Tapestry (TPR) 10-K risk factor changes: FY2015 vs FY2014

You should consider carefully all of the information set forth or incorporated by reference in this document and, in particular, the following risk factors associated with the business of [removed: Coach] [added: the Company] and forward-looking information in this document.

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

Demand for our products, and consumer spending in the premium handbag and accessories market generally, is significantly impacted by trends in consumer confidence, general business conditions, interest rates, [added: foreign currency exchange rates,] the availability of consumer credit, and taxation.

Consumer purchases of discretionary luxury items, such as [removed: Coach] [added: the Company's] products, tend to decline during recessionary periods or periods of sustained high unemployment, when disposable income is lower.

We currently plan to open additional Coach [added: and Stuart Weitzman] stores in [added: mainland] China, Europe and other international markets, [added: both directly] and [removed: we have entered into] [added: through] strategic [removed: agreements with various partners to expand our operations in South America.][added: partners.]

[removed: Many] [added: In addition, many] of these [removed: countries] [added: markets] have different operational characteristics, including but not limited to employment and labor, transportation, logistics, real estate, environmental regulations and local reporting or legal requirements.

Key operational and cost elements in order to fund and execute this plan include: (i) the [removed: future] investment [removed: of approximately $500 million] in capital improvements in our stores and wholesale [removed: locations;] [added: locations to drive comparable sales improvement;] (ii) the optimization [added: and streamlining] of our [removed: North American store fleet including] [added: organizational model as well as] the closure of [removed: approximately 70] underperforming [removed: locations,] [added: stores in North America, and select International stores,] (iii) the realignment of inventory levels [added: and mix] to reflect our elevated product [removed: strategy;] [added: strategy and consumer preferences;] (iv) the investment [removed: of approximately $50 million] in incremental advertising costs to [removed: further] [added: elevate consumer perception of our brand, drive sales growth and] promote our new strategy; and (v) the significant scale-back of our promotional [removed: cadence,] [added: cadence in an increased global promotional environment,] particularly within our outlet Internet sales site.

[removed: However, there] [added: There] is no assurance that such efforts will be successful in achieving long-term growth or changing the perception of [removed: Coach] [added: the Company] from an accessories brand to a global lifestyle brand.

Refer to Part II, Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations" and Note 3, [removed: "Transformation, Restructuring] [added: "Transformation] and Other [removed: Related] Actions," for further information regarding the Transformation Plan.

Our business [removed: is] [added: may be] subject to increased costs due to excess inventories [added: and a decline in profitability as a result of increasing pressure on margins] if we misjudge the demand for our products.

If [removed: Coach misjudges] [added: we misjudge] the market for [removed: its] [added: our] products [removed: it] [added: we] may be faced with significant excess inventories for some products and missed opportunities for other products.

If that occurs, we may be forced to rely on destruction, donation, markdowns or promotional sales to dispose of excess, slow-moving inventory, which may negatively impact our gross margin, overall profitability and efficacy of our [removed: brand.][added: brands.]

Our competitors are European and American luxury brands, as well as private label retailers, including some of [removed: Coach’s] [added: the Company's] wholesale customers.

The success of our business depends on our ability to retain the value of the Coach brand and [added: the Stuart Weitzman brand and] to respond to changing fashion and retail trends in a timely manner.

Any misstep in product quality or design, customer service, marketing, unfavorable publicity or excessive product discounting could negatively affect the image of our [removed: brand] [added: brands] with our customers.

Furthermore, the product lines we have historically marketed and those that we plan to market in the future are becoming increasingly subject to rapidly changing fashion trends and consumer [removed: preferences.][added: preferences, including the increasing shift to digital brand engagement and social media communication.]

If we do not anticipate and respond promptly to changing customer preferences and fashion trends in the design, production, and styling of our products, as well as create compelling marketing [removed: and retail environments] [added: campaigns] that appeal to our customers, our sales and results of operations may be negatively impacted.

Even if our [removed: products] [added: products, marketing campaigns and retail environments] do meet changing customer preferences and/or stay ahead of changing fashion trends, our brand image could become tarnished or undesirable in the minds of our customers or target markets, which could materially adversely impact our business, financial condition, and results of operations.

We operate on a global basis, with approximately [removed: 34%] [added: 39%] of our net sales coming from operations outside of North America.

| • | changes in exchange rates for foreign currencies, which may adversely affect the retail prices of our products, result in decreased international consumer demand, or increase our supply costs in those markets, with a corresponding negative impact on our gross margin [removed: rates,] [added: rates;] |

| • | compliance with laws relating to foreign operations, including the Foreign Corrupt Practices Act and the U.K. Bribery Act, which in general concern the bribery of foreign public [removed: officials,] [added: officials;] |

| • | political or economic instability or changing macroeconomic conditions in our major [removed: markets,] [added: markets;] |

| • | the repatriation of foreign [removed: cash,] [added: cash.] |

| • | natural and other [removed: disasters, and] [added: disasters;] |

| • | changes in legal and regulatory requirements, including, but not limited to safeguard measures, anti-dumping duties, cargo restrictions to prevent terrorism, restrictions on the transfer of currency, climate change legislation, product safety regulations or other charges or restrictions, resulting in the imposition of new or more onerous trade restrictions, tariffs, embargoes, exchange or other government [removed: controls.] [added: controls; and] |

In order to minimize the impact on earnings of foreign currency rate movements, we hedge our subsidiaries’ U.S. dollar-denominated inventory purchases in Japan and Canada, as well as [removed: Coach’s] [added: the Company's] cross currency denominated intercompany loan portfolio.

Sales to our international wholesale customers are [added: primarily] denominated in U.S. dollars.

Our stock price may periodically fluctuate based on the accuracy of our earnings guidance or other forward-looking statements regarding our financial [removed: performance.][added: performance, including our ability to return value to investors.]

At the same time, however, we recognize [removed: that, from time to time,] [added: that] it [removed: may be] [added: is] helpful to provide investors with guidance as to our forecast of net sales, earnings per share and other financial metrics or projections.

While we generally expect to provide updates to our financial guidance when we report our results each fiscal quarter, we [removed: assume no] [added: do not have any] responsibility to update any of our forward-looking statements at such times or otherwise.

If, [removed: and] [added: or] when, we announce actual results that differ from those that have been predicted by us, outside investment analysts, or others, our stock [removed: price could be adversely affected.]

[removed: Consumer awareness] [added: Awareness] and sensitivity to privacy breaches and cyber security threats [added: by consumers, employees and lawmakers] is at an all-time high.

We may also incur significant costs implementing additional security measures to [added: protect against new or enhanced data security or privacy threats, or to] comply with state, federal and international laws governing the unauthorized disclosure of confidential information as well as increased cyber security protection costs such as organizational changes, deploying additional personnel and protection technologies, training employees, and engaging third party experts and consultants and lost revenues resulting from unauthorized use of proprietary information including our [removed: intellectual property.]

Lastly, we could face [added: sizable fines, significant breach-notification costs and] increased litigation as a result of cyber security breaches.

Given the robust nature of our e-commerce presence and digital strategy, it is imperative that we and our e-commerce partners maintain uninterrupted operation of our: (i) computer hardware, (ii) software systems, [removed: (ii)] [added: (iii)] customer marketing databases, and (iv) ability to email our [added: current and potential customers.]

| • | unavailability of, or significant fluctuations, in the cost of raw [removed: materials,] [added: materials;] |

| • | compliance [added: by us and our independent manufacturers and suppliers] with labor laws and other foreign governmental [removed: regulations,] [added: regulations;] |

| • | imposition of additional duties, taxes and other charges on imports or [removed: exports,] [added: exports;] |

| • | increases in the cost of labor, [removed: fuel,] [added: fuel (including volatility in the price of oil),] travel and [removed: transportation,] [added: transportation;] |

| • | compliance with our Global Business Integrity [removed: Program,] [added: Program;] |

Furthermore, actual costs incurred under the Transformation Plan may differ from expectations based on our execution of the key operational and cost elements described above.

Our brands may not be well-established or widely sold in some of these markets, and we may have limited experience operating directly or working with our partners there.

| • | changes in tourist shopping patterns, particularly that of the Chinese consumer; |

Unfavorable economic conditions may also reduce consumers’ willingness and ability to travel to major cities and vacation destinations in which our stores are located.

Our industry is subject to significant pricing pressure caused by many factors, including intense competition and a highly promotional environment, fragmentation in the retail industry, pressure from retailers to reduce the costs of products, and changes in consumer spending patterns.

Acquisitions may not be successful in achieving intended benefits, cost savings and synergies and may disrupt current operations; the acquired Stuart Weitzman business may underperform relative to our expectations; and the Stuart Weitzman acquisition may cause our financial results to differ from our expectations or the expectations of the investment community.

During fiscal 2015, we acquired Stuart Weitzman Holdings, LLC, a leading designer and manufacturer of women's luxury footwear.

We may have difficulty integrating the Stuart Weitzman business into our operations or otherwise successfully managing the expansion of the Stuart Weitzman business.

Additionally, while we continually review potential acquisition opportunities, there can be no assurance that we will be able to identify suitable candidates or consummate these transactions on favorable terms or at all.

The potential difficulties of integrating the operations of an acquired business, such as Stuart Weitzman, and realizing our expectations for an acquisition, including the benefits that may be realized, include, among other things:

| • | failure of the business to perform as planned following the acquisition or achieve anticipated revenue or profitability targets; |

| • | delays, unexpected costs or difficulties in completing the integration of acquired companies or assets; |

| • | higher than expected costs, lower than expected cost savings or synergies and/or a need to allocate resources to manage unexpected operating difficulties; |

| • | difficulties assimilating the operations and personnel of acquired companies into our operations; |

| • | diversion of the attention and resources of management or other disruptions to current operations; |

| • | unanticipated issues in integrating manufacturing, logistics, information, communications and other systems; |

| • | unanticipated changes in applicable laws and regulations; |

| • | unanticipated changes in the combined business due to potential divestitures or other requirements imposed by antitrust regulators; |

| • | retaining key customers, suppliers and employees; |

| • | retaining and obtaining required regulatory approvals, licenses and permits; |

| • | operating risks inherent in the acquired business and our business; |

| • | consumers’ failure to accept product offerings by us or our licensees; |

| • | assumption of liabilities not identified in due diligence; |

| • | the impact on our or an acquired business’ internal controls and compliance with the requirements under the Sarbanes-Oxley Act of 2002; and |

| • | other unanticipated issues, expenses and liabilities. |

Our failure to successfully complete the integration of any acquired business, including Stuart Weitzman, and any adverse consequences associated with future acquisition activities, could have an adverse effect on our business, financial condition and operating results.

Completed acquisitions may result in additional goodwill and/or an increase in other intangible assets on our balance sheet.

We are required at least annually, or as facts and circumstances exist, to test goodwill and other intangible assets with indefinite lives to determine if impairment has occurred.

If the testing performed indicates that impairment has occurred, we are required to record a non-cash impairment charge for the difference between the carrying value of the goodwill or other intangible assets with indefinite lives and the implied fair value of the goodwill or the fair value of other intangible assets with indefinite lives in the period the determination is made.

We determined there was no impairment in fiscal 2015, fiscal 2014 and fiscal 2013; however, we cannot accurately predict the amount and timing of any impairment of assets.

Should the value of goodwill or other intangible assets become impaired, there could be a material adverse effect on our financial condition and results of operations.

The retail industry, in particular, has been the target of many recent cyber-attacks.

intellectual property.

Furthermore, the Stuart Weitzman brand is viewed as a leading design house of women's luxury footwear within North America, with a strong opportunity for growth globally, and is built upon the idea of crafting a beautifully-constructed shoe, merging fashion and function.

Our success also depends in part on our ability to execute on our Transformation Plan.

Our business is exposed to foreign currency exchange rate fluctuations.

Our continued international expansion will increase our exposure to foreign currency fluctuations.

As a result of operating retail stores outside of the U.S., we are also exposed to market risk from fluctuations in foreign currency exchange rates.

A substantial weakening of foreign currencies against the U.S. dollar could impact consumers’ willingness or ability to travel abroad and/or purchase our products while traveling, as well as require us to raise our retail prices or reduce our profit margin in various locations outside of the U.S. In addition, our sales and profitability could be negatively impacted if consumers in those markets were unwilling to purchase our products at increased prices.

price could be adversely affected.

In addition, we have taken control of certain of our retail operations in Europe and the Asia-Pacific region, including the United Kingdom, Spain, Ireland, Portugal, France and Germany during calendar 2013, and Malaysia and South Korea during calendar year 2012.

We do not yet have significant experience directly operating in these countries, and in many of them we face established competitors.

current and potential customers.

For example, in the fourth quarter of FY14, we announced that we will close approximately 70 retail stores in North America.

See Item 1 — “Business — Products” where discussed further.

To date, we have not accessed the capital markets in a meaningful way, and therefore are not currently rated by credit rating agencies.

During fiscal 2014, the Company invested $87.2 million in the Hudson Yards joint venture.

Neither our stockholders

When used herein, the terms [removed: “Coach,”] “Company,” [added: "Coach,"] “we,” “us” and “our” refer to Coach, Inc., including consolidated subsidiaries.

[removed: Coach] [added: Coach, Inc.] is a leading New York design house of modern luxury accessories and lifestyle [removed: collections.][added: brands.]

The International segment includes sales to customers through Coach-operated stores (including the Internet) and concession shop-in-shops in Japan and mainland China, Coach-operated stores and concession shop-in-shops in Hong Kong, Macau, Singapore, Taiwan, Malaysia, South Korea, the United Kingdom, France, Ireland, Spain, Portugal, [removed: Germany and] [added: Germany,] Italy, [added: Belgium and the Netherlands,] as well as sales to wholesale customers and distributors in approximately [removed: 35] [added: 45] countries.

As [removed: Coach’s] [added: the Company's] business model is based on multi-channel global distribution, our success does not depend solely on the performance of a single channel or geographic area.

In order to drive growth within our global business, we are focused on four key initiatives, which directly align with the [removed: Company's] [added: Coach brand] Transformation Plan, described below:

| • | Harness the growing power of the digital world, [added: by] accelerating the development of our digital programs and capabilities in North America and worldwide, reflecting the change in consumer shopping behavior globally. Our intent is to rapidly drive further innovation to engage with customers in this channel. Key elements include www.coach.com, our invitation-only outlet Internet site, our global e-commerce sites, marketing sites and social media. |

[removed: In addition, during] [added: During] the fourth quarter of fiscal 2014, [removed: Coach] [added: Coach, Inc.] announced a multi-year strategic plan with the objective of transforming the [added: Coach] brand and reinvigorating growth, which [added: we believe] will enable the Company to return to ‘best-in-class’ profitability.

We believe our strategy offers significant growth opportunities in handbags and accessories, as well as in the broader set of lifestyle categories that we have operated in for some time but are less developed, including footwear and [removed: outerwear.][added: ready-to-wear.]

[removed: It will also entail] [added: This strategy has required an integrated holistic approach, across product, stores and marketing and promotional activities, and entails] the roll-out of carefully crafted aspirational marketing campaigns to define [removed: our] [added: the Coach] brand [added: and] to deliver a fuller and more consistent brand expression.

Key operational and cost measures [removed: needed in order to fund and execute this plan] [added: of the Transformation Plan] include: (i) the investment [removed: of approximately $500 million] in capital improvements in our stores and wholesale locations [removed: in fiscal 2015 and fiscal 2016;] [added: to drive comparable sales improvement;] (ii) the optimization [added: and streamlining] of our [removed: North American store fleet including] [added: organizational model as well as] the closure of [removed: approximately 70] underperforming [removed: locations] [added: stores] in [removed: fiscal 2015;] [added: North America, and select International stores;] (iii) the realignment of inventory levels [added: and mix] to reflect our elevated product strategy [removed: in fiscal 2014;] [added: and consumer preferences;] (iv) the investment of approximately $50 million in incremental advertising costs to [removed: further] [added: elevate consumer perception of our Coach brand, drives sales growth and] promote our new [removed: strategy starting] [added: strategy, which started] in fiscal 2015; and (v) the significant scale-back of our promotional [removed: cadence,] [added: cadence in an increased global promotional environment,] particularly within our outlet Internet sales [removed: site starting] [added: site, which began] in fiscal 2014.

[removed: The Company believes that long-term] growth can be realized through [removed: its] [added: these] transformational efforts over time.

In addition to the risks surrounding the successful execution of our Transformation Plan initiatives, our outlook reflects a certain level of uncertainty [removed: despite signs of improvement in] [added: surrounding] the global economy.

The global economic environment continues to [removed: negatively] [added: have an] impact [added: on] consumer confidence, which in turn influences the level of spending on discretionary items.

[removed: Consumer] [added: Global consumer] retail traffic [removed: remains] [added: remained] relatively weak and inconsistent, which has led to a more promotional environment [added: in the fragmented retail industry] due to increased competition and a desire to offset traffic declines with increased levels of conversion.

[added: If the global macroeconomic environment remains volatile] or worsens, the constrained level of worldwide consumer spending and modified consumption behavior may continue to have a negative effect on our [removed: trends in fiscal 2015.][added: outlook.]

We will continue to monitor these risks and [added: trends and] evaluate and adjust our operating strategies and cost management opportunities to mitigate the related impact on our results of operations, while remaining focused on the long-term growth of our business and protecting the value of our [removed: brand.][added: brands.]

SUMMARY — FISCAL [removed: 2014][added: 2015]

[removed: In fiscal 2014, we reported] [added: This compares to] net sales of $4.81 billion, net income of $781.3 [removed: million] [added: million,] and net income per diluted share of [removed: $2.79.][added: $2.79 in fiscal 2014.]

In fiscal 2014, the comparability of our operating results [removed: has been] [added: was] affected by $131.5 million of pretax charges ($88.3 million after tax or $0.31 per diluted share) related to our Transformation Plan.

In fiscal [removed: 2013,] [added: 2015,] the comparability of our operating results [removed: was] [added: has been] affected by [removed: $53.2] [added: $145.9] million of pretax charges [removed: ($32.6] [added: ($107.8] million after [removed: tax] [added: tax,] or [removed: $0.11] [added: $0.39] per diluted share) related to [removed: restructuring and transformation-related charges.][added: our Transformation Plan, $24.6 million of pretax charges ($21.0 million after tax, or $0.08 per diluted share) related to acquisition charges associated with the Stuart Weitzman brand.]

Our operating performance for fiscal [removed: 2014] [added: 2015] reflected a decline in [removed: revenue] [added: net sales] of [removed: 5.3%,] [added: 12.8%,] primarily due to [removed: decreased revenues from] our North America business partially offset by [removed: gains in our International businesses.][added: a $43.0 million contribution from the Stuart Weitzman brand.]

Excluding the effects of foreign currency, net sales decreased [removed: 3.1%.][added: 10.6%.]

Our gross profit decreased by [removed: 10.8%] [added: 11.8%] to [removed: $3.30] [added: $2.91] billion during fiscal [removed: 2014] [added: 2015] which included the negative impact of charges under our Transformation Plan of [removed: $82.2] [added: $5.0 million and Stuart Weitzman purchase accounting related items of $4.7] million.

Excluding charges under our Transformation Plan [removed: in fiscal 2014] and [removed: restructuring and transformation-related] [added: acquisition-related] charges in fiscal [removed: 2013,] [added: 2015 and fiscal 2014,] SG&A expenses remained fairly consistent.

Net income decreased in fiscal [removed: 2014] [added: 2015] as compared to fiscal [removed: 2013, primarily] [added: 2014,] due to a decrease in operating income of [removed: $404.4] [added: $502.1] million, partially offset by a [removed: $145.2] [added: $131.8] million decrease in our provision for income taxes.

Net income per diluted share decreased [added: primarily] due to lower net income.

Excluding charges under our Transformation Plan [added: and acquisition-related charges] in fiscal [removed: 2014 and restructuring] [added: 2015] and [removed: transformation-related] charges [added: under our Transformation Plan] in fiscal [removed: 2013,] [added: 2014,] net income [removed: decreased 18.5%] and net income per diluted share decreased [removed: 16.9%.][added: 38.9% and 38.2%, respectively.]

| Provision for income taxes | [removed: 340.9] [added: 341.0] | | | | 7.1 | | | 486.1 | | | | 9.6 | | | [removed: (145.2] [added: (145.1] | | ) | | (29.9 | ) |

| Diluted | [added: $ |] 2.79 | | | | | | [added: $] | 3.61 | | | | | | [added: $] | (0.82 | [removed: |] ) | | (22.7 | [removed: )] [added: )%] |

The reported gross profit, [removed: selling, general and administrative] [added: SG&A] expenses, operating income, income before provision for income taxes, provision for income taxes, net income and earnings per diluted share in fiscal 2014 and 2013 reflect certain items which affect the comparability of our results, as noted in the following [added: reconciliation] tables.

Refer to page [removed: 39] [added: 41] for a discussion on the Non-GAAP Measures.

[removed: (in] [added: | | (dollars in] millions, except per share data) [added: | | | | | | | | | | | | | | |]

| [removed: Selling, general and administrative] [added: SG&A] expenses | [removed: $ |] 2,176.9 | | | [removed: $ |] 49.3 | | | [removed: $] [added: —] | [added: | | — | | |] 2,127.6 | | [added: |]

| Operating income | [removed: $ |] 1,120.1 | | | [removed: $ |] (131.5 | [added: |] ) | [added: —] | [removed: $] | [added: | — | | |] 1,251.6 | | [added: |]

| Income before provision for income taxes | [removed: $ |] 1,122.3 | | | [removed: $ |] (131.5 | [added: |] ) | [added: —] | [removed: $] | [added: | — | | |] 1,253.8 | | [added: |]

| Provision for income taxes | [removed: $ | 340.9 |] [added: 341.0] | | [removed: $] | (43.2 | [added: |] ) | [added: —] | [removed: $] | [removed: 384.1] | [added: —] | [added: | | 384.2 | | |]

| Net income | [removed: $ |] 781.3 | | | [removed: $ |] (88.3 | [added: |] ) | [added: —] | [removed: $] | [added: | — | | |] 869.6 | | [added: |]

| Diluted net income per share | [removed: $ |] 2.79 | | | [removed: $ |] (0.31 | [added: |] ) | [added: —] | [removed: $] | [added: | — | | |] 3.10 | | [added: |]

| | June [added: 28, 2014 | | | | June] 29, [removed: 2013] [added: 2013(1)] | | | | [added: June 28, 2014] | | | [added: June 29, 2013(1)] | | | |

| | GAAP Basis (As Reported) | | | [removed: | Restructuring] [added: Transformation] and [removed: Transformation-Related Charges] [added: Other Actions] | | | [added: Acquisition-Related Costs] | [added: | | Acquisition-Related Purchase Accounting | | |] Non-GAAP Basis (Excluding Items) | | |

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

The Coach brand was established in New York City in 1941, and has a rich heritage of pairing exceptional leathers and materials with innovative design.

Coach, Inc. operates in three segments: North America, International and Other (which includes the Stuart Weitzman brand acquired by the Company in the fourth quarter of fiscal 2015).

Other also consists of sales and expenses generated by the Stuart Weitzman brand during the final two months of fiscal 2015.

The Company's execution of these key operational and cost measures were on plan through the end of fiscal 2015, and we believe that long-term

Furthermore, as discussed in Note 7, "Acquisitions," the Company acquired luxury designer footwear brand Stuart Weitzman, which we believe will complement our current leadership position in premium handbags and accessories, while immediately adding to the Company's earnings as we continue to make meaningful progress towards our brand transformation.

The acquisition was consummated on May 4, 2015, and the brand contributed $43.0 million in net sales in fiscal 2015, included within our Other segment.

Macroeconomic and geopolitical events in Greater China and southeast Asia have contributed to volatility in consumer spending within the region.

Furthermore, it is still too early to understand the impact, if any, of MERS (Middle East Respiratory Syndrome) on consumer spending in Asia, including the impact on tourism in the region.

Within the U.S., a prolonged and tough winter season impacted demand during the first half of calendar 2015, however certain limited and recent factors within the U.S., including an improvement in the labor market and modest growth in overall consumer spending, suggest a potential moderate strengthening in the U.S. economic outlook.

It is still, however, too early to understand what kind of sustained impact this will have on consumer discretionary spending.

As discussed in Part I, Item 1 - "Business" and as part of our Transformation Plan as described in Note 3, "Transformation and Other Actions," in fiscal 2015, we have reduced the number of retail stores and total square footage within North America, as we continue to optimize our real estate position.

We expect this trend to continue in the next fiscal year with the anticipated closure of approximately 15-20 North America retail stores in fiscal 2016, attributable to our Transformation Plan.

We expect to continue to see modest to no growth in North America outlet store square footage as we continue to optimize our real estate position across channels by expanding our most productive stores to accommodate a broader expression of lifestyle assortment while continuing to assess opportunities to close under-performing stores.

Within our International segment, we are expecting to reflect modest growth in our store count over the next few years, particularly within mainland China and Europe.

Lastly, within Stuart Weitzman, we are expecting modest growth in our real estate position over the next year.

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

These fiscal 2015 actions taken together increased the Company's selling, general and administrative ("SG&A") expenses by $160.8 million and cost of sales by $9.7 million, negatively impacting net income by $128.8 million, or $0.47 per diluted share.

These fiscal 2014 actions increased the Company's SG&A expenses by $49.3 million and cost of sales by $82.2 million, negatively impacting net income by $88.3 million, or $0.31 per diluted share.

Excluding our Transformation Plan and acquisition-related charges in fiscal 2015 and fiscal 2014, gross profit decreased by 13.6%, to $2.92 billion.

SG&A expenses increased by 5.2% to $2.29 billion during fiscal 2015.

FISCAL 2015 COMPARED TO FISCAL 2014

| Net sales | $ | 4,191.6 | | | 100.0 | % | | $ | 4,806.2 | | | 100.0 | % | | $ | (614.6 | ) | | (12.8 | )% |

| Gross profit | 2,908.6 | | | | 69.4 | | | 3,297.0 | | | | 68.6 | | | (388.4 | | ) | | (11.8 | ) |

| Selling, general and administrative expenses | 2,290.6 | | | | 54.6 | | | 2,176.9 | | | | 45.3 | | | 113.7 | | | | 5.2 | |

| Operating income | 618.0 | | | | 14.7 | | | 1,120.1 | | | | 23.3 | | | (502.1 | | ) | | (44.8 | ) |

| Interest (expense) income, net | (6.4 | | ) | | (0.2 | ) | | 2.2 | | | | — | | | (8.6 | | ) | | NM | |

| Provision for income taxes | 209.2 | | | | 5.0 | | | 341.0 | | | | 7.1 | | | (131.8 | | ) | | (38.7 | ) |

| Net income | 402.4 | | | | 9.6 | | | 781.3 | | | | 16.3 | | | (378.9 | | ) | | (48.5 | ) |

| Basic | $ | 1.46 | | | | | | $ | 2.81 | | | | | | $ | (1.35 | ) | | (48.1 | )% |

| Diluted | $ | 1.45 | | | | | | $ | 2.79 | | | | | | $ | (1.33 | ) | | (47.9 | )% |

NM - Not meaningful

affect the comparability of our results, as noted in the following reconciliation tables.

| | June 27, 2015 | | | | | | | | | | | | | | |

| Gross profit | $ | 2,908.6 | | $ | (5.0 | ) | $ | — | | $ | (4.7 | ) | $ | 2,918.3 | |

| SG&A expenses | 2,290.6 | | | 140.9 | | | 17.1 | | | 2.8 | | | 2,129.8 | | |

| Operating income | 618.0 | | | (145.9 | | ) | (17.1 | | ) | (7.5 | | ) | 788.5 | | |

| Income before provision for income taxes | 611.6 | | | (145.9 | | ) | (17.1 | | ) | (7.5 | | ) | 782.1 | | |

| Provision for income taxes | 209.2 | | | (38.1 | | ) | (3.6 | | ) | — | | | 250.9 | | |

| Net income | 402.4 | | | (107.8 | | ) | (13.5 | | ) | (7.5 | | ) | 531.2 | | |

Our product offerings include fine accessories, gifts and certain seasonal lifestyle apparel collections for women and men.

Coach operates in two segments: North America and International.

This will require an integrated holistic approach, across product, stores and marketing and promotional activities.

If the global macroeconomic environment remains volatile

This compares to net sales of $5.08 billion, net income of $1.03 billion, and net income per diluted share of $3.61 in fiscal 2013.

In fiscal 2013, restructuring and transformation-related charges negatively impacted gross profit by $4.8 million.

Selling, general and administrative ("SG&A") expenses remained fairly consistent from fiscal 2013, however SG&A expense as a percentage of net sales increased by 250 basis points primarily due to higher selling expenses to support our International businesses as well as a decline in total Net sales.

| | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Gross profit | $ | 3,698.1 | | | $ | (4.8 | ) | | $ | 3,702.9 | |

Transformation and Other Related Actions

Additional actions will continue into fiscal 2015.

Restructuring and Transformation-Related Charges

The charges include the strategic reassessment of the Reed Krakoff business, streamlining our organizational model and reassessing the fleet of our retail stores and inventories.

| (1) | In connection with the acquisition of the retail business in Europe, the Company evaluated the composition of its reportable segments and concluded that the operating income associated with this region should be included in the International segment. Accordingly, prior year comparable amounts have been reclassified to conform to the current year presentation. See Note 7, "Acquisitions" and Note 16, "Segment Information" for more information. |

During fiscal 2013, the Company recognized a favorable tax settlement and the benefit of certain permanent adjustments related to executive compensation.

FISCAL 2013 COMPARED TO FISCAL 2012

| | June 29, 2013 | | | | | | | June 30, 2012 | | | | | | | Variance | | | | | |

| Net sales | $ | 5,075.4 | | | 100.0 | % | | $ | 4,763.2 | | | 100.0 | % | | $ | 312.2 | | | 6.6 | % |

| Gross profit | 3,698.1 | | | | 72.9 | | | 3,466.1 | | | | 72.8 | | | 232.0 | | | | 6.7 | |

| Selling, general and administrative expenses | 2,173.6 | | | | 42.8 | | | 1,954.1 | | | | 41.0 | | | 219.5 | | | | 11.2 | |

| Operating income | 1,524.5 | | | | 30.0 | | | 1,512.0 | | | | 31.7 | | | 12.5 | | | | 0.8 | |

| Provision for income taxes | 486.1 | | | | 9.6 | | | 466.8 | | | | 9.8 | | | 19.3 | | | | 4.1 | |

| Net income | 1,034.4 | | | | 20.4 | | | 1,038.9 | | | | 21.8 | | | (4.5 | | ) | | (0.4 | ) |

| Basic | $ | 3.66 | | | | | | $ | 3.60 | | | | | | $ | 0.06 | | | 1.6 | % |

| Diluted | 3.61 | | | | | | | 3.53 | | | | | | | 0.08 | | | | 2.3 | |

| | June 30, 2012 | | | | | | | | | | | | | | |

| | GAAP Basis (As Reported) | | | | Tax Adjustment | | | | Charitable Contribution | | | | Non-GAAP Basis (Excluding Items) | | |

| Selling, general and administrative expenses | $ | 1,954.1 | | | $ | — | | | $ | 39.2 | | | $ | 1,914.9 | |

| Operating income | $ | 1,512.0 | | | $ | — | | | $ | (39.2 | ) | | $ | 1,551.2 | |

| Provision for income taxes | $ | 466.8 | | | $ | (23.9 | ) | | $ | (15.3 | ) | | $ | 506.0 | |

| Net income | $ | 1,038.9 | | | $ | 23.9 | | | $ | (23.9 | ) | | $ | 1,038.9 | |

During fiscal 2013, the Company incurred restructuring and transformation-related charges of $53.2 million.

Charitable Contributions and Tax Adjustments

During fiscal 2012, the Company decreased the provision for income taxes by $23.9 million, primarily as a result of recording the effect of a revaluation of certain deferred tax asset balances due to a change in Japan’s corporate tax laws and the favorable settlement of a multi-year transfer pricing agreement with Japan.

The Company used the net income favorability to contribute an aggregate $39.2 million to the Coach Foundation.

Net sales increased 6.6% or $312.2 million to $5.08 billion.

The increase was driven by gains in both the North American and International businesses.

| | June 29, 2013(1) | | | | June 30, 2012(1) | | | | June 29, 2013(1) | | | June 30, 2012(1) | | | |

| North America | $ | 3,478.2 | | | $ | 3,316.9 | | | 4.9% | | 68.5 | % | | 69.7 | % |

The use of derivative financial instruments is in accordance with [removed: Coach’s] [added: the Company's] risk management policies, and we do not enter into derivative transactions for speculative or trading purposes.

[removed: Substantially all] [added: The majority] of [removed: Coach’s] [added: the Company's] purchases and sales involving international parties, excluding international consumer sales, are denominated in U.S. dollars and, therefore, [removed: are not subject to] [added: our] foreign currency exchange [removed: risk.][added: risk is limited.]

The Company is exposed to risk from foreign currency exchange rate fluctuations resulting from its [removed: foreign] operating subsidiaries’ U.S. dollar [added: and Euro] denominated inventory purchases.

To mitigate such risk, Coach Japan and Coach Canada enter into foreign currency derivative contracts, primarily zero-cost collar [removed: options.][added: options and forward foreign currency contracts.]

As of June [removed: 28, 2014] [added: 27, 2015] and June [removed: 29, 2013,] [added: 28, 2014,] zero-cost collar options [added: and forward foreign currency exchange contracts] designated as cash flow hedges with a notional amount of [removed: $90.3] [added: $126.7] million and [removed: $193.4] [added: $90.2] million, respectively, were outstanding.

As a result of the above considerations, we do not believe that we are exposed to any undue concentration of counterparty credit risk associated with our derivative contracts as of June [removed: 28, 2014.][added: 27, 2015.]

[removed: Coach] [added: The Company] is also exposed to market risk from foreign currency exchange rate fluctuations with respect to various cross-currency intercompany [removed: and related party] loans which are not long term in investment nature.

This primarily includes exposure to exchange rate fluctuations in the [removed: Hong Kong] [added: Singapore] Dollar, the [removed: South Korean Won,] [added: Euro,] the [added: British Pound Sterling, the] New Taiwan [removed: Dollar,] [added: Dollar] and the [removed: British Pound Sterling.][added: Malaysian Ringgit.]

To manage the exchange rate risk related to these loans, the Company [removed: entered] [added: primarily enters] into forward exchange and cross-currency swap [removed: contracts, the terms of which include the exchange of foreign currency fixed interest for U.S. dollar fixed interest and an exchange of the foreign currency and U.S. dollar based notional values at the maturity dates of the contracts, the latest of which is November 2014.][added: contracts.]

As of June [removed: 28, 2014] [added: 27, 2015] and June [removed: 29, 2013,] [added: 28, 2014,] the total notional values of outstanding forward [added: foreign currency] exchange and cross-currency swap contracts related to these loans were [removed: $13.2] [added: $25.8] million and [removed: $147.6] [added: $13.2] million, respectively.

The fair value of outstanding foreign currency derivatives included in current assets at June [removed: 28, 2014] [added: 27, 2015] and June [removed: 29, 2013] [added: 28, 2014] was [removed: $0.5] [added: $3.4] million and [removed: $4.5] [added: $0.5] million, respectively.

The fair value of outstanding foreign currency derivatives included in current liabilities at June [removed: 28, 2014] [added: 27, 2015] and June [removed: 29, 2013] [added: 28, 2014] was [removed: $0.9] [added: $0.2] million and [removed: $2.9] [added: $0.9] million, respectively.

As of June [removed: 28, 2014,] [added: 27, 2015,] a 10% devaluation of the U.S. Dollar against the exchange rates for foreign currencies under contract would result in an immaterial impact on derivative contract fair values.

[removed: The primary objective] of our investment activities is the preservation of principal while maximizing interest income and minimizing risk.

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.

The Company is exposed to interest rate risk in relation to its Amended and Restated Credit Agreement, including the Term Loan, the 4.250% Senior Notes and investments.

Our exposure to changes in interest rates is primarily attributable to debt outstanding under our Amended and Restated Credit Agreement, including the Term Loan.

Borrowings under the Amended and Restated Credit Agreement bear interest at a rate per annum equal to, at Coach’s option, either (a) a rate based on the rates applicable for deposits in the interbank market for U.S. dollars or the applicable currency in which the loans are made plus an applicable margin or (b) an alternate base rate (which is a rate equal to the greatest of (i) the Prime Rate in effect on such day, (ii) the Federal Funds Effective Rate in effect on such day plus ½ of 1% or (iii) the Adjusted LIBO Rate for a one month Interest Period on such day plus 1%).

A hypothetical 10% change in the Amended and Restated Credit Agreement interest rate would have resulted in an insignificant change in interest expense in fiscal 2015.

Furthermore, we are also exposed to changes in interest rates related to the fair value of our $600.0 million 4.250% Senior Notes.

At June 27, 2015, the fair value of the 4.250% Senior Notes was approximately $579.0 million.

The primary objective

Coach is exposed to interest rate risk in relation to its investments and revolving credit facilities.

Founded in 1941, Coach [added: Inc.] was acquired by Sara Lee Corporation (“Sara Lee”) in 1985.

| • | In fiscal 2011, the Company purchased a non-controlling interest in a joint venture with Hackett Limited to expand the Coach business in Europe. Through the joint venture, the Company opened retail locations in Spain, Portugal and the United Kingdom in fiscal 2011, in France and Ireland in fiscal 2012 and in Germany in fiscal 2013. In the beginning of fiscal 2014, the Company purchased Hackett Limited’s [added: remaining] 50% interest in the joint [removed: venture.] [added: venture, and has continued to expand its presence in Europe.] |

| n | Fiscal 2009: Hong Kong, Macau and mainland China [removed: (“Coach] [added: (“Greater] China”). |

See Note 16, "Segment Information" for more [removed: information.][added: information about all segments.]

NARRATIVE DESCRIPTION OF [removed: BUSINESS][added: COACH BRAND]

[removed: Coach has grown from a family-run workshop in a Manhattan loft to] [added: Coach, Inc. (the "Company") is] a leading New York design house of modern luxury accessories and lifestyle [removed: collections.][added: brands.]

[removed: Coach’s] [added: Our] product offering uses a broad range of high quality leathers, fabrics and materials.

Coach [removed: created] [added: presents] a sophisticated, modern and inviting environment to showcase our product assortment and reinforce a consistent brand positioning wherever the consumer may shop.

[removed: Coach offers] [added: We offer] a number of key differentiating elements that set [removed: it] [added: us] apart from the competition, including:

A Market Leadership Position With Growing International Recognition — [added: The] Coach [added: brand] is a global leader in premium handbags and lifestyle accessories.

Our long-standing reputation and distinctive image have been consistently developed across an expanding number of products, sales channels and international markets, including within North [removed: America, in which Coach is the leading brand, and in Japan, where Coach is the leading imported luxury handbag] [added: America] and [removed: accessories brand by units sold.][added: Japan.]

Coach [removed: is] also [removed: gaining] [added: continues to gain] traction in [added: mainland] China and other Asian markets, Europe and Latin America.

A Loyal And Involved Consumer — [removed: Coach consumers] [added: Consumers] have a strong emotional connection with the [added: Coach] brand.

Part of [removed: the Company’s] [added: our] everyday mission is to cultivate consumer relationships by strengthening this [removed: emotional connection.][added: sentiment and brand loyalty.]

A Multi-Channel Global Distribution Model — [removed: Coach products] [added: Products] are available in image-enhancing [removed: locations] [added: environments] globally wherever our consumer chooses to shop including: retail and outlet stores, directly operated concession shop-in-shops, online, and department and specialty stores.

This allows [removed: Coach] [added: us] to maintain a dynamic balance as results do not depend solely on the performance of a single channel or geographic area.

Our stores showcase the world of [removed: Coach] [added: our products] and enhance the shopping experience while reinforcing the image of [removed: the Coach] [added: our] brand.

[removed: Store] [added: Furthermore, store] associates are trained to maintain high standards of visual presentation, merchandising and customer service.

To truly understand globalization and its [removed: impact on Coach,] [added: related impact,] we also need to understand the local context in each market, learning about our consumer wherever [removed: Coach is] [added: our products are] sold.

[added: The] Coach [added: brand also] works to anticipate the consumer’s changing needs by keeping the product assortment fresh and compelling.

[removed: Coach's] [added: Coach brand’s primary] product [removed: offerings] [added: offerings, manufactured by third-party suppliers,] include [removed: modern luxury accessories and lifestyle collections, including women's and men's bags,] women’s and men’s [added: bags,] small leather goods, [added: footwear,] business cases, [removed: footwear, wearables] [added: ready-to-wear] including outerwear, watches, weekend and travel accessories, scarves, sunwear, fragrance, jewelry, travel bags and other lifestyle products.

The following table shows net sales for each product category [removed: represented:][added: represented for the Coach brand (in millions):]

| | [removed: June 28, 2014] | [added: June 27, 2015] | | | [added: June 28, 2014] | | | June 29, 2013 | | [removed: | | | | | June 30, 2012 | | | | | |]

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

Footwear — Jimlar Corporation [removed: (“Jimlar”)] [added: ("Jimlar")] has been [removed: Coach's] [added: Coach brand's] footwear licensee since 1999.

This collection is a collaborative effort that combines the Coach aesthetic for fashion accessories with the latest fashion [removed: directions] [added: directions, primarily] in sunglasses.

[removed: Coach] [added: Our] sunglasses are sold in [removed: Coach] retail stores and [added: on] our Internet sales sites, department stores worldwide, select sunglass retailers and optical retailers in major global markets.

The Coach watch collection is currently sold in Coach retail stores and [added: on] our Internet sales sites, department stores worldwide, and select watch retailers in major global markets.

[removed: Coach's New York-based] [added: Coach brand's] design [removed: team] [added: team, led by the Executive Creative Director, Stuart Vevers,] is responsible for conceptualizing and directing the design of all [removed: Coach] products.

Designers have access to Coach's extensive archives of product designs created since [removed: the Company's] [added: Coach's] inception, which are a valuable resource for new product concepts.

[removed: Coach] [added: Our] designers are also supported by a strong merchandising team that analyzes sales, market trends and consumer preferences to identify market opportunities that help guide each season's design [removed: process.][added: process and create a globally relevant product assortment.]

Merchandisers also [removed: analyze, edit, add and discontinue products] [added: manage the product life cycle] to maximize sales [added: and profitability] across all channels.

The product category teams, each comprised of design, merchandising/product development and sourcing specialists help [added: the] Coach [added: brand] execute design concepts that are consistent with the brand's strategic direction.

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

| • | North America, which includes sales to North American consumers through [removed: Coach-operated] [added: Coach-branded] stores (including the Internet) and sales to wholesale customers. This segment represented approximately [removed: 65%] [added: 59%] of Coach's total net sales in fiscal [removed: 2014.] [added: 2015.] |

| • | International, which includes sales to consumers through [removed: Coach-operated] [added: Coach-branded] stores (including the Internet) and concession shop-in-shops in Japan and mainland China, Coach-operated stores and concession shop-in-shops in Hong Kong, Macau, Singapore, Taiwan, Malaysia, South Korea, the United Kingdom, France, Ireland, Spain, Portugal, [removed: Germany and] [added: Germany,] Italy, [added: Belgium and the Netherlands] as well as sales to wholesale customers and distributors in approximately [removed: 35] [added: 45] countries. This segment represented approximately [removed: 34%] [added: 39%] of total net sales in fiscal [removed: 2014.] [added: 2015.] |

[added: | • |] Other, which [removed: is not a reportable segment,] consists of sales and expenses generated [added: by the Coach brand] in [added: other] ancillary channels, including licensing and disposition. [added: Other also consists of sales and expenses generated by the Stuart Weitzman brand during the final two months of fiscal 2015. This segment represented approximately 2% of total net sales in fiscal 2015. |]

North American Retail Stores — Coach [added: retail] stores are located in regional shopping centers and metropolitan areas throughout the U.S. and Canada.

Our flagship stores, which offer the broadest assortment of Coach products, are located in high-visibility [removed: locations within New York City, Chicago, Beverly Hills, San Francisco, Toronto and Vancouver.][added: locations.]

In fiscal [removed: 2014,] [added: 2015,] we have reduced the number of [removed: both] retail stores and total square footage, as we continue to optimize our real estate position.

The Coach brand is one of the most recognized fine accessories brands in both North America and in targeted international markets, and has a rich heritage of pairing exceptional leathers and materials with innovative design.

We continue to be committed to the elevation and enhancement of our in-store imagery through strategic investments in Coach branded stores and wholesale locations.

NARRATIVE DESCRIPTION OF STUART WEITZMAN BRAND

Stuart Weitzman Intermediate LLC ("Stuart Weitzman") is a global leader in designer footwear, and is built upon the concept of crafting a beautifully-constructed shoe, merging fashion and function.

Stuart Weitzman is a leading women's premium footwear brand in North America, with a strong opportunity for growth both within North America and international markets.

The design team, under Mr. Stuart Weitzman, is responsible for conceptualizing and directing the design of all products, and works closely with its manufacturing partners, primarily in Spain, to construct a broad mix of footwear styles.

These manufacturers in aggregate support a broad mix of materials and seasonal influx of new, fashion oriented styles, which allows the Stuart Weitzman brand to quickly meet marketplace demands and changing consumer preferences.

Stuart Weitzman products, which substantially consist of footwear, are sold primarily through wholesale concepts (including shop-in-shops) as well as through retail concepts (including directly operated stores and e-commerce sites).

As of June 27, 2015, Stuart Weitzman employed approximately 500 people globally, including both full and part time employees, but excluding seasonal and temporary employees.

Of these employees, approximately 300 were retail employees in the global retail field.

The Company

owns all of the material worldwide trademark rights (including the Stuart Weitzman trademark) used in connection with the production, marketing and distribution of Stuart Weitzman products.

In addition, the Company owns registrations for design patents and applications for utility patents for Stuart Weitzman products.

On May 4, 2015, the Company completed the acquisition of luxury footwear company Stuart Weitzman to complement its current leadership position in premium handbags and accessories.

The operating results of the Stuart Weitzman brand have been consolidated in the Company's operating results commencing on May 4, 2015.

In fiscal 2015, the Company has three reportable segments:

| | |

| --- | --- |

Over the next year, we expect to continue investing in the elevation of shop-in-shop environments.

| | | June 27, 2015 | | | June 28, 2014 | | | June 29, 2013 | |

| Locations: | | 503 | | | 475 | | | 409 | |

| Square footage: | | 1,030,695 | | | 918,995 | | | 768,567 | |

| Average square footage | | 2,049 | | | 1,935 | | | 1,879 | |

We expect our International segment to reflect modest growth in store count over the next few years, particularly within mainland China and Europe.

Stuart Weitzman — The Stuart Weitzman brand is sold primarily through department stores in North America and international distributors, including approximately 600 wholesale locations, and within numerous independent third party distributors.

Its most significant wholesale customers include Nordstrom, Saks, and Neiman Marcus.

Furthermore, Stuart Weitzman products are also sold in freestanding flagship and retail stores, and e-commerce websites.

As of June 27, 2015, Stuart Weitzman had 54 directly operated stores with a total square footage of 91,101 and an average square footage of 1,687.

| Fragrance | | Interparfums(2) | | 2015 | | 2026 |

| | |

| --- | --- |

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

| | |

| --- | --- |

| (2) | The Estee Lauder licensing relationship expired on June 30, 2015. Coach entered into a new licensing agreement with Interparfums in April 2015, expiring in June 2026. |

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

| | June 27, 2015 | | | | | | | June 28, 2014 | | | | | | | June 29, 2013 | | | | | |

| Women's Handbags | $ | 2,389.6 | | | 58 | % | | $ | 2,826.1 | | | 59 | % | | $ | 3,177.2 | | | 62 | % |

| Women's Accessories | 709.4 | | | | 17 | | | 860.3 | | | | 18 | | | 954.2 | | | | 19 | |

| Men's | 680.4 | | | | 16 | | | 691.8 | | | | 14 | | | 599.5 | | | | 12 | |

FINANCIAL INFORMATION ABOUT SEGMENTS

Coach is one of the most recognized fine accessories brands in the U.S. and in targeted international markets.

Coach has committed a future investment of approximately $500 million to further elevate its in-store imagery.

| | (dollars in millions) | | | | | | | | | | | | | | | | | | | |

| Women's Handbags | $ | 2,642 | | | 55 | % | | $ | 2,923 | | | 58 | % | | $ | 2,886 | | | 61 | % |

| Women's Accessories | 1,046 | | | | 22 | | | 1,196 | | | | 23 | | | 1,170 | | | | 24 | |

| Men's | 692 | | | | 14 | | | 600 | | | | 12 | | | 424 | | | | 9 | |

| All Other Products | 426 | | | | 9 | | | 356 | | | | 7 | | | 283 | | | | 6 | |

| Total Sales | $ | 4,806 | | | 100 | % | | $ | 5,075 | | | 100 | % | | $ | 4,763 | | | 100 | % |

Travel Bags — The travel collections are comprised of luggage and related accessories, such as travel kits and valet trays.

Fragrance — Starting in the spring of 2010, Estée Lauder Companies Inc. (“Estée Lauder”), through its subsidiary, Aramis Inc., became Coach's fragrance licensee.

In the first quarter of fiscal 2014, Stuart Vevers joined the Company as Executive Creative Director, replacing Reed Krakoff, who departed from the Company in connection with the sale of the Reed Krakoff business.

In fiscal 2014, the Company’s operations reflect five operating segments aggregated into two reportable segments:

| | | | | | | | | | |

Over the next few years, we expect to make significant investment in the elevation of shop-in-shop environments in this channel.

| Coach Japan: | | | | | | | | | |

| Locations: | | 198 | | | 191 | | | 180 | |

| Square footage: | | 355,014 | | | 350,994 | | | 320,781 | |

| Net increase vs. prior year | | 4,020 | | | 30,213 | | | 16,856 | |

| Average square footage | | 1,793 | | | 1,838 | | | 1,782 | |

| Locations: | | 277 | | | 218 | | | 188 | |

| % increase vs. prior year | | 27.1 | % | | 16.0 | % | | 32.4 | % |

| Square footage: | | 563,981 | | | 417,573 | | | 344,615 | |

| Net increase vs. prior year | | 146,408 | | | 72,958 | | | 103,742 | |

| % increase vs. prior year | | 35.1 | % | | 21.2 | % | | 43.1 | % |

| Average square footage | | 2,036 | | | 1,915 | | | 1,833 | |

Coach Japan plans to maintain a relatively consistent store count over the next several years.

Furthermore, the balance of Coach International, excluding Japan, anticipates modest growth in our store count over the next few years.

| | | | | | | |

Over the last several years, we have increased the presence of our senior management in the countries of our manufacturers to enhance control over decision making and ensure the speed with which we bring new product to market is maximized.

projects.

Approximately 60 of Coach’s employees are covered by a collective bargaining agreement.

compliance with the NYSE’s Corporate Governance Listing Standards (“Listing Standards”) pursuant to Section 303A.12(a) of the Listing Standards, which indicated that the CEO was not aware of any violations of the Listing Standards by the Company.

Although Coach’s litigation with present or former employees is routine and incidental to the conduct of Coach’s business, as well as for any business employing significant numbers of employees, such litigation can result in large monetary awards when a civil jury is allowed to determine compensatory and/or punitive damages for actions claiming discrimination on the basis of age, [removed: gender, race, religion, disability or other legally protected characteristic or for termination of employment that is wrongful or in violation of implied contracts.]

gender, race, religion, disability or other legally protected characteristic or for termination of employment that is wrongful or in violation of implied contracts.

For the Fiscal Year Ended June [removed: 28, 2014][added: 27, 2015]

The aggregate market value of Coach, Inc. common stock held by non-affiliates as of December [removed: 27, 2013] [added: 26, 2014] (the last business day of the most recently completed second fiscal quarter) was approximately [removed: $15.5] [added: $10.2] billion.

On [removed: August 1, 2014,] [added: July 31, 2015,] the Registrant had [removed: 274,631,764] [added: 276,627,052] shares of common stock outstanding.

| Proxy Statement for the [removed: 2014] [added: 2015] Annual Meeting of Stockholders | | Part III, Items 10 – 14 |

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

In this Form 10-K, references to [removed: “Coach,”] “we,” “our,” “us” [added: "Coach"] and the “Company” refer to Coach, Inc., including consolidated subsidiaries.

The fiscal years ended June [added: 27, 2015 ("fiscal 2015"), June] 28, 2014 (“fiscal 2014”), [added: and] June 29, 2013 (“fiscal [removed: 2013”) and June 30, 2012 (“fiscal 2012”)] [added: 2013")] were each 52-week periods.

10-K 1 coh6272015-10k.htm 10-K

| [Signatures](#s6B090BC4EEE75476A2D90D68FAE7A5FB) | | [52](#s6B090BC4EEE75476A2D90D68FAE7A5FB) |

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

10-K 1 coh6282014-10k.htm 10-K

| [Signatures](#s8187075BF66200352783AA42251F5D4F) | | [51](#s8187075BF66200352783AA42251F5D4F) |

The fiscal year ending June 27, 2015 (“fiscal 2015”) will be also be a 52-week period.

The following table sets forth the location, use and size of [removed: Coach's] [added: the Company's] key distribution, corporate and product development facilities as of June [removed: 28, 2014.][added: 27, 2015.]

| New York, New York | | Corporate, design, sourcing and product development | | [removed: 465,000(1)] [added: 429,000(1)] | |

| Carlstadt, New Jersey | | Corporate [removed: and product development] [added: offices] | | 65,000 | |

| Tokyo, Japan | | Coach Japan regional management | | [removed: 32,000] [added: 32,300] | |

| Hong Kong | | Coach Hong Kong regional management | | [removed: 31,000] [added: 18,100] | |

| Dongguan, China | | Corporate sourcing, quality control and product development | | [removed: 27,000] [added: 16,700] | |

| Shanghai, China | | [removed: Coach] [added: Greater] China regional management | | [removed: 15,800] [added: 23,000] | |

| London | | Coach Europe regional management | | [removed: 4,000] [added: 8,000] | |

| Beijing, China | | [removed: Coach] [added: Greater] China regional management | | 2,800 | |

As of June [removed: 28, 2014, Coach] [added: 27, 2015, the Company] also occupied [removed: 332] [added: 258 Coach] retail and [removed: 207] [added: 204 Coach] outlet leased stores located in North America, [removed: 198 Coach-operated concession shop-in-shops within department stores, retail stores and outlet stores in Japan, and 277] [added: 503] Coach-operated concession shop-in-shops within department stores, [added: Coach] retail [removed: stores] and outlet stores in our [removed: remaining] international locations, [removed: excluding Japan.][added: and 54 Stuart Weitzman stores globally.]

These leases expire at various times through [removed: 2026.][added: 2036.]

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

| New York, New York | | Stuart Weitzman corporate, design, sourcing and product development | | 37,500 | |

| Fort Lauderdale, Florida | | Stuart Weitzman corporate management | | 9,400 | |

| Fiscal [removed: 2013] [added: 2015] Quarter ended: | | | | | | | | | | | | | | | |

As of [removed: August 1, 2014,] [added: July 31, 2015,] there were [removed: 5,031] [added: 3,809] holders of record of Coach’s common stock.

The information under the principal heading “Securities Authorized For Issuance Under Equity Compensation Plans” in the Company’s definitive Proxy Statement for the Annual Meeting of Stockholders to be held on November [removed: 6, 2014,] [added: 4, 2015,] to be filed with the Securities and Exchange Commission (The “Proxy Statement”), is incorporated herein by reference.

The following graph compares the cumulative total stockholder return (assuming reinvestment of dividends) of [removed: Coach’s] [added: the Company's] common stock with the cumulative total return of the S&P 500 Stock Index and the [removed: “peer] [added: “former peer] set” [added: and "revised peer set"] companies listed below over the five-fiscal-year period ending June [removed: 28, 2014,] [added: 27, 2015,] the last trading day of Coach’s most recent fiscal year.

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

[removed: ][added: ]

| | | [removed: June-09 | |] June-10 | | June-11 | | June-12 | | June-13 | | June-14 | [added: | June-15 |]

The graph assumes that $100 was invested on [removed: June 27, 2009] [added: July 3, 2010] at the per share closing price in each of Coach’s common stock, the S&P 500 Stock Index and a peer set index compiled by us tracking the peer group companies listed above, and that all dividends were reinvested.

The Company did not repurchase any shares during the fourth quarter of fiscal [removed: 2014.][added: 2015.]

| September 27, 2014 | $ | 37.70 | | | $ | 33.39 | | | | | | | $ | 0.3375 | |

| December 27, 2014 | 37.60 | | | | 32.72 | | | | | | | | 0.3375 | | |

| March 28, 2015 | 43.87 | | | | 35.65 | | | | | | | | 0.3375 | | |

| June 27, 2015 | 43.45 | | | | 34.00 | | | | $ | 36.12 | | | 0.3375 | | |

The Company's former peer set consisted of:

During fiscal 2015, the Company established a revised peer set consisting of:

| | |

| --- | --- |

| • | L Brands, Inc., |

| | |

| --- | --- |

| • | PVH Corp., |

| | |

| --- | --- |

| • | Ralph Lauren Corporation, |

| | |

| --- | --- |

| • | Tiffany & Co., |

| | |

| --- | --- |

| • | V.F. Corporation, |

| | |

| --- | --- |

| • | Estee Lauder, Inc., |

| | |

| --- | --- |

| • | Kate Spade & Company, |

| | |

| --- | --- |

| • | Abercrombie & Fitch Co., and |

| | |

| --- | --- |

| • | Michael Kors Holdings Limited |

| COH | | $100.00 | | $181.04 | | $168.14 | | $167.80 | | $103.33 | | $113.16 |

| Peer Set | | $100.00 | | $179.00 | | $205.09 | | $303.39 | | $374.33 | | $343.00 |

| Former Peer Set | | $100.00 | | $159.61 | | $171.34 | | $244.34 | | $276.27 | | $290.54 |

| S&P 500 | | $100.00 | | $139.57 | | $144.67 | | $186.60 | | $240.78 | | $258.50 |

The existing plan, publicly announced on October 23, 2012, expired in June 2015 with zero remaining availability as of June 27, 2015.

| September 29, 2012 | $ | 63.24 | | | $ | 48.24 | | | | | | | $ | 0.3000 | |

| December 29, 2012 | 60.33 | | | | 52.20 | | | | | | | | 0.3000 | | |

| March 30, 2013 | 61.94 | | | | 45.87 | | | | | | | | 0.3000 | | |

| June 29, 2013 | 60.12 | | | | 48.76 | | | | $ | 57.09 | | | 0.3375 | | |

| COH | | $100.00 | | $137.40 | | $243.47 | | $225.11 | | $227.13 | | $138.96 |

| Peer Set | | $100.00 | | $147.40 | | $243.56 | | $247.69 | | $348.08 | | $376.76 |

| S&P 500 | | $100.00 | | $130.65 | | $131.90 | | $140.43 | | $185.47 | | $210.92 |

As of June 28, 2014, Coach had $836,701 remaining in the stock repurchase program.

The Company repurchases its common shares under the repurchase program that was approved by the Board as follows:

| | | | | |

| --- | --- | --- | --- | --- |

| Date Share Repurchase Programs were Publicly Announced | | Total Dollar Amount Approved | | Expiration Date of Plan |

| October 23, 2012 | | $1.5 billion | | June 2015 |

The selected historical financial data presented below as of and for each of the fiscal years in the five-year period ended June [removed: 28, 2014] [added: 27, 2015] has been derived from Coach’s audited Consolidated Financial Statements.

| | June [removed: 28, 2014(2)(3)] [added: 27, 2015(2)(4)] | | | | June [removed: 29, 2013(2)(3)] [added: 28, 2014(3)(4)] | | | | June [removed: 30, 2012(2)(3)] [added: 29, 2013(3)(4)] | | | | [removed: July 2, 2011(3)] [added: June 30, 2012(3)(4)] | | | | July [removed: 3, 2010] [added: 2, 2011(4)] | | |

| Per basic share | $ | [removed: 2.81] [added: 1.46] | | | $ | [removed: 3.66] [added: 2.81] | | | $ | [removed: 3.60] [added: 3.66] | | | $ | [removed: 2.99] [added: 3.60] | | | $ | [removed: 2.36] [added: 2.99] | |

| Per diluted share | [removed: 2.79] [added: 1.45] | | | | [removed: 3.61] [added: 2.79] | | | | [removed: 3.53] [added: 3.61] | | | | [removed: 2.92] [added: 3.53] | | | | [removed: 2.33] [added: 2.92] | | |

| Dividends declared per common share | $ | 1.350 | | | $ | [removed: 1.238] [added: 1.350] | | | $ | [removed: 0.975] [added: 1.238] | | | $ | [removed: 0.675] [added: 0.975] | | | $ | [removed: 0.375] [added: 0.675] | |

| Gross margin | [removed: 68.6] [added: 69.4] | | % | | [removed: 72.9] [added: 68.6] | | % | | [removed: 72.8] [added: 72.9] | | % | | [removed: 72.7] [added: 72.8] | | % | | [removed: 73.0] [added: 72.7] | | % |

| [removed: Selling, general and administrative] [added: SG&A] expenses | [removed: 45.3] [added: 54.6] | | % | | [removed: 42.8] [added: 45.3] | | % | | [removed: 41.0] [added: 42.8] | | % | | [removed: 41.3] [added: 41.0] | | % | | [removed: 41.1] [added: 41.3] | | % |

| Operating margin | [removed: 23.3] [added: 14.7] | | % | | [removed: 30.0] [added: 23.3] | | % | | [removed: 31.7] [added: 30.0] | | % | | [removed: 31.4] [added: 31.7] | | % | | [removed: 31.9] [added: 31.4] | | % |

| Net income | [removed: 16.3] [added: 9.6] | | % | | [removed: 20.4] [added: 16.3] | | % | | [removed: 21.8] [added: 20.4] | | % | | [removed: 21.2] [added: 21.8] | | % | | [removed: 20.4] [added: 21.2] | | % |

| | June [added: 27, 2015(2) | | | June] 28, [removed: 2014(2)(3)] [added: 2014(3)] | | | June 29, [removed: 2013(2)(3)] [added: 2013(3)] | | | June 30, [removed: 2012(2)(3)] [added: 2012(3)] | | | July 2, [removed: 2011(3) | | | July 3, 2010] [added: 2011] | |

| Coach Operated Store [removed: Data] [added: Data:] | | | | | | | | | | | | | | |

| North American retail stores | [added: 258 | | |] 332 | | | 351 | | | 354 | | | 345 | | [removed: | 342 | |]

| North American outlet stores | [added: 204 | | |] 207 | | | 193 | | | 169 | | | 143 | | [removed: | 121 | |]

| Total stores open at fiscal year-end | [added: 1,019 | | |] 1,014 | | | 953 | | | 891 | | | 799 | | [removed: | 725 | |]

| North American retail stores | [added: 728,833 | | |] 910,003 | | | 952,422 | | | 959,099 | | | 936,277 | | [removed: | 929,580 | |]

| North American outlet stores | [added: 1,189,018 | | |] 1,132,714 | | | 982,202 | | | 789,699 | | | 649,094 | | [removed: | 548,797 | |]

| Total store square footage at fiscal year-end | [added: 3,039,647 | | |] 2,961,712 | | | 2,703,191 | | | 2,414,194 | | | 2,130,169 | | [removed: | 1,936,340 | |]

| North American retail stores | [added: 2,825 | | |] 2,741 | | | 2,713 | | | 2,709 | | | 2,714 | | [removed: | 2,718 | |]

| North American outlet stores | [added: 5,829 | | |] 5,472 | | | 5,089 | | | 4,673 | | | 4,539 | | [removed: | 4,536 | |]

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

| [removed: (2)] [added: (3)] | The Company acquired its international businesses from its former distributors as follows: fiscal 2014 — the remaining 50% interest in Europe; fiscal 2013 — Malaysia and South Korea; fiscal 2012 — Singapore and Taiwan. |

| [removed: (3)] [added: (4)] | [removed: During] [added: For all] fiscal years [removed: 2014, 2013, 2012 and 2011,] [added: presented below,] the Company recorded certain items which affect the comparability of our results. See item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” for further information on the items related to fiscal [removed: 2014,] [added: 2015,] fiscal [removed: 2013] [added: 2014,] and fiscal [removed: 2012.] [added: 2013. During] Fiscal [added: 2012, the Company decreased its provision for income taxes by $23.9 million, primarily as a result of recording the effect of a revaluation of certain deferred tax asset balances due to a change in Japan's corporate tax laws and the favorable settlement of a multi-year transfer pricing agreement within Japan. The Company used the net income favorability to contribute an aggregate $39.2 million to the Coach Foundation. Fiscal] 2011 was impacted by the result of a favorable settlement of a multi-year tax return examination and charitable contributions. The following table reconciles the Company's reported results on a U.S. GAAP basis to our adjusted results that exclude these items: |

| Excluding items affecting comparability | [removed: 4,800] [added: —] | | | | [removed: (48,402] [added: (39.2] | | ) | | [removed: 53,202] [added: 39.2] | | | | [removed: 32,568] [added: —] | | | | [removed: 0.11] [added: —] | | |

| Excluding items affecting comparability | — | | | | [removed: (39,209] [added: (25.7] | | ) | | [removed: 39,209] [added: 25.7] | | | | — | | | | — | | |

| Excluding items affecting comparability | [removed: —] [added: 9.7] | | | | [removed: (25,678] [added: (160.8] | | ) | | [removed: 25,678] [added: 170.5] | | | | [removed: —] [added: 128.8] | | | | [removed: —] [added: 0.47] | | |

| Net sales | $ | 4,191.6 | | | $ | 4,806.2 | | | $ | 5,075.4 | | | $ | 4,763.2 | | | $ | 4,158.5 | |

| Gross profit | 2,908.6 | | | | 3,297.0 | | | | 3,698.1 | | | | 3,466.1 | | | | 3,023.5 | | |

| Selling, general and administrative ("SG&A") expenses | 2,290.6 | | | | 2,176.9 | | | | 2,173.6 | | | | 1,954.1 | | | | 1,718.6 | | |

| Operating income | 618.0 | | | | 1,120.1 | | | | 1,524.5 | | | | 1,512.0 | | | | 1,304.9 | | |

| Net income | 402.4 | | | | 781.3 | | | | 1,034.4 | | | | 1,038.9 | | | | 880.8 | | |

| Weighted-average basic shares outstanding | 275.7 | | | | 277.8 | | | | 282.5 | | | | 288.3 | | | | 294.9 | | |

| Weighted-average diluted shares outstanding | 277.2 | | | | 280.4 | | | | 286.3 | | | | 294.1 | | | | 301.6 | | |

| Working capital | $ | 1,671.8 | | | $ | 1,042.1 | | | $ | 1,348.4 | | | $ | 1,086.4 | | | $ | 859.4 | |

| Total assets | 4,666.9 | | | | 3,663.1 | | | | 3,531.9 | | | | 3,104.3 | | | | 2,635.1 | | |

| Cash, cash equivalents and investments | 1,931.8 | | | | 1,353.1 | | | | 1,332.2 | | | | 923.2 | | | | 712.8 | | |

| Inventory | 485.1 | | | | 526.2 | | | | 524.7 | | | | 504.5 | | | | 421.8 | | |

| Total debt | 890.4 | | | | 140.5 | | | | 1.0 | | | | 23.4 | | | | 24.2 | | |

| Stockholders' equity | 2,489.9 | | | | 2,420.6 | | | | 2,409.2 | | | | 1,992.9 | | | | 1,612.6 | | |

| Coach International | 503 | | | 475 | | | 409 | | | 368 | | | 311 | |

| Stuart Weitzman stores | 54 | | | — | | | — | | | — | | | — | |

| Coach International | 1,030,695 | | | 918,995 | | | 768,567 | | | 665,396 | | | 544,798 | |

| Stuart Weitzman stores | 91,101 | | | — | | | — | | | — | | | — | |

| Coach International | 2,049 | | | 1,935 | | | 1,879 | | | 1,808 | | | 1,752 | |

| Stuart Weitzman stores | 1,687 | | | — | | | — | | | — | | | — | |

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

| | |

| --- | --- |

| Fiscal 2015 | Gross Profit | | | | SG&A | | | | Operating Income | | | | Amount | | | | Per Diluted Share | | |

| As Reported: (GAAP Basis) | $ | 2,908.6 | | | $ | 2,290.6 | | | $ | 618.0 | | | $ | 402.4 | | | $ | 1.45 | |

| Adjusted: (Non-GAAP Basis) | $ | 2,918.3 | | | $ | 2,129.8 | | | $ | 788.5 | | | $ | 531.2 | | | $ | 1.92 | |

| As Reported: (GAAP Basis) | $ | 3,297.0 | | | $ | 2,176.9 | | | $ | 1,120.1 | | | $ | 781.3 | | | $ | 2.79 | |

| Excluding items affecting comparability | 82.2 | | | | (49.3 | | ) | | 131.5 | | | | 88.3 | | | | 0.31 | | |

| Adjusted: (Non-GAAP Basis) | $ | 3,379.2 | | | $ | 2,127.6 | | | $ | 1,251.6 | | | $ | 869.6 | | | $ | 3.10 | |

| As Reported: (GAAP Basis) | $ | 3,698.1 | | | $ | 2,173.6 | | | $ | 1,524.5 | | | $ | 1,034.4 | | | $ | 3.61 | |

| Excluding items affecting comparability | 4.8 | | | | (48.4 | | ) | | 53.2 | | | | 32.6 | | | | 0.11 | | |

| Adjusted: (Non-GAAP Basis) | $ | 3,702.9 | | | $ | 2,125.2 | | | $ | 1,577.7 | | | $ | 1,067.0 | | | $ | 3.73 | |

| As Reported: (GAAP Basis) | $ | 3,466.1 | | | $ | 1,954.1 | | | $ | 1,512.0 | | | $ | 1,038.9 | | | $ | 3.53 | |

| Adjusted: (Non-GAAP Basis) | $ | 3,466.1 | | | $ | 1,914.9 | | | $ | 1,551.2 | | | $ | 1,038.9 | | | $ | 3.53 | |

| | | | | | | | | | | | | | | | | | | | |

| | | | | | | | | | | | | | Net Income | | | | | | |

| As Reported: (GAAP Basis) | $ | 3,023.5 | | | $ | 1,718.6 | | | $ | 1,304.9 | | | $ | 880.8 | | | $ | 2.92 | |

| Adjusted: (Non-GAAP Basis) | $ | 3,023.5 | | | $ | 1,692.9 | | | $ | 1,330.6 | | | $ | 880.8 | | | $ | 2.92 | |

| Net sales | $ | 4,806,226 | | | $ | 5,075,390 | | | $ | 4,763,180 | | | $ | 4,158,507 | | | $ | 3,607,636 | |

| Gross profit | 3,296,963 | | | | 3,698,148 | | | | 3,466,078 | | | | 3,023,541 | | | | 2,633,691 | | |

| Selling, general and administrative ("SG&A") expenses | 2,176,889 | | | | 2,173,607 | | | | 1,954,089 | | | | 1,718,617 | | | | 1,483,520 | | |

| Operating income | 1,120,074 | | | | 1,524,541 | | | | 1,511,989 | | | | 1,304,924 | | | | 1,150,171 | | |

| Net income | 781,336 | | | | 1,034,420 | | | | 1,038,910 | | | | 880,800 | | | | 734,940 | | |

| Weighted-average basic shares outstanding | 277,790 | | | | 282,494 | | | | 288,284 | | | | 294,877 | | | | 311,413 | | |

| Weighted-average diluted shares outstanding | 280,379 | | | | 286,307 | | | | 294,129 | | | | 301,558 | | | | 315,848 | | |

| Working capital | $ | 1,042,099 | | | $ | 1,348,437 | | | $ | 1,086,368 | | | $ | 859,371 | | | $ | 773,605 | |

| Total assets | 3,663,131 | | | | 3,531,897 | | | | 3,104,321 | | | | 2,635,116 | | | | 2,467,115 | | |

| Cash, cash equivalents and investments | 1,353,144 | | | | 1,332,231 | | | | 923,215 | | | | 712,754 | | | | 702,398 | | |

| Inventory | 526,175 | | | | 524,706 | | | | 504,490 | | | | 421,831 | | | | 363,285 | | |

| Total debt | 140,485 | | | | 985 | | | | 23,360 | | | | 24,155 | | | | 24,901 | | |

| Stockholders' equity | 2,420,653 | | | | 2,409,158 | | | | 1,992,931 | | | | 1,612,569 | | | | 1,505,293 | | |

| Coach Japan locations | 198 | | | 191 | | | 180 | | | 169 | | | 161 | |

| Coach International, excluding Japan | 277 | | | 218 | | | 188 | | | 142 | | | 101 | |

| Coach Japan locations | 355,014 | | | 350,994 | | | 320,781 | | | 303,925 | | | 293,441 | |

| Coach International, excluding Japan | 563,981 | | | 417,573 | | | 344,615 | | | 240,873 | | | 164,522 | |

| Coach Japan locations | 1,793 | | | 1,838 | | | 1,782 | | | 1,798 | | | 1,823 | |

| Coach International, excluding Japan | 2,036 | | | 1,915 | | | 1,833 | | | 1,696 | | | 1,629 | |

| As Reported: (GAAP Basis) | $ | 3,296,963 | | | $ | 2,176,889 | | | $ | 1,120,074 | | | $ | 781,336 | | | $ | 2.79 | |

| Excluding items affecting comparability | 82,192 | | | | (49,315 | | ) | | 131,507 | | | | 88,281 | | | | 0.31 | | |

| Adjusted: (Non-GAAP Basis) | $ | 3,379,155 | | | $ | 2,127,574 | | | $ | 1,251,581 | | | $ | 869,617 | | | $ | 3.10 | |

| As Reported: (GAAP Basis) | $ | 3,698,148 | | | $ | 2,173,607 | | | $ | 1,524,541 | | | $ | 1,034,420 | | | $ | 3.61 | |

| Adjusted: (Non-GAAP Basis) | $ | 3,702,948 | | | $ | 2,125,205 | | | $ | 1,577,743 | | | $ | 1,066,988 | | | $ | 3.73 | |

| As Reported: (GAAP Basis) | $ | 3,466,078 | | | $ | 1,954,089 | | | $ | 1,511,989 | | | $ | 1,038,910 | | | $ | 3.53 | |

| Adjusted: (Non-GAAP Basis) | $ | 3,466,078 | | | $ | 1,914,880 | | | $ | 1,551,198 | | | $ | 1,038,910 | | | $ | 3.53 | |

| As Reported: (GAAP Basis) | $ | 3,023,541 | | | $ | 1,718,617 | | | $ | 1,304,924 | | | $ | 880,800 | | | $ | 2.92 | |

| Adjusted: (Non-GAAP Basis) | $ | 3,023,541 | | | $ | 1,692,939 | | | $ | 1,330,602 | | | $ | 880,800 | | | $ | 2.92 | |

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, the Chief Executive Officer of the Company and the Chief Financial Officer of the Company, have concluded that the Company’s disclosure controls and procedures are effective as of June [removed: 28, 2014.][added: 27, 2015.]

Management evaluated the effectiveness of the Company’s internal control over financial reporting using the criteria set forth by the Committee of Sponsoring Organizations (COSO) of the Treadway Commission in Internal Control — Integrated Framework in [removed: 1992.][added: 2013.]

Management, under the supervision and with the participation of the Company’s Chief Executive Officer and Chief Financial Officer, assessed the effectiveness of the Company’s internal control over financial reporting as of June [removed: 28, 2014] [added: 27, 2015] and concluded that it is effective.

As discussed in Note 7 to the consolidated financial statements, the Company acquired Stuart Weitzman during the fourth quarter of the year ended June 27, 2015.

This acquisition, representing approximately 13% of Coach, Inc. total assets and approximately 1% of Coach, Inc. net sales, has been excluded from management’s fiscal 2015 assessment of internal control over financial reporting.

The information required to be included by Item 10 of Form 10-K will be included in the Proxy Statement for the [removed: 2014] [added: 2015] Annual Meeting of Stockholders and such information is incorporated by reference herein.

The information regarding executive and director compensation set forth in the Proxy Statement for the [removed: 2014] [added: 2015] Annual Meeting of Stockholders is incorporated herein by reference.

The information under the headings “Securities Authorized for Issuance Under Equity Compensation Plans” and “Coach Stock Ownership by Certain Beneficial Owners and Management” in the Company’s Proxy Statement for the [removed: 2014] [added: 2015] Annual Meeting of Stockholders is incorporated herein by reference.

The information required to be included by Item 13 of Form 10-K will be included in the Proxy Statement for the [removed: 2014] [added: 2015] Annual Meeting of Stockholders and such information is incorporated by reference herein.

The information required by this item is incorporated herein by reference to the sections entitled “Fees For Audit and Other Services” and “Audit Committee Pre-Approval Policy” in the Proxy Statement for the [removed: 2014] [added: 2015] Annual Meeting of Stockholders.

| Date: August [removed: 15, 2014] [added: 14, 2015] | By: | /s/ Victor Luis |

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities indicated below on August [removed: 15, 2014.][added: 14, 2015.]

| /s/ Jide Zeitlin | | [added: Chairman and] Director |

| [Reports of Independent Registered Public Accounting [removed: Firm](#s67BEBCFEACA3C57EBDE4AA422575E619)] [added: Firm](#s450A767742DB5DF4BC6ABC91780535A5)] | [removed: [53](#s67BEBCFEACA3C57EBDE4AA422575E619)] [added: [54](#s450A767742DB5DF4BC6ABC91780535A5)] |

| [Consolidated Balance [removed: Sheets](#s28E5C6B058F88EE10E34AA4213B6889F)] [added: Sheets](#s628EB9CD690159DE86A5E6E2688E447E)] | [removed: [55](#s28E5C6B058F88EE10E34AA4213B6889F)] [added: [56](#s628EB9CD690159DE86A5E6E2688E447E)] |

| [Consolidated Statements of [removed: Income](#s31E8BEE4CA4B3C5198D7AA4213DE0B44)] [added: Income](#s900D8FEE3BF15A15B5488E64417ACFDD)] | [removed: [56](#s31E8BEE4CA4B3C5198D7AA4213DE0B44)] [added: [57](#s900D8FEE3BF15A15B5488E64417ACFDD)] |

| [Consolidated Statements of Comprehensive [removed: Income](#s1AE2C14DBBCA077DAAF0AA4213F68484)] [added: Income](#sBE483A51E65D56C9A605D5ED9AC32EE9)] | [removed: [57](#s1AE2C14DBBCA077DAAF0AA4213F68484)] [added: [58](#sBE483A51E65D56C9A605D5ED9AC32EE9)] |

| [Consolidated Statements of Stockholders’ [removed: Equity](#s1E99810AB7CE3E1F86ACAA421404263E)] [added: Equity](#s8196ED14E154529E9C3635D37D9DF44A)] | [removed: [58](#s1E99810AB7CE3E1F86ACAA421404263E)] [added: [59](#s8196ED14E154529E9C3635D37D9DF44A)] |

| [Consolidated Statements of Cash [removed: Flows](#sF07261AF2F2C0CB9BCB4AA42144006E9)] [added: Flows](#s5757922D71FD5703AEDB6DD1D0F7AC98)] | [removed: [59](#sF07261AF2F2C0CB9BCB4AA42144006E9)] [added: [60](#s5757922D71FD5703AEDB6DD1D0F7AC98)] |

[removed: | [Notes] [added: Notes] to Consolidated Financial [removed: Statements](#s7E208BEAD6E46048D0A7AA422723C583) | [60](#s7E208BEAD6E46048D0A7AA422723C583) |][added: Statements]

| [Schedule II — Valuation and Qualifying [removed: Accounts](#sB41ECF1791A5DA481129AA421660A717)] [added: Accounts](#s95C2CB9265C45AD48D5C4121DFC3C223)] | [removed: [85](#sB41ECF1791A5DA481129AA421660A717)] [added: [94](#s95C2CB9265C45AD48D5C4121DFC3C223)] |

| [Quarterly Financial [removed: Data](#scd644a10947e4f3b98c85472cc0db6ed)] [added: Data](#sF07CC67413BA5D63824E566F1C009CA2)] | [removed: [86](#scd644a10947e4f3b98c85472cc0db6ed)] [added: [95](#sF07CC67413BA5D63824E566F1C009CA2)] |

We have audited the accompanying consolidated balance sheets of Coach, Inc. and subsidiaries (the "Company") as of June [removed: 28, 2014] [added: 27, 2015] and June [removed: 29, 2013,] [added: 28, 2014,] and the related consolidated statements of income, comprehensive income, stockholders' equity, and cash flows for each of the three years in the period ended June [removed: 28, 2014.][added: 27, 2015.]

Our audits also included the financial statement schedule listed in the Index to the [removed: financial statements.][added: Consolidated Financial Statements.]

In our opinion, such consolidated financial statements present fairly, in all material respects, the financial position of Coach, Inc. and subsidiaries at June [removed: 28, 2014] [added: 27, 2015] and June [removed: 29, 2013,] [added: 28, 2014,] and the results of their operations and their cash flows for each of the three years in the period ended June [removed: 28, 2014,] [added: 27, 2015,] in conformity with accounting principles generally accepted in the United States of America.

Also, in our opinion, such financial statement schedule, when considered in relation to the basic consolidated financial statements taken as a whole, [removed: present] [added: presents] fairly, in all material respects, the information set forth therein.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the Company's internal control over financial reporting as of June [removed: 28, 2014,] [added: 27, 2015,] based on the criteria established in Internal Control - Integrated Framework [removed: (1992)] [added: (2013)] issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated August [removed: 15, 2014] [added: 14, 2015] expressed an unqualified opinion on the Company's internal control over financial reporting.

We have audited the internal control over financial reporting of Coach, Inc. and subsidiaries (the "Company") as of June [removed: 28, 2014,] [added: 27, 2015,] based on criteria established in Internal Control - Integrated Framework [removed: (1992)] [added: (2013)] issued by the Committee of Sponsoring Organizations of the Treadway Commission.

In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of June [removed: 28, 2014,] [added: 27, 2015,] based on the criteria established in Internal Control - Integrated Framework [removed: (1992)] [added: (2013)] issued by the Committee of Sponsoring Organizations of the Treadway Commission.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated financial statements and financial statement schedule as of and for the year ended June [removed: 28, 2014] [added: 27, 2015] of the Company and our report dated August [removed: 15, 2014] [added: 14, 2015] expressed an unqualified opinion on those financial statements and financial statement schedule.

[removed: (in thousands] [added: | | (millions,] except per share data) [added: | | | | | | | | | | |]

| | June [added: 27, 2015 | | | | June] 28, 2014 | | | | June 29, 2013 | | |

| Short-term [removed: investments] [added: investments:] | [removed: 276,703] | | | | [removed: 72,106] | | | [added: | | | | | | | |]

| Trade accounts receivable, less allowances of [removed: $1,419] [added: $3.1] and [removed: $1,138,] [added: $1.4,] respectively | [removed: 198,577] [added: 219.5] | | | | [removed: 175,477] [added: 198.6] | | |

| Property and equipment, net | [removed: 713,900 | | | | 694,771] [added: 28.3] | | |

| Long-term [removed: investments] [added: investments:] | [removed: 484,518] | | | | [removed: 197,340] | | | [added: | | | | | | | |]

[removed: |] [added: Other] Intangible [removed: assets | 9,788 | | | | 9,788 | | |][added: Assets]

| Deferred income taxes | [removed: 111,556 | | | | 84,845] [added: 7.1] | | |

| Current [removed: debt] [added: Debt:] | [removed: 140,485] | | | | [removed: 500] | | |

| [removed: Long-term debt] [added: Long-Term Debt:] | [removed: —] | | | | [removed: 485] | | |

| Preferred stock: (authorized [removed: 25,000] [added: 25.0 million] shares; $0.01 par value) none issued | — | | | | — | | |

| Common stock: (authorized [removed: 1,000,000] [added: 1,000.0 million] shares; $0.01 par value) issued and outstanding – [removed: 274,361] [added: 276.6 million] and [removed: 281,902,] [added: 274.4 million shares,] respectively | [removed: 2,744] [added: 2.8] | | | | [removed: 2,819] [added: 2.7] | | |

| Accumulated other comprehensive loss | [removed: (8,759] [added: (77.7] | | ) | | [removed: (12,246] [added: (8.7] | | ) |

| Total liabilities and stockholders’ equity | $ | [removed: 3,663,131] [added: 4,666.9] | | | $ | [removed: 3,531,897] [added: 3,663.1] | |

| | June [removed: 28, 2014] [added: 27, 2015] | | | | June [removed: 29, 2013] [added: 28, 2014] | | | | June [removed: 30, 2012] [added: 29, 2013] | | |

| Other expense | — | | | | [removed: (6,384] [added: —] | | [removed: )] | | [removed: (7,046] [added: (6.4] | | ) |

| Net income per [removed: share] [added: share:] | | | | | | | | | | | |

| Basic | $ | [removed: 2.81] [added: 1.46] | | | $ | [removed: 3.66] [added: 2.81] | | | $ | [removed: 3.60] [added: 3.66] | |

| Diluted | $ | [removed: 2.79] [added: 1.45] | | | $ | [removed: 3.61] [added: 2.79] | | | $ | [removed: 3.53] [added: 3.61] | |

| Shares used in computing net income per [removed: share] [added: share:] | | | | | | | | | | | |

| /s/ Andrea Guerra | | Director |

| Andrea Guerra | | |

| [Notes to Consolidated Financial Statements](#s9C4361997E1A50878B704D1CF5A18F41) | [61](#s9C4361997E1A50878B704D1CF5A18F41) |

August 14, 2015

As described in Management’s Report on Internal Control over Financial Reporting, management excluded from its assessment the internal control over financial reporting at Stuart Weitzman Topco LLC and Stuart Weitzman Intermediate LLC (referred to herein as “Stuart Weitzman”), which was acquired on May 4, 2015 and whose financial statements constitute 13% of total assets and 1% of net sales of the consolidated financial statement amounts as of and for the year ended June 27, 2015.

Accordingly, our audit did not include the internal control over financial reporting at Stuart Weitzman.

August 14, 2015

| | (millions) | | | | | | |

| Cash and cash equivalents | $ | 1,291.8 | | | $ | 591.9 | |

| Inventories | 485.1 | | | | 526.2 | | |

| Deferred income taxes | 98.4 | | | | 112.6 | | |

| Prepaid expenses | 73.1 | | | | 45.5 | | |

| Other current assets | 104.6 | | | | 103.7 | | |

| Total current assets | 2,506.5 | | | | 1,855.2 | | |

| Property and equipment, net | 732.6 | | | | 713.9 | | |

| Goodwill | 434.2 | | | | 361.4 | | |

| Intangible assets | 359.9 | | | | 9.8 | | |

| Deferred income taxes | 115.8 | | | | 111.6 | | |

| Other assets | 111.9 | | | | 126.7 | | |

| Total assets | $ | 4,666.9 | | | $ | 3,663.1 | |

| Accounts payable | $ | 222.8 | | | $ | 153.9 | |

| Accrued liabilities | 600.6 | | | | 518.7 | | |

| Current debt | 11.3 | | | | 140.5 | | |

| Total current liabilities | 834.7 | | | | 813.1 | | |

| Long-term debt | 879.1 | | | | — | | |

| Other liabilities | 463.2 | | | | 429.4 | | |

| Total liabilities | 2,177.0 | | | | 1,242.5 | | |

| Additional paid-in-capital | 2,754.4 | | | | 2,646.1 | | |

| Accumulated deficit | (189.6 | | ) | | (219.5 | | ) |

| Total stockholders’ equity | 2,489.9 | | | | 2,420.6 | | |

See accompanying Notes.

| Net sales | $ | 4,191.6 | | | $ | 4,806.2 | | | $ | 5,075.4 | |

| Cost of sales | 1,283.0 | | | | 1,509.2 | | | | 1,377.3 | | |

| Gross profit | 2,908.6 | | | | 3,297.0 | | | | 3,698.1 | | |

| Selling, general and administrative expenses | 2,290.6 | | | | 2,176.9 | | | | 2,173.6 | | |

| Operating income | 618.0 | | | | 1,120.1 | | | | 1,524.5 | | |

| Interest (expense) income, net | (6.4 | | ) | | 2.2 | | | | 2.4 | | |

| Income before provision for income taxes | 611.6 | | | | 1,122.3 | | | | 1,520.5 | | |

| Provision for income taxes | 209.2 | | | | 341.0 | | | | 486.1 | | |

| Net income | $ | 402.4 | | | $ | 781.3 | | | $ | 1,034.4 | |

| | | |

| /s/ Lew Frankfort | | Executive Chairman and Director |

| Lew Frankfort | | |

| /s/ Michael Murphy | | Director |

| Michael Murphy | | |

August 15, 2014

| Cash and cash equivalents | $ | 591,923 | | | $ | 1,062,785 | |

| Inventories | 526,175 | | | | 524,706 | | |

| Deferred income taxes | 112,630 | | | | 111,118 | | |

| Prepaid expenses | 45,473 | | | | 37,956 | | |

| Other current assets | 103,736 | | | | 86,799 | | |

| Total current assets | 1,855,217 | | | | 2,070,947 | | |

| Goodwill | 361,407 | | | | 345,039 | | |

| Other assets | 126,745 | | | | 129,167 | | |

| Total assets | $ | 3,663,131 | | | $ | 3,531,897 | |

| Accounts payable | $ | 153,870 | | | $ | 178,857 | |

| Accrued liabilities | 518,763 | | | | 543,153 | | |

| Total current liabilities | 813,118 | | | | 722,510 | | |

| Other liabilities | 429,360 | | | | 399,744 | | |

| Total liabilities | 1,242,478 | | | | 1,122,739 | | |

| Additional paid-in-capital | 2,646,123 | | | | 2,520,469 | | |

| Accumulated deficit | (219,455 | | ) | | (101,884 | | ) |

| Total stockholders’ equity | 2,420,653 | | | | 2,409,158 | | |

See accompanying Notes to Consolidated Financial Statements.

| Net sales | $ | 4,806,226 | | | $ | 5,075,390 | | | $ | 4,763,180 | |

| Cost of sales | 1,509,263 | | | | 1,377,242 | | | | 1,297,102 | | |

| Gross profit | 3,296,963 | | | | 3,698,148 | | | | 3,466,078 | | |

| Selling, general and administrative expenses | 2,176,889 | | | | 2,173,607 | | | | 1,954,089 | | |

| Operating income | 1,120,074 | | | | 1,524,541 | | | | 1,511,989 | | |

| Interest income | 2,181 | | | | 2,369 | | | | 720 | | |

| Income before provision for income taxes | 1,122,255 | | | | 1,520,526 | | | | 1,505,663 | | |

| Provision for income taxes | 340,919 | | | | 486,106 | | | | 466,753 | | |

| Net income | $ | 781,336 | | | $ | 1,034,420 | | | $ | 1,038,910 | |

| Basic | 277,790 | | | | 282,494 | | | | 288,284 | | |

| Diluted | 280,379 | | | | 286,307 | | | | 294,129 | | |

(in thousands)

| Comprehensive income | $ | 784,823 | | | $ | 971,699 | | | $ | 1,034,474 | |

| Balance at July 3, 2011 | 288,515 | | | $ | 2,886 | | | $ | 2,000,426 | | | $ | (445,654 | ) | | $ | 54,911 | | | $ | 1,612,569 | |

| Balance at June 30, 2012 | 285,118 | | | 2,851 | | | | 2,327,055 | | | | (387,450 | | ) | | 50,475 | | | | 1,992,931 | | |

| Repurchase and retirement of common stock | (7,066 | ) | | (71 | | ) | | — | | | | (399,929 | | ) | | — | | | | (400,000 | | ) |