash Flow Hedging	Oct. 01, 2011 Cash Flow Hedging	Oct. 02, 2010 Cash Flow Hedging
Derivative [Line Items]
Amount of gain or (loss) recognized in OCI on derivatives (effective portion)	$ (2,332)	$ (9,394)	$ (2,332)	$ (5,816)	$ (2,332)	$ (5,816)

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Fair Value Measurements - Additional Information (Detail) (USD $) In Thousands	Oct. 01, 2011	Jul. 02, 2011
Fair Value, Measurement Inputs, Disclosure [Line Items]
Short-term investments, amortized cost	$ 2,256	$ 90,592
Fair Value, Measurements, Recurring | Auction Rate Securities
Fair Value, Measurement Inputs, Disclosure [Line Items]
Fair value of auction rate security classified as a long-term investment	$ 6,000	$ 6,000
Auction Rate Securities
Fair Value, Measurement Inputs, Disclosure [Line Items]
Underlying investments scheduled maturity	2035	2035

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Segment Information (Tables)

3 Months Ended

Oct. 01, 2011

Schedule of Segment Reporting Information, by Segment

	Direct-to-				Corporate
	Consumer		Indirect		Unallocated			Total
Quarter Ended October 1, 2011
Net sales	$	910,275	$	140,084	$	-		$	1,050,359
Operating income		364,898		77,950		(120,882	)		321,966
Income before provision for income taxes		364,898		77,950		(122,244	)		320,604
Depreciation and amortization expense		21,448		2,567		8,039			32,054
Additions to long-lived assets		18,889		7,193		9,897			35,979
Quarter Ended October 2, 2010
Net sales	$	777,222	$	134,447	$	-		$	911,669
Operating income		301,469		74,928		(90,737	)		285,660
Income before provision for income taxes		301,469		74,928		(91,299	)		285,098
Depreciation and amortization expense		21,220		3,036		7,995			32,251
Additions to long-lived assets		20,026		2,171		4,593			26,790

Schedule of Unallocated Items and Eliminations

The following is a summary of the common costs not allocated in the determination of segment performance:

	Quarter Ended
	October 1,			October 2,
	2011			2010
Production variances	$	8,677		$	16,367
Advertising, marketing and design		(50,692	)		(37,406	)
Administration and information systems		(64,260	)		(57,496	)
Distribution and customer service		(14,607	)		(12,202	)
Total corporate unallocated	$	(120,882	)	$	(90,737	)

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Recent Accounting Developments

3 Months Ended

Oct. 01, 2011

Recent Accounting Developments

12. Recent Accounting Developments

In May 2011, Accounting Standards Codification 820-10 “Fair Value Measurements and Disclosures,” was amended to clarify certain disclosure requirements and improve consistency with international reporting standards. This amendment is to be applied prospectively and is effective for the Company beginning January 1, 2012. The Company does not expect its adoption to have a material effect on its consolidated financial statements.

Accounting Standards Codification Topic 220, “Comprehensive Income,” was amended in June 2011 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 is effective for the Company’s fiscal year and interim periods beginning July 1, 2012. The Company is currently evaluating this guidance, but does not expect its adoption to have a material effect on its 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 current accounting standards.  This guidance is effective for the Company’s fiscal year beginning July 1, 2012.  The Company does not expect its adoption to have a material effect on its consolidated financial statements.

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Stockholders' Equity

3 Months Ended

Oct. 01, 2011

Stockholders' Equity

3. Stockholders’ Equity

Activity for the quarters ended October 1, 2011 and October 2, 2010 in the accounts of Stockholders’ Equity is summarized below:

	Common Stockholders' Equity			Additional Paid-in- Capital		Accumulated Deficit			Accumulated Other Comprehensive Income			Total Stockholders' Equity
Balances at July 3, 2010	$	2,969		$	1,502,982	$	(30,053	)	$	29,395		$	1,505,293
Net income		-			-		188,876			-			188,876
Unrealized losses on cash flow hedging derivatives, net of tax		-			-		-			(5,364	)		(5,364	)
Translation adjustments		-			-		-			11,256			11,256
Comprehensive income													194,768
Shares issued for stock options and employee benefit plans		24			39,453		-			-			39,477
Share-based compensation		-			22,342		-			-			22,342
Excess tax benefit from share-based compensation		-			2,587		-			-			2,587
Repurchase of common stock		(36	)		-		(137,464	)		-			(137,500	)
Dividend declared		-			-		(44,294	)		-			(44,294	)
Balances at October 2, 2010	$	2,957		$	1,567,364	$	(22,935	)	$	35,287		$	1,582,673
Balances at July 2, 2011	$	2,886		$	2,000,426	$	(445,654	)	$	54,911		$	1,612,569
Net income		-			-		214,983			-			214,983
Unrealized losses on cash flow hedging derivatives, net of tax		-			-		-			(565	)		(565	)
Translation adjustments		-			-		-			7,384			7,384
Comprehensive income													221,802
Shares issued for stock options and employee benefit plans		39			66,829		-			-			66,868
Share-based compensation		-			24,606		-			-			24,606
Excess tax benefit from share-based compensation		-			14,969		-			-			14,969
Repurchase of common stock		(11	)		-		(58,989	)		-			(59,000	)
Dividend declared		-			-		(65,311	)		-			(65,311	)
Balances at October 1, 2011	$	2,914		$	2,106,830	$	(354,971	)	$	61,730		$	1,816,503

The components of accumulated other comprehensive income, as of the dates indicated, are as follows:

	October 1,			July 2,
	2011			2011
Cumulative translation adjustments	$	66,796		$	59,412
Cumulative effect of previously adopted accounting pronouncements and minimum pension liability, net of taxes		(3,036	)		(3,036	)
Net unrealized losses on cash flow hedging derivatives, net of taxes of $2,222 and $899		(2,030	)		(1,465	)
Accumulated other comprehensive income	$	61,730		$	54,911

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Share-Based Compensation - Additional Information (Detail) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended
	Oct. 01, 2011	Oct. 02, 2010
Compensation Related Costs Share Based Payments Disclosure [Line Items]
Weighted-average grant-date fair value of options granted	$ 15.34	$ 11.17
Total intrinsic value of options exercised	$ 69,909	$ 21,361
Total cash received from option exercises	91,219	50,117
Actual tax benefit realized for the tax deductions from these option exercises	26,611	7,892
Stock Options
Compensation Related Costs Share Based Payments Disclosure [Line Items]
Total unrecognized compensation cost related to non-vested awards	61,029
Total unrecognized compensation cost related to non-vested awards, recognized over a weighted-average period (in years)	1.1
Capital Units
Compensation Related Costs Share Based Payments Disclosure [Line Items]
Total unrecognized compensation cost related to non-vested awards	135,482
Total unrecognized compensation cost related to non-vested awards, recognized over a weighted-average period (in years)	1.2
Weighted-average grant-date fair value of shares granted	$ 61.03	$ 38.45
Total fair value of shares vested	$ 73,330	$ 34,608

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Goodwill and Intangible Assets

3 Months Ended

Oct. 01, 2011

Goodwill and Intangible Assets

9. Goodwill and Intangible Assets

The change in the carrying value of goodwill for the first three months of fiscal 2012 ended October 1, 2011, by operating segment, is as follows:

	Direct-to-
	Consumer		Indirect		Total
Goodwill balance at July 2, 2011	$	329,488	$	1,516	$	331,004
Acquisition of Singapore retail business		5,292		-		5,292
Foreign exchange impact		15,682		-		15,682
Goodwill balance at October 1, 2011	$	350,462	$	1,516	$	351,978

At October 1, 2011 and July 2, 2011, intangible assets not subject to amortization consisted of $9,788 of trademarks.

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Stockholders' Equity (Tables)

3 Months Ended

Oct. 01, 2011

Schedule of Stockholders Equity

Activity for the quarters ended October 1, 2011 and October 2, 2010 in the accounts of Stockholders’ Equity is summarized below:

	Common Stockholders' Equity			Additional Paid-in- Capital		Accumulated Deficit			Accumulated Other Comprehensive Income			Total Stockholders' Equity
Balances at July 3, 2010	$	2,969		$	1,502,982	$	(30,053	)	$	29,395		$	1,505,293
Net income		-			-		188,876			-			188,876
Unrealized losses on cash flow hedging derivatives, net of tax		-			-		-			(5,364	)		(5,364	)
Translation adjustments		-			-		-			11,256			11,256
Comprehensive income													194,768
Shares issued for stock options and employee benefit plans		24			39,453		-			-			39,477
Share-based compensation		-			22,342		-			-			22,342
Excess tax benefit from share-based compensation		-			2,587		-			-			2,587
Repurchase of common stock		(36	)		-		(137,464	)		-			(137,500	)
Dividend declared		-			-		(44,294	)		-			(44,294	)
Balances at October 2, 2010	$	2,957		$	1,567,364	$	(22,935	)	$	35,287		$	1,582,673
Balances at July 2, 2011	$	2,886		$	2,000,426	$	(445,654	)	$	54,911		$	1,612,569
Net income		-			-		214,983			-			214,983
Unrealized losses on cash flow hedging derivatives, net of tax		-			-		-			(565	)		(565	)
Translation adjustments		-			-		-			7,384			7,384
Comprehensive income													221,802
Shares issued for stock options and employee benefit plans		39			66,829		-			-			66,868
Share-based compensation		-			24,606		-			-			24,606
Excess tax benefit from share-based compensation		-			14,969		-			-			14,969
Repurchase of common stock		(11	)		-		(58,989	)		-			(59,000	)
Dividend declared		-			-		(65,311	)		-			(65,311	)
Balances at October 1, 2011	$	2,914		$	2,106,830	$	(354,971	)	$	61,730		$	1,816,503

Schedule of Accumulated Other Comprehensive Income (Loss)

The components of accumulated other comprehensive income, as of the dates indicated, are as follows:

	October 1,			July 2,
	2011			2011
Cumulative translation adjustments	$	66,796		$	59,412
Cumulative effect of previously adopted accounting pronouncements and minimum pension liability, net of taxes		(3,036	)		(3,036	)
Net unrealized losses on cash flow hedging derivatives, net of taxes of $2,222 and $899		(2,030	)		(1,465	)
Accumulated other comprehensive income	$	61,730		$	54,911

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Segment Information

3 Months Ended

Oct. 01, 2011

Segment Information

10. Segment Information

The Company operates its business in two reportable segments: Direct-to-Consumer and Indirect.  The Company's reportable segments represent channels of distribution that offer similar merchandise and service and utilize similar marketing strategies.  Sales of Coach products through Company-operated stores in North America, Japan, Hong Kong, Macau, mainland China and Singapore, and the Internet constitute the Direct-to-Consumer segment.  The Indirect segment includes sales to wholesale customers in over 20 countries, including the United States, and royalties earned on licensed product.  In deciding how to allocate resources and assess performance, the Company's executive officers regularly evaluate the net 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 production variances, general marketing, administration and information systems expenses, as well as distribution and consumer service expenses.

In connection with the acquisition of the retail business in Singapore, the Company evaluated the composition of its reportable segments and concluded that sales in this region should be included in the Direct-to-Consumer segment. Accordingly, prior year comparable sales and operating income have been reclassified to conform to the current year presentation.

	Direct-to-				Corporate
	Consumer		Indirect		Unallocated			Total
Quarter Ended October 1, 2011
Net sales	$	910,275	$	140,084	$	-		$	1,050,359
Operating income		364,898		77,950		(120,882	)		321,966
Income before provision for income taxes		364,898		77,950		(122,244	)		320,604
Depreciation and amortization expense		21,448		2,567		8,039			32,054
Additions to long-lived assets		18,889		7,193		9,897			35,979
Quarter Ended October 2, 2010
Net sales	$	777,222	$	134,447	$	-		$	911,669
Operating income		301,469		74,928		(90,737	)		285,660
Income before provision for income taxes		301,469		74,928		(91,299	)		285,098
Depreciation and amortization expense		21,220		3,036		7,995			32,251
Additions to long-lived assets		20,026		2,171		4,593			26,790

The following is a summary of the common costs not allocated in the determination of segment performance:

	Quarter Ended
	October 1,			October 2,
	2011			2010
Production variances	$	8,677		$	16,367
Advertising, marketing and design		(50,692	)		(37,406	)
Administration and information systems		(64,260	)		(57,496	)
Distribution and customer service		(14,607	)		(12,202	)
Total corporate unallocated	$	(120,882	)	$	(90,737	)

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Earnings Per Share - Additional Information (Detail) (USD $) In Thousands, except Per Share data	3 Months Ended
	Oct. 01, 2011	Oct. 02, 2010
Earnings Per Share Disclosure [Line Items]
Options to purchase shares of common stock excluded from the computation of diluted earnings per share	2,067	7,235
Options' exercise prices, lower limit	$ 59.97	$ 38.41
Options' exercise prices, upper limit	$ 66.76	$ 51.56

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Derivative Instruments and Hedging Activities

3 Months Ended

Oct. 01, 2011

Derivative Instruments and Hedging Activities

8. Derivative Instruments and Hedging Activities

Substantially all purchases and sales involving international parties are denominated in U.S. dollars, which limits the Company’s exposure to foreign currency exchange rate fluctuations.  However, the Company is exposed to market risk from foreign currency exchange risk related to Coach Japan’s and Coach Canada’s U.S. dollar-denominated inventory purchases and Coach Japan’s $109,110 U.S. dollar-denominated fixed rate intercompany loan.  Coach uses derivative financial instruments to manage these risks.  These derivative transactions are in accordance with the Company’s risk management policies.  Coach does not enter into derivative transactions for speculative or trading purposes.

Coach Japan and Coach Canada enter into certain foreign currency derivative contracts, primarily zero-cost collar options, to manage the exchange rate risk related to their inventory purchases.  As of October 1, 2011 and July 2, 2011, $168,993 and $171,030 of foreign currency forward contracts were outstanding, respectively.

Coach Japan’s cross currency swap transaction requires an exchange of a yen fixed interest rate for a U.S. dollar fixed interest rate and an exchange of yen and U.S. dollar based notional values at maturity on December 29, 2011.

The Company’s derivative instruments are designated as cash flow hedges. The effective portion of gains or losses on the derivative instruments are reported as a component of other comprehensive income and reclassified into earnings in the same periods during which the hedged transaction affects earnings. The ineffective portion of gains or losses on the derivative instruments are recognized in current earnings and are included within net cash provided by operating activities.

The following tables provide information related to the Company’s derivatives:

Derivatives Designated as Hedging	Balance Sheet	Fair Value
Instruments	Classification	At October 2, 2011		At July 2, 2011
Foreign exchange contracts	Other Current Assets	$	2,924	$	2,020
Total derivative assets		$	2,924	$	2,020
Foreign exchange contracts	Accrued Liabilities	$	11,398	$	1,713
Total derivative liabilities		$	11,398	$	1,713

	Amount of Loss Recognized in OCI on Derivatives (Effective Portion)
	Quarter Ended
Derivatives in Cash Flow	October 1,			October 2,
Hedging Relationships	2011			2010
Foreign exchange contracts	$	(2,332	)	$	(5,816	)
Total	$	(2,332	)	$	(5,816	)

For the first quarter of fiscal 2012 and fiscal 2011, the amounts above are net of tax of $2,469 and $3,882, respectively.

	Amount of Loss Reclassified from Accumulated OCI into Income (Effective Portion)
Location of Loss Reclassified	Quarter Ended
from Accumulated OCI into	October 1,			October 2,
Income (Effective Portion)	2011			2010
Cost of Sales	$	(2,913	)	$	(840	)
Total	$	(2,913	)	$	(840	)

During the three months ended October 1, 2011 and October 2, 2010, there were no material gains or losses recognized in income due to hedge ineffectiveness.

The Company expects that $3,311 of net derivative losses included in accumulated other comprehensive income at October 1, 2011 will be reclassified into earnings within the next 12 months.  This amount will vary due to fluctuations in the Japanese yen and Canadian dollar exchange rates.

Hedging activity affected accumulated other comprehensive (loss) income, net of tax, as follows:

	October 1,			July 2,
	2011			2011
Balance at prior year end balance sheet date	$	(1,465	)	$	(2,092	)
Net losses transferred to earnings		1,767			10,021
Change in fair value, net of tax		(2,332	)		(9,394	)
Balance at end of period	$	(2,030	)	$	(1,465	)

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Basis of Presentation and Organization

3 Months Ended

Oct. 01, 2011

Basis of Presentation and Organization

1. Basis of Presentation and Organization

The accompanying unaudited condensed consolidated financial statements include the accounts of Coach, Inc. (“Coach” or the “Company”) and all 100% owned subsidiaries.  These condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”).  Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted from this report as is permitted by SEC rules and regulations.  However, the Company believes that the disclosures are adequate to make the information presented not misleading.  This report should be read in conjunction with the audited consolidated financial statements and notes thereto, included in the Company’s Annual Report on Form 10-K filed with the SEC for the year ended July 2, 2011 (“fiscal 2011”).

In the opinion of management, the accompanying unaudited condensed consolidated financial statements contain all normal and recurring adjustments necessary to present fairly the consolidated financial position, results of operations and changes in cash flows of the Company for the interim periods presented.  The results of operations for the quarter ended October 1, 2011 are not necessarily indicative of results to be expected for the entire fiscal year, which will end on June 30, 2012 (“fiscal 2012”).

The Company evaluated subsequent events through the date these financial statements were issued, and concluded there were no events to recognize or disclose.

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Earnings Per Share

3 Months Ended

Oct. 01, 2011

Earnings Per Share

4. Earnings Per Share

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 employee benefit and share awards.

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

	Quarter Ended
	October 1,		October 2,
	2011		2010
Net income	$	214,983	$	188,876
Total weighted-average basic shares		289,778		296,304
Dilutive securities:
Employee benefit and share award plans		1,534		1,380
Stock option programs		4,756		3,565
Total weighted-average diluted shares		296,068		301,249
Net income per share:
Basic	$	0.74	$	0.64
Diluted	$	0.73	$	0.63

At October 1, 2011, options to purchase 2,067 shares of common stock were outstanding but not included in the computation of diluted earnings per share, as these options’ exercise prices, ranging from $59.97 to $66.76, were greater than the average market price of the common shares.

At October 2, 2010, options to purchase 7,235 shares of common stock were outstanding but not included in the computation of diluted earnings per share, as these options’ exercise prices, ranging from $38.41 to $51.56, were greater than the average market price of the common shares.

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Commitments and Contingencies - Additional Information (Detail) (USD $) In Thousands	Oct. 01, 2011
Commitments and Contingencies Disclosure [Line Items]
Letters of credit available	$ 300,000
Letters of credit amount outstanding	$ 167,209
Letter of Credit
Commitments and Contingencies Disclosure [Line Items]
Letters of credit expiration	2014

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Reconciliation of Weighted Average Shares Outstanding and Calculation of Basic and Diluted Earnings Per Share (Detail) (USD $) In Thousands, except Per Share data	3 Months Ended
	Oct. 01, 2011	Oct. 02, 2010
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items]
Net income	$ 214,983	$ 188,876
Total weighted-average basic shares	289,778	296,304
Dilutive securities:
Employee benefit and share award plans	1,534	1,380
Stock option programs	4,756	3,565
Total weighted-average diluted shares	296,068	301,249
Net income per share:
Basic	$ 0.74	$ 0.64
Diluted	$ 0.73	$ 0.63

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Stock Repurchase Program - Additional Information (Detail) (USD $) In Thousands, except Per Share data	3 Months Ended
	Oct. 01, 2011	Oct. 02, 2010
Equity, Class of Treasury Stock [Line Items]
Common stock repurchased and retired	1,067	3,585
Common stock repurchased and retired, average cost per share	$ 55.30	$ 38.35
Amount remaining in the stock repurchase program	$ 902,627

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Share-Based Compensation

3 Months Ended

Oct. 01, 2011

Share-Based Compensation

5. Share-Based Compensation

The following table shows the total compensation cost charged against income for share-based compensation plans and the related tax benefits recognized in the income statement for the periods indicated:

	Quarter Ended
	October 1,		October 2,
	2011		2010
Share-based compensation expense	$	24,606	$	22,342
Income tax benefit related to share-based compensation expense		7,208		7,828

Stock Options

A summary of option activity under the Coach stock option plans as of October 1, 2011 and changes during the period then ended is as follows:

	Number of Options Outstanding			Weighted- Average Exercise Price
Outstanding at July 2, 2011		16,832		$	31.73
Granted		2,074			61.71
Exercised		(2,856	)		31.94
Forfeited or expired		(143	)		36.08
Outstanding at October 1, 2011		15,907			35.58
Vested and expected to vest at October 1, 2011		15,777			32.35
Exercisable at October 1, 2011		9,930			29.88

At October 1, 2011, $61,029 of total unrecognized compensation cost related to non-vested stock option awards is expected to be recognized over a weighted-average period of 1.1 years.

The weighted-average grant-date fair value of individual options granted during the first quarter of fiscal 2012 and fiscal 2011 was $15.34 and $11.17, respectively.  The total intrinsic value of options exercised during the first quarter of fiscal 2012 and fiscal 2011 was $69,909 and $21,361, respectively.  During the first quarter of fiscal 2012 and fiscal 2011 the total cash received from these option exercises was $91,219 and $50,117, respectively, and the actual tax benefit realized from these option exercises was $26,611 and $7,892, respectively.

Share Unit Awards

The grant-date fair value of each Coach share unit award is equal to the fair value of Coach stock at the grant date.  The following table summarizes information about non-vested share units as of and for the period ended October 1, 2011:

	Number of Non-vested Share Units			Weighted- Average Grant- Date Fair Value
Non-vested at July 2, 2011		4,321		$	33.81
Granted		1,393			61.03
Vested		(1,276	)		31.07
Forfeited		(117	)		32.28
Non-vested at October 1, 2011		4,321			43.06

At October 1, 2011, $135,482 of total unrecognized compensation cost related to non-vested share awards is expected to be recognized over a weighted-average period of 1.2 years.

The weighted-average grant-date fair value of share awards granted during the first quarter of fiscal 2012 and fiscal 2011 was $61.03 and $38.45, respectively.  The total fair value of shares vested during the first quarter of fiscal 2012 and fiscal 2011 was $73,330 and $34,608, respectively.

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Fair Value of Derivatives Designated as Hedging Instruments (Detail) (Designated as Hedging Instrument, USD $) In Thousands	Oct. 01, 2011	Jul. 02, 2011
Derivatives, Fair Value [Line Items]
Derivative assets	$ 2,924	$ 2,020
Derivative liabilities	11,398	1,713
Foreign Exchange Contract | Other Current Assets
Derivatives, Fair Value [Line Items]
Derivative assets	2,924	2,020
Foreign Exchange Contract | Accrued Liabilities
Derivatives, Fair Value [Line Items]
Derivative liabilities	$ 11,398	$ 1,713

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Summary of the Activity in the Accounts of Stockholders' Equity (Detail) (USD $) In Thousands	3 Months Ended
	Oct. 01, 2011	Oct. 02, 2010
Beginning Balance	$ 1,612,569	$ 1,505,293
Net income	214,983	188,876
Unrealized losses on cash flow hedging derivatives, net of tax	(565)	(5,364)
Translation adjustments	7,384	11,256
Comprehensive income	221,802	194,768
Shares issued for stock options and employee benefit plans	66,868	39,477
Share-based compensation	24,606	22,342
Excess tax benefit from share-based compensation	14,969	2,587
Repurchase of common stock	(59,000)	(137,500)
Dividend declared	(65,311)	(44,294)
Ending Balance	1,816,503	1,582,673
Common Stockholders' Equity
Beginning Balance	2,886	2,969
Shares issued for stock options and employee benefit plans	39	24
Repurchase of common stock	(11)	(36)
Ending Balance	2,914	2,957
Additional Paid-in- Capital
Beginning Balance	2,000,426	1,502,982
Shares issued for stock options and employee benefit plans	66,829	39,453
Share-based compensation	24,606	22,342
Excess tax benefit from share-based compensation	14,969	2,587
Ending Balance	2,106,830	1,567,364
Accumulated Deficit
Beginning Balance	(445,654)	(30,053)
Net income	214,983	188,876
Repurchase of common stock	(58,989)	(137,464)
Dividend declared	(65,311)	(44,294)
Ending Balance	(354,971)	(22,935)
Accumulated Other Comprehensive Income
Beginning Balance	54,911	29,395
Unrealized losses on cash flow hedging derivatives, net of tax	(565)	(5,364)
Translation adjustments	7,384	11,256
Ending Balance	$ 61,730	$ 35,287

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Total Compensation Cost and Related Tax Benefits (Detail) (USD $) In Thousands	3 Months Ended
	Oct. 01, 2011	Oct. 02, 2010
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation expense	$ 24,606	$ 22,342
Income tax benefit related to share-based compensation expense	$ 7,208	$ 7,828

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Derivative Instruments and Hedging Activities - Additional Information (Detail) (USD $) In Thousands	3 Months Ended
	Oct. 01, 2011	Oct. 02, 2010	Jul. 02, 2011
Derivative Instruments and Hedging Activities Disclosure [Line Items]
Coach Japan's U.S. dollar-denominated fixed rate intercompany loan	$ 109,110
Amount of gain or (loss) recognized in OCI on derivatives (effective portion), tax	2,469	3,882
Expected amount of net derivative losses included in accumulated other comprehensive income that will be reclassified into earnings within the next 12 months	3,311
Outstanding foreign currency forward contracts	$ 168,993		$ 171,030

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Components of Accumulated Other Comprehensive Income (Parenthetical) (Detail) (USD $) In Thousands	Oct. 01, 2011	Jul. 02, 2011
Accumulated Other Comprehensive Income (Loss) [Line Items]
Net unrealized losses on cash flow hedging derivatives, taxes	$ 2,222	$ 899

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Acquisition (Tables)

3 Months Ended

Oct. 01, 2011

Schedule of Recognized Identified Assets Acquired and Liabilities Assumed

The following table summarizes the estimated fair values of the assets acquired as of the date of acquisition:

Assets Acquired	Estimated Fair Value at July 3, 2011
Current assets	$	1,684
Fixed assets		619
Goodwill		5,292
Total assets acquired	$	7,595

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Fair Value Measurements

3 Months Ended

Oct. 01, 2011

Fair Value Measurements

6. Fair Value Measurements

In accordance with Accounting Standards Codification (“ASC”) 820-10, “Fair Value Measurements and Disclosures,” the Company 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.  Coach currently does not have any Level 1 financial 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 assets and liabilities at October 1, 2011 and July 2, 2011:

	Level 2				Level 3
	October 1,		July 2,		October 1,		July 2,
	2011		2011		2011		2011
Assets:
Long-term investment - auction rate security (a)	$	-	$	-	$	6,000	$	6,000
Derivative assets -  zero-cost collar options (b)		2,924		2,020		-		-
Total	$	2,924	$	2,020	$	6,000	$	6,000
Liabilities:
Derivative liabilities - zero-cost collar options (b)	$	5,257	$	1,062	$	-	$	-
Derivative liabilities - cross-currency swap (c)		-		-		6,141		651
Total	$	5,257	$	1,062	$	6,141	$	651

(a) The fair value of the security is determined using a model that takes into consideration the financial conditions of the issuer and the bond insurer, current market conditions and the value of the collateral bonds.

(b) The Company enters into zero-cost collar options to manage its exposure to foreign currency exchange rate fluctuations resulting from Coach Japan's and Coach Canada’s U.S. dollar-denominated inventory purchases.  The fair value of these cash flow hedges is primarily based on the forward curves of the specific indices upon which settlement is based and includes an adjustment for the counterparty’s or Company’s credit risk.

(c) The Company is a party to a cross-currency swap transaction to manage its exposure to foreign currency exchange rate fluctuations resulting from Coach Japan's U.S. dollar-denominated fixed rate intercompany loan.  The fair value of this cash flow hedge is primarily based on the forward curves of the specific indices upon which settlement is based and includes an adjustment for the Company's credit risk.

As of October 1, 2011 and July 2, 2011, the Company’s investments included an auction rate security (“ARS”), deemed a long-term investment classified within other assets, as the auction for this security has been unsuccessful.  The underlying investments of the ARS are scheduled to mature in 2035.  We have determined that the significant majority of the inputs used to value this security fall within Level 3 of the fair value hierarchy as the inputs are based on unobservable estimates.  The fair value of the Company’s ARS has been $6,000 since the end of the second quarter of fiscal 2009.

As of October 1, 2011 and July 2, 2011, the fair value of the Company’s cross-currency swap derivatives were included within accrued liabilities.  The Company uses a management model to value these derivatives, which includes a combination of observable inputs, such as tenure of the agreement and notional amount and unobservable inputs, such as the Company’s credit rating.  The table below presents the changes in the fair value of the cross-currency swaps during the first three months of fiscal 2012 and 2011:

	Cross-Currency Swaps
Balance at July 2, 2011	$	651
Unrealized loss, recorded in accumulated other comprehensive income		5,490
Balance at October 1, 2011	$	6,141
Balance at July 3, 2010	$	2,418
Unrealized loss, recorded in accumulated other comprehensive income		6,905
Balance at October 2, 2010	$	9,323

The Company’s short-term investments of $2,256 and $90,592 as of October 1, 2011 and July 2, 2011, respectively, consist of U.S. treasury bills and commercial paper which are classified as held-to-maturity based on our positive intent and ability to hold the securities to maturity.  They are stated at amortized cost, which approximates fair market value due to their short maturities.

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Share-Based Compensation (Tables)

3 Months Ended

Oct. 01, 2011

Schedule of Employee Service Share-based Compensation, Allocation of Recognized Period Costs

The following table shows the total compensation cost charged against income for share-based compensation plans and the related tax benefits recognized in the income statement for the periods indicated:

	Quarter Ended
	October 1,		October 2,
	2011		2010
Share-based compensation expense	$	24,606	$	22,342
Income tax benefit related to share-based compensation expense		7,208		7,828

Schedule of Share-based Compensation, Stock Options, Activity

A summary of option activity under the Coach stock option plans as of October 1, 2011 and changes during the period then ended is as follows:

	Number of Options Outstanding			Weighted- Average Exercise Price
Outstanding at July 2, 2011		16,832		$	31.73
Granted		2,074			61.71
Exercised		(2,856	)		31.94
Forfeited or expired		(143	)		36.08
Outstanding at October 1, 2011		15,907			35.58
Vested and expected to vest at October 1, 2011		15,777			32.35
Exercisable at October 1, 2011		9,930			29.88

Schedule of Nonvested Share Activity

The following table summarizes information about non-vested share units as of and for the period ended October 1, 2011:

	Number of Non-vested Share Units			Weighted- Average Grant- Date Fair Value
Non-vested at July 2, 2011		4,321		$	33.81
Granted		1,393			61.03
Vested		(1,276	)		31.07
Forfeited		(117	)		32.28
Non-vested at October 1, 2011		4,321			43.06

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Changes in Fair Value of Cross-Currency Swaps (Detail) (USD $) In Thousands	3 Months Ended
	Oct. 01, 2011	Oct. 02, 2010
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Unrealized loss, recorded in accumulated other comprehensive income	$ (565)	$ (5,364)
Fair Value, Measurements, Recurring | Cross Currency Swap
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Beginning Balance	651	2,418
Unrealized loss, recorded in accumulated other comprehensive income	5,490	6,905
Ending Balance	$ 6,141	$ 9,323

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Components of Accumulated Other Comprehensive Income (Detail) (USD $) In Thousands	Oct. 01, 2011	Jul. 02, 2011	Jul. 03, 2010
Accumulated Other Comprehensive Income (Loss) [Line Items]
Cumulative translation adjustments	$ 66,796	$ 59,412
Cumulative effect of previously adopted accounting pronouncements and minimum pension liability, net of taxes	(3,036)	(3,036)
Net unrealized losses on cash flow hedging derivatives, net of taxes of $2,222 and $899	(2,030)	(1,465)	(2,092)
Accumulated other comprehensive income	$ 61,730	$ 54,911

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) In Thousands	3 Months Ended
	Oct. 01, 2011	Oct. 02, 2010
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$ 214,983	$ 188,876
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	32,054	32,251
Provision for bad debt	3,083	2,015
Share-based compensation	24,606	22,342
Excess tax benefit from share-based awards	(14,969)	(2,587)
Deferred income taxes	34,289	9,896
Other, net	1,366	(4,408)
Changes in operating assets and liabilities:
Increase in trade accounts receivable	(10,816)	(23,749)
Increase in inventories	(102,017)	(97,681)
Decrease in other assets	7,224	4,443
Increase (decrease) in accounts payable	24,646	(1,935)
Increase in accrued liabilities	1,234	15,093
Increase in other liabilities	9,283	32,900
Net cash provided by operating activities	224,966	177,456
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of interest in equity method investment		(776)
Acquisition of distributor	(7,595)
Purchases of property and equipment	(30,895)	(23,080)
Purchases of investments		(90,592)
Proceeds from maturities and sales of investments		99,928
Net cash used in investing activities	(38,490)	(14,520)
CASH FLOWS FROM FINANCING ACTIVITIES
Dividend payment	(65,253)	(44,774)
Repurchase of common stock	(59,000)	(137,500)
Repayment of long-term debt	(91)	(86)
Proceeds from share-based awards, net	66,868	39,477
Excess tax benefit from share-based awards	14,969	2,587
Net cash used in financing activities	(42,507)	(140,296)
Effect of changes in foreign exchange rates on cash and cash equivalents	1,968	2,261
Increase in cash and cash equivalents	145,937	24,901
Cash and cash equivalents at beginning of period	699,782	596,470
Cash and cash equivalents at end of period	$ 845,719	$ 621,371

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Fair Value Measurements (Tables)

3 Months Ended

Oct. 01, 2011

Fair Value, by Balance Sheet Grouping

The following table shows the fair value measurements of the Company’s assets and liabilities at October 1, 2011 and July 2, 2011:

	Level 2				Level 3
	October 1,		July 2,		October 1,		July 2,
	2011		2011		2011		2011
Assets:
Long-term investment - auction rate security (a)	$	-	$	-	$	6,000	$	6,000
Derivative assets -  zero-cost collar options (b)		2,924		2,020		-		-
Total	$	2,924	$	2,020	$	6,000	$	6,000
Liabilities:
Derivative liabilities - zero-cost collar options (b)	$	5,257	$	1,062	$	-	$	-
Derivative liabilities - cross-currency swap (c)		-		-		6,141		651
Total	$	5,257	$	1,062	$	6,141	$	651

(a) The fair value of the security is determined using a model that takes into consideration the financial conditions of the issuer and the bond insurer, current market conditions and the value of the collateral bonds.

(b) The Company enters into zero-cost collar options to manage its exposure to foreign currency exchange rate fluctuations resulting from Coach Japan's and Coach Canada’s U.S. dollar-denominated inventory purchases.  The fair value of these cash flow hedges is primarily based on the forward curves of the specific indices upon which settlement is based and includes an adjustment for the counterparty’s or Company’s credit risk.

(c) The Company is a party to a cross-currency swap transaction to manage its exposure to foreign currency exchange rate fluctuations resulting from Coach Japan's U.S. dollar-denominated fixed rate intercompany loan.  The fair value of this cash flow hedge is primarily based on the forward curves of the specific indices upon which settlement is based and includes an adjustment for the Company's credit risk.

Fair Value, Liabilities Measured on Recurring Basis

The table below presents the changes in the fair value of the cross-currency swaps during the first three months of fiscal 2012 and 2011:

	Cross-Currency Swaps
Balance at July 2, 2011	$	651
Unrealized loss, recorded in accumulated other comprehensive income		5,490
Balance at October 1, 2011	$	6,141
Balance at July 3, 2010	$	2,418
Unrealized loss, recorded in accumulated other comprehensive income		6,905
Balance at October 2, 2010	$	9,323

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Amount of Gain or (Loss) Reclassified from Accumulated OCI into Income (Detail) (Cash Flow Hedging, USD $) In Thousands	3 Months Ended
	Oct. 01, 2011	Oct. 02, 2010
Derivative Instruments, Gain (Loss) [Line Items]
Amount of loss reclassified from Accumulated OCI into Income (effective portion)	$ (2,913)	$ (840)
Foreign Exchange Contract | Cost of Sales
Derivative Instruments, Gain (Loss) [Line Items]
Amount of loss reclassified from Accumulated OCI into Income (effective portion)	$ (2,913)	$ (840)

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Goodwill and Intangible Assets (Tables)

3 Months Ended

Oct. 01, 2011

Schedule of Goodwill

The change in the carrying value of goodwill for the first three months of fiscal 2012 ended October 1, 2011, by operating segment, is as follows:

	Direct-to-
	Consumer		Indirect		Total
Goodwill balance at July 2, 2011	$	329,488	$	1,516	$	331,004
Acquisition of Singapore retail business		5,292		-		5,292
Foreign exchange impact		15,682		-		15,682
Goodwill balance at October 1, 2011	$	350,462	$	1,516	$	351,978

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Acquisition

3 Months Ended

Oct. 01, 2011

Acquisition

2. Acquisition

On July 3, 2011, Coach acquired 100% of its domestic retail business in Singapore from the former distributor, Valiram Group, for an aggregate purchase price of $7,595. The results of the acquired business have been included in the consolidated financial statements since July 3, 2011 within the Direct-to-Consumer segment. This acquisition will provide the Company with greater control over the brand in Singapore, enabling Coach to raise brand awareness and grow market share with regional consumers.

The following table summarizes the estimated fair values of the assets acquired as of the date of acquisition:

Assets Acquired	Estimated Fair Value at July 3, 2011
Current assets	$	1,684
Fixed assets		619
Goodwill		5,292
Total assets acquired	$	7,595

Prior to this acquisition, Valiram Group operated five retail and department store locations in Singapore. Management believes the strength of these established locations supported a premium above the fair value of the individual assets acquired.  Unaudited pro forma information related to these acquisitions is not included as the impact of this transaction is not material to the consolidated results of the Company.

During October 2011, the Company entered into an agreement to acquire 100% of its domestic retail business in Taiwan from the current distributor, with the transition expected in early January 2012.

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Stock Repurchase Program

3 Months Ended

Oct. 01, 2011

Stock Repurchase Program

11. Stock Repurchase Program

Purchases of Coach’s common stock are made subject to market conditions and at prevailing market prices, through the open market.  Repurchased shares of common stock become authorized but unissued shares and may be issued in the future for general corporate and other purposes.  The Company may terminate or limit the stock repurchase program at any time.

Coach accounts for stock repurchases and retirements by allocating the repurchase price to common stock, additional paid-in-capital and retained earnings.  The repurchase price allocation is based upon the equity contribution associated with historical issuances, beginning with the earliest issuance.  During the fourth quarter of fiscal 2010, cumulative stock repurchases allocated to retained earnings have resulted in an accumulated deficit balance.  Since its initial public offering, the Company has not experienced a net loss in any fiscal year, and the net accumulated deficit balance in stockholders’ equity is attributable to the cumulative stock repurchase activity.

For the first quarter of fiscal 2012 and fiscal 2011, the Company repurchased and retired 1,067 and 3,585 shares of common stock at an average cost of $55.30 and $38.35 per share, respectively.  As of October 1, 2011, Coach had $902,627 remaining in the stock repurchase program.

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Summary of Option Activity (Detail) (USD $) In Thousands, except Per Share data	3 Months Ended
	Oct. 01, 2011
Number of Outstanding Options
Beginning Balance	16,832
Granted	2,074
Exercised	(2,856)
Forfeited or expired	(143)
Ending Balance	15,907
Vested and expected to vest at October 1, 2011	15,777
Exercisable at October 1, 2011	9,930
Weighted-Average Exercise Price
Beginning Balance	$ 31.73
Granted	$ 61.71
Exercised	$ 31.94
Forfeited or expired	$ 36.08
Ending Balance	$ 35.58
Vested and expected to vest at October 1, 2011	$ 32.35
Exercisable at October 1, 2011	$ 29.88

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Earnings Per Share (Tables)

3 Months Ended

Oct. 01, 2011

Schedule of Calculation of Numerator and Denominator in Earnings Per Share

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

	Quarter Ended
	October 1,		October 2,
	2011		2010
Net income	$	214,983	$	188,876
Total weighted-average basic shares		289,778		296,304
Dilutive securities:
Employee benefit and share award plans		1,534		1,380
Stock option programs		4,756		3,565
Total weighted-average diluted shares		296,068		301,249
Net income per share:
Basic	$	0.74	$	0.64
Diluted	$	0.73	$	0.63

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CONDENSED CONSOLIDATED BALANCE SHEETS (USD $) In Thousands	Oct. 01, 2011	Jul. 02, 2011
Current Assets:
Cash and cash equivalents	$ 845,719	$ 699,782
Short-term investments	2,256	2,256
Trade accounts receivable, less allowances of $9,937 and $9,544, respectively	153,061	142,898
Inventories	519,586	421,831
Other current assets	168,526	185,621
Total current assets	1,689,148	1,452,388
Property and equipment, net	586,914	582,348
Goodwill	351,978	331,004
Other assets	250,038	269,376
Total assets	2,878,078	2,635,116
Current Liabilities:
Accounts payable	144,244	118,612
Accrued liabilities	486,329	473,610
Current portion of long-term debt	800	795
Total current liabilities	631,373	593,017
Long-term debt	23,264	23,360
Other liabilities	406,938	406,170
Total liabilities	1,061,575	1,022,547
See note on commitments and contingencies
Stockholders' Equity:
Preferred stock: (authorized 25,000,000 shares; $0.01 par value) none issued
Common stock: (authorized 1,000,000,000 shares; $0.01 par value) issued and outstanding - 291,310,968 and 288,514,529 shares, respectively	2,914	2,886
Additional paid-in-capital	2,106,830	2,000,426
Accumulated deficit	(354,971)	(445,654)
Accumulated other comprehensive income	61,730	54,911
Total stockholders' equity	1,816,503	1,612,569
Total liabilities and stockholders' equity	$ 2,878,078	$ 2,635,116

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Summary of Information about Non-Vested Share Units (Detail) (Capital Units, USD $) In Thousands, except Per Share data	3 Months Ended
	Oct. 01, 2011	Oct. 02, 2010
Capital Units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Beginning Balance	4,321
Granted	1,393
Vested	(1,276)
Forfeited	(117)
Ending Balance	4,321
Beginning Balance	$ 33.81
Granted	$ 61.03	$ 38.45
Vested	$ 31.07
Forfeited	$ 32.28
Ending Balance	$ 43.06

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Segment Information (Detail) (USD $) In Thousands	3 Months Ended
	Oct. 01, 2011	Oct. 02, 2010
Segment Reporting Information [Line Items]
Net sales	$ 1,050,359	$ 911,669
Operating income	321,966	285,660
Income before provision for income taxes	320,604	285,098
Depreciation and amortization expense	32,054	32,251
Additions to long-lived assets	35,979	26,790
Direct to Consumer
Segment Reporting Information [Line Items]
Net sales	910,275	777,222
Operating income	364,898	301,469
Income before provision for income taxes	364,898	301,469
Depreciation and amortization expense	21,448	21,220
Additions to long-lived assets	18,889	20,026
Indirect
Segment Reporting Information [Line Items]
Net sales	140,084	134,447
Operating income	77,950	74,928
Income before provision for income taxes	77,950	74,928
Depreciation and amortization expense	2,567	3,036
Additions to long-lived assets	7,193	2,171
Corporate Unallocated
Segment Reporting Information [Line Items]
Operating income	(120,882)	(90,737)
Income before provision for income taxes	(122,244)	(91,299)
Depreciation and amortization expense	8,039	7,995
Additions to long-lived assets	$ 9,897	$ 4,593

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Hedging Activity Affected Accumulated Other Comprehensive (Loss) Income, Net of Tax (Detail) (USD $) In Thousands	3 Months Ended	12 Months Ended
	Oct. 01, 2011	Jul. 02, 2011
Beginning Balance	$ (1,465)	$ (2,092)
Net losses transferred to earnings	1,767	10,021
Change in fair value, net of tax	(2,332)	(9,394)
Ending Balance	$ (2,030)	$ (1,465)

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Change in Carrying Value of Goodwill, by Operating Segment (Detail) (USD $) In Thousands	3 Months Ended
	Oct. 01, 2011	Oct. 01, 2011 Direct to Consumer	Oct. 01, 2011 Indirect	Jul. 02, 2011 Indirect
Goodwill [Line Items]
Beginning balance	$ 331,004	$ 329,488	$ 1,516	$ 1,516
Acquisition of Singapore retail business	5,292	5,292
Foreign exchange impact	15,682	15,682
Ending balance	$ 351,978	$ 350,462	$ 1,516	$ 1,516

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Fair Value Measurements of Assets and Liabilities (Detail) (Fair Value, Measurements, Recurring, USD $) In Thousands	Oct. 01, 2011		Jul. 02, 2011		Oct. 02, 2010	Jul. 03, 2010
Fair Value, Inputs, Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total	$ 2,924		$ 2,020
Total	5,257		1,062
Fair Value, Inputs, Level 2 | Foreign Exchange Contract
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative assets	2,924	[1]	2,020	[1]
Derivative liabilities	5,257	[1]	1,062	[1]
Fair Value, Inputs, Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total	6,000		6,000
Total	6,141		651
Fair Value, Inputs, Level 3 | Auction Rate Securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Long-term investment	6,000	[2]	6,000	[2]
Fair Value, Inputs, Level 3 | Cross Currency Swap
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative liabilities	6,141	[3]	651	[3]
Auction Rate Securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Long-term investment	6,000		6,000
Cross Currency Swap
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative liabilities	$ 6,141		$ 651		$ 9,323	$ 2,418

[1] The Company enters into zero-cost collar options to manage its exposure to foreign currency exchange rate fluctuations resulting from Coach Japan's and Coach Canada's U.S. dollar-denominated inventory purchases. The fair value of these cash flow hedges is primarily based on the forward curves of the specific indices upon which settlement is based and includes an adjustment for the counterparty's or Company's credit risk.

[2] The fair value of the security is determined using a model that takes into consideration the financial conditions of the issuer and the bond insurer, current market conditions and the value of the collateral bonds.

[3] The Company is a party to a cross-currency swap transaction to manage its exposure to foreign currency exchange rate fluctuations resulting from Coach Japan's U.S. dollar-denominated fixed rate intercompany loan. The fair value of this cash flow hedge is primarily based on the forward curves of the specific indices upon which settlement is based and includes an adjustment for the Company's credit risk.