Lew Frankfort – CEO Mike Devine – CFO Mike Tucci – President North American Retail Andrea Shaw Resnick – SVP IR

Bob Drbul - Barclays Capital Kimberly Greenberger – Citigroup Adrianne Shapira – Goldman Sachs Lorraine Hutchinson – Bank of America/Merrill Lynch Michelle Clark – Morgan Stanley Neely Tamminga – Piper Jaffray Christine Chen - Needham & Company David Schick – Stifel Nicolaus Liz Dunn – Thomas Weisel Randy Konik – Jefferies & Co. Dana Telsey - Telsey Advisory Group

Good day and welcome to the Coach conference call. At this time, for opening remarks and introductions, I would like to turn the call over to Senior Vice President of Investor Relations and Corporate Communications at Coach, Ms. Andrea Shaw Resnick. You may begin.

Good morning and thank you for joining us today. With me to discuss our quarterly results are Lew Frankfort, Coach's Chairman and CEO, and Mike Devine, Coach's CFO. Mike Tucci, President of North American Retail, is also joining us. Before we begin we must point out that this conference call will involve certain forward-looking statements including projections for our business in the current and future quarters or fiscal years. These statements are based upon a number of continuing assumptions. Future results may differ materially from our current expectations based upon risks and uncertainties such as expected economic trends or our ability to anticipate consumer preferences or control costs. Please refer to our latest Annual Report on Form 10-K for a complete list of these risk factors. Also, please note that historical growth trends may not be indicative of future growth. Now let me outline the speakers and topics for this conference call. Lew Frankfort will provide an overall summary of our second fiscal quarter 2010 results and will also discuss our strategies going forward. Mike Tucci will review the holiday season from a US retail perspective and discuss key initiatives for the spring season ahead. Mike Devine will continue with details on financial and operational highlights of the quarter. Following that we will hold a question and answer session that will end shortly before 9:30 a.m. Lew will then conclude with some brief summary comments. I’d now like to introduce Lew Frankfort, Coach's Chairman, and CEO.

Thanks Andrea, and welcome everyone. As noted in our release this morning we were very pleased with our holiday results including strong sales and earnings growth and the return to positive comparable store sales in our North American retail business where trends improved through the quarter. Our performance clearly demonstrates the traction of the product and pricing strategies we put into place and bodes well for future growth. Beyond the top line we were also very pleased with our high levels of profitability and substantial cash generation in the quarter. Its important to note that we achieved these results despite the challenging retail environment. The consumer in North America remains cautious. She is more value conscious than ever. Fortunately our multi channel distribution model is diversified and includes substantial factory store, and international businesses. The strength of our consumer franchise, flexible business model, and strong balance sheet gives us the ability to adapt our strategies to make the right decisions for the long-term. As we continue to emerge from this downturn we are well situated to build upon our leadership position and continue to gain market share as a growth company. While I will get into further detail about current conditions and the outlook for the category and our business shortly, I did want to take the time to review our quarter first. Some key highlights of our second fiscal quarter were, first earnings per share rose 12% to $0.75 compared with $0.67 in the prior year. Second, quarterly net sales exceeded $1 billion for the first time and totaled nearly $1.1 billion versus $960 million a year ago; an increase of 11%. Third, directed consumer sales rose 14% to $934 million from $818 million in the prior year on a comparable basis. Fourth, North American same store sales for the quarter accelerated rising 3% from prior year while total North American store sales rose 16%. And fifth, sales in Japan declined 2% in constant currency and rose 7% in dollars. And finally, we continued to generate very strong sales growth and significant double-digit comps in China. During the quarter we opened three North American retail stores including two in new markets for Coach; London, Ontario in Canada, and Canton, Ohio, as well as two factory stores. Thus at the end of the period there are 343 full priced and 118 factory stores in operation in North America. Moving to Japan, one location was added. At quarter end there are 163 total locations in Japan with 20 full price stores including eight flagships, 115 shop in shops, 23 factory stores, and five distributor operated locations. And in China we added four new locations, three on the mainland and one in Hong Kong. At quarter end there were 37 Coach locations in China including 10 in Hong Kong, two in Macau, and 25 locations on the mainland in 10 cities. As we’ve discussed previously we are building a multi channel distribution model in China including flagships, retail stores, shop in shops, and factory stores. Indirect sales decreased 8% to $131 million from $143 million in the same period last year. This decline was primarily due reduced shipments into US department stores. We continue to tightly manage inventories into the channel given sales levels at POS which declined 22% for the quarter as discounting in the channel continued and Coach was generally excluded from these sales. As in Q1 we were pleased with the trends in full price sell through in this channel while there was less product available for clearance. International POS sales rose modestly in the period driven by distribution. We estimate that the addressable US handbag and accessory category declined only slightly, between zero and 5% in the fourth calendar quarter. An improvement over the 5% to 10% decline in the prior quarter and a 10% to 15% decline experienced in the first half of the calendar year. At the same time Coach’s bag and accessory sales rose about 3% across all channels in North America over the most recent quarter. In our own stores handbag and accessory sales rose 18%. Separately, its worth noting that we’ve seen continued modest improvement in our customers’ outlook for the economy. Her intentions to purchase Coach over the next year is significantly higher than where it was a year ago. Our total revenues in North America rose at the same pace as our overall top line, up 11%, with our directly operated stores up 16% driven by both distribution growth and positive comp performance. As noted Q2 same store sales rose 3% marking an inflection point in our total North American retail business. As expected our trend improved through the quarter with December our strongest month. Fueling these comp results was significant gains in conversion from prior year offset in part by lower traffic. We were particularly pleased with this improvement as conversion is the driver that we have the most control over through product and service, which Mike Tucci will discuss in more detail in just a moment. In full price stores, average transaction size was modestly lower compared to prior year as increased handbag penetration offset most of the impact of lower AUR, while traffic trends held at Q1 levels. In factory where we continued to leverage the flexibility inherent in our business model to drive sales through pricing we saw increases in all comp metrics. Its important to note that our factory store growth continued to be driven by increased spending of factory channel loyal Coach shoppers and by new consumers entering the Coach franchise. As noted in Japan we posted a 7% increase in dollars on the 2% decline in constant currency. Our market share further expanded against a very weak category backdrop. Our growth in market share in this very tough Japanese environment reflects the relevance of our accessible luxury positioning with the Japanese consumer who is becoming more value oriented. Finally, we were very pleased with our performance in China where our brand is clearly taking hold with consumers both domestically and mainland China and with millions of Chinese who are travelling notably to Hong Kong and globally. Coach’s potential in the China market is reflected in our very low unaided awareness of 8% compared with 72% in the US and 63% in Japan among target consumers. What we also learned last fall through our market research is that the Chinese consumer loves Coach. She rates us highly on all of the attributes she values such as fashion, sophistication, quality, and value and as our awareness increases her future purchase intent is holding among those who have not yet purchased Coach. And among existing Coach China consumers, repurchase intent is surprisingly high at 94%, a higher level than we’ve experienced in the US or Japan. Lastly and perhaps most importantly our significant double-digit comp store sales growth further demonstrates Coach’s great potential with this emerging consumer group. While Mike Devine will get into more detail on our financials and of course I will discuss our outlook in some detail, I wanted to give you this recap. Now I’ll turn it over to Mike Tucci to discuss our North American retail business.

Thanks Lew, and good morning. Today I’d like to review the holiday season touching on the three main areas of our North American business; product and pricing, marketing, and stores. First product and pricing, during the quarter as always we offered a high level of fashion innovation and distinctive newness, as well as a diversified assortment of product to fit a wide range of customer preferences for self-purchase and gifts. The two lead collections for holiday were Madison, which was relaunched in October with new styles and colors, and Poppy, where we added new novelty prints and colors in October and December. Taken together and as planned, these collections represented nearly 50% of full price store sales and targeted a broad array of consumer attitudes. We were also pleased with Brooke, our lead collection for fall and with Alex, a fun group of totes introduced in December at compelling price points. Within handbags the key business driver was Maggie, while Madison wallets dominated within the accessories category. Wristlets and swing packs were also important this holiday as they represented great gifts. We continued to realize improvement in overall handbag and money piece trends during the quarter. We’re also excited about the new Peyton collection which launched on December 26 and is off to a great start. And later this week, we’re relaunching Poppy in a fresh color pallet featuring new silhouettes as well. Building on the success of our price rebalancing strategy which rolled out in July, we offered more handbags choices in the $200 to $300 range in our retail stores. This resulted in increased penetration of handbags to 54% of full price store sales from 51% last year. Additionally we saw further improvement in average store handbag unit sales during Q2 driven by gains in conversion rates over last year. We believe the conversion improvement this quarter is a strong indicator that our product pricing and service efforts are taking hold with our consumers. On the factory side our business remained strong. Here we are focused on maintaining very high levels of productivity through the introduction of innovative factory exclusive product combined with in store and direct marketing initiatives targeted at our best factory customers. Of particular note in our factory business was a higher penetration of factory exclusive product which resulted in improved profitability in this channel. Its also important to note that we manage our North American store business in aggregate. As such we will continue to fine-tune our marketing and promotional levels to maximize the long-term returns of both channels while maintaining the integrity of our full price proposition in retail stores. Moving to marketing, we drove considerable brand interest along with web and store traffic through our digital strategy. Our more traditional outreach included a gift with purchase, magazine inserts, newspaper advertising, and in store visual enhancements, all of which continued to support Coach as a gift-giving destination. We introduced an online gifting application that was interactive and fun suggesting a focused assortment of gift ideas for everyone on your list. Not only was it present on our own website but we launched it on our first iPhone application and through Facebook. In fact Facebook continues to provide us with a dynamic platform to communicate targeted and relevant messages to over a half a million of our highly engaged fans. We launched on Twitter in early October and now have over 200,000 followers there. And lastly moving to our stores, as Lew mentioned we opened 13 new retail stores in the first half of fiscal year 2010, including 10 in new markets for the brand and on average, they’re generating annualized volumes of about 1.7 million. All of these new stores are very profitable and operate at high levels of productivity. As discussed our FY10 emphasis will continue to be on new markets for Coach, along with Canada, where we’ve seen very strong results and are significantly under penetrated with only 18 retail stores today. With that, I’ll turn it back to Lew for a discussion of our over arching strategies and opportunities for growth.

Thanks Mike, our strategies remain largely unchanged focusing on the expansion opportunities both here in North America and increasingly in international markets. In addition as always we’re focused on improving performance in existing stores by increasing Coach’s share of our consumers’ accessories wardrobe while continuing to attract new customers into the franchise. Starting in North America we will open an additional seven stores in the back half of 2010 bringing the total to 20 new North American retail stores for the year. In addition we’ll open three new factory stores. In total we expect North American square footage growth of about 9%, down from about 13% last year. In China we expect to open about seven additional locations in the second half of the year including our first flagship on the mainland bringing us to 15 new locations for the year, resulting in about 50% growth in square footage. Its important to note that we find landlords and department store owners are eager to embrace Coach and we’re having no problem whatsoever in finding locations that are viable today in a country where 125 cities have a population of one million or more. That compares with 50 cities in the US. Given the faster market growth than expected, we’re accelerating our growth strategies in China and are in the process of revising our long-range plans substantially higher. In Japan this year, we now expect to open about seven net new locations including a few men’s shops. In total we would expect our square footage growth in Japan will increase by about 5% this year compared to about 8% in FY09. During the first half of FY10 we opened a net of 12 international wholesale locations with a net of about 13 additional locations planned during the second half, that would take us to about 25 net new international distributor operated locations this year primarily focused on Asia. Thus across all geographies and channels we plan to grow our square footage by about 9% this year, modestly below the 11% distribution growth last year, primarily due to opening fewer new stores in North America. In summary, our holiday performance bodes well for the future and we’re confident that we will continue to deliver healthy sales and earnings growth over the balance of the fiscal year despite a weak consumer backdrop. Importantly our January results [inaudible] the trend that we saw last quarter where the consumer was responding well to innovation, notably our new Peyton collection at a wide range of prices. We’re well positioned for the new normal and expect to further expand our North American market share irrespective of category growth. We will leverage the abundant opportunities available to us both domestically and internationally as we become and increasingly global brand. At this point I’d like to turn it over to Mike Devine, our CFO, for further detail on our financials.

Thank you Lew, Lew and Mike Tucci have just taken you through the highlights and strategies, let me now take you through some of the important financial details of our second quarter results. As mentioned our quarterly revenues rose 11% but direct to consumer which represents over three quarters of our business, up 14% and indirect down 8% due to lower shipments to US department stores. Earnings per share increased 12% to $0.75 as compared to $0.67 in the year ago period as net income rose to $241 million from $217 million. Our operating income totaled $381 million in the second quarter, up 9% from $348 million in the same period last year. Operating margin in the quarter was 35.8% of sales compared to 36.3% in the year ago period. In the second quarter gross profit rose 11% to $771 million from $692 million a year ago and gross margin rate increased to 72.4% versus 72.1% in the prior year. The primarily driver of our gross margin expansion was the reengineering of our product collections that resulted in lower average costs. These sourcing costs improvements more than offset continued high levels of promotional activity in factory stores, lower AURs in full price, and channel mix. As expected SG&A expenses as a percentage of sales rose from prior year levels in the second quarter and represented 36.6% of sales versus 35.8%. Its important to note that the prior year’s quarter benefited from significant accrual reversals for bonuses in the headquarters’ rent. If you were to exclude these items from the year ago period, we did achieve expense leverage in Q2. Once again our two primary direct businesses here in North America and Japan, both provided leverage, not only to their own P&L’s but also to the corporate P&L. Inventory levels at quarter end were $269 million, down about 30% from prior year on a comparable basis. On a unit basis, inventory was down only 15% reflecting our lower average unit costs. As I’m sure you all remember we exited holiday last year with a significantly higher inventory position than planned, and Q2 FY08. If you do a two-year inventory compare, we were essentially flat with December of calendar 2007 levels. Cash and short-term investments stood at $1.1 billion, as compared with $424 million a year ago despite repurchases of $350 million worth of Coach common stock over the last 12 months. During the second quarter we resumed our purchase activity spending $300 million buying nearly 8.6 million shares of common stock at an average cost of $35.03. As of the end of the period $410 million remained available under the current repurchase authorization. Net cash from operating activities in the second quarter was $364 million compared to $256 million last year during Q2. Free cash flow in the second quarter was an inflow of $346 million versus $120 million in the same period last year due to lower CapEx and higher net income and working capital items. Our CapEx spending was $17 million versus $130 million in the same quarter a year ago which was driven by the purchase of our corporate headquarters for a total second quarter 2009 cash outlay of $91 million. Naturally we were very pleased to report second quarter earnings that showed both substantial sequential improvement from the first quarter and demonstrated our ability to achieve strong top and bottom line growth. So taking a look ahead I think it would be helpful for you modelers out there to keep a few things in mind when projecting the balance of the year. First, our gross margin rate is likely to stay at or just above 72% and above last year’s second half levels. Though we would note that Q3 will likely be higher than Q4 due to channel mix as factory will be distorted in the 14-week fourth quarter. Second, as a result of our sales productivity gains and our ongoing operating efficiencies, we now expect that our SG&A dollar growth will be quite close to our top line growth for the balance of FY10. We are targeting these levels in spite of more difficult compares from last year’s second half. This represents an improvement to the modest de leverage we were forecasting last quarter. And finally, our tax rate is likely to remain in the area of 37% for the year as we noted on our last two earnings calls. Separately, I did want to reiterate that based on our plans for FY10 we continue to expect that CapEx will be in the area of $110 million. Before we open it up for Q&A, I wanted to echo Lew’s earlier words. Our January results have shown a continuation of the trend that we saw last quarter with the consumer responding well to our product innovation. And again I wanted to reiterate, the second quarter of FY10 was an extremely important quarter for Coach where we resumed strong top and bottom line growth. Clearly our holiday results bode well for the future and we’re confident that we’ll continue to deliver healthy sales, and earnings gains over the balance of the fiscal year despite the weak retail environment.

Thank you everyone, we would now like to open it up for Q&A.

(Operator Instructions) Your first question comes from the line of Bob Drbul - Barclays Capital Bob Drbul - Barclays Capital: I guess when you look at the results for this quarter that you just reported, can you elaborate a little bit more in terms of how you’re feeling about the back half of the year, the drivers for the back half of this fiscal year for you and just had one clarification question, I think you said that traffic in full price was the same as it was in the first quarter, can you talk about how it was year over year.

You’ll remember that in Q1 we saw an inflection in traffic, an improvement in full price from rates coming out of Q4. That was significant. What we saw in Q2 was that we held that improvement through the quarter and on a positive note, we’re able to convert better on that traffic improvement. While it was down year over year, we got positive conversions which led to an improved performance in comps in full price in the quarter.

And with regard to the second half, we feel very good about our prospects. I mentioned the trends that we experienced in the quarter continued through January. We are managing our business in a very balanced way and fortunately as I said earlier we do have a multi channel distribution model that’s diversified and it gives us a great deal of flexibility. When we couple that with our very strong consumer franchise we believe that the growth that we achieved last quarter is a reflection that we have a lot of runway ahead of us, both here and North America and internationally and we will continue to perform as a growth company.

Your next question comes from the line of Kimberly Greenberger – Citigroup Kimberly Greenberger – Citigroup: I was hoping you could talk about how quickly you think you could ramp up growth in China. Do you think it could be meaningful to your fiscal 2011 results. And I just had a clarification, if you could just help us, the relative magnitude of the items in the gross margin line, that would be helpful.

The first part of the question relates to whether we believe our China could be meaningful in FY11 to our results, the answer is yes and we’re ramping up as rapidly as we can. We’re very focused on the in store experience. Building a franchise requires us not only to have great product and beautiful stores but excellent service so we’re focusing on strengthening the knowledge of our sales associates and our teams so that they can really convey the DNA of our brand in a way that will continue to encourage 94% of those who purchased previously to continue to return. So we’re ramping up new stores. We’re focusing on staff knowledge, operating protocols and the like and we will, as I mentioned earlier, we are in the midst of revising our numbers upward.

Let me firstly take advantage to build off of Lew’s comments about China, what we’ll also see in terms of performance in FY11 versus FY10 is more rapid expansion of the bottom line as we’ve talked about since we opened the business there by buying out Imaginex last year, the first couple of years were going to be investment years and we feel very good that FY11 will be a year of profitability for Coach China. So now shifting to your gross margin rate question the sourcing cost improvements and the product reengineering that was so key to the work done here by our design groups, our merchandising groups and certainly our operations folks is far and away the most powerful delivering about 200 basis points of year over year gross margin rate improvement which fortunately offset continued higher levels of promotions in the factory channel. Now remember we talked last year that we ramped up our promotional levels Black Friday forward so we’re now, we anniversaried if you will, half a quarter of the highest level of promotional activity, we would expect promotional activity the back half of the year to be about flat to what it was in FY09. And then the other offset was the additional channel mix so the combination of promotional activity higher than last year and further but more modest channel mix deterioration were above a point, the difference being the 30-point gross margin rate improvement that we saw year over year.

Your next question comes from the line of Adrianne Shapira – Goldman Sachs Adrianne Shapira – Goldman Sachs: You had mentioned that comps kind of improved through the quarter with December comps being the best, perhaps you could shed some light in terms of the cadence of monthly comps through the quarter and your comments that January kind of running better, is that sort of the comparable level of December or sort of overall quarter. And then just talking about that handbag penetration, it looks like we’ve seen sort of sequential dip from 57 to 54%, so help us think about what’s the right target and how do we read that in terms of the customer response to your new center of gravity in the $200 to $300 level.

With regard to the first part of the question we manage our business with a long-term in mind and we moved away from providing monthly comps because we didn’t think that was a productive metric in terms of the way in which we see our business which of course is a multi channel international business. So to answer your question with a general response, we feel very good about our outlook for this quarter and January trends reflect a continued strong performance within our full price stores as well as our factory stores.

On the handbag penetration in full price, actually the 54 is a very healthy number showing a nice improvement over last year’s level. I just want to clarify handbag penetration in Q2 is historically lower on an absolute basis given the size of our accessory business so the rate of improvement was roughly, it was similar to what we saw in Q1 and importantly we saw significant handbag unit comp at an average store level in the quarter which I think was a big part of our conversion improvement within that.

The only thing I’d like to add to your questions around comps what we would like to do, direct our analysts to look at our overall global business and our top line growth whether its in North America or globally because what it really reflects is that we have two vectors for growth. One is distribution and one is same store productivity and we have enormous runway ahead of us so we feel very, very good. We do not manage our business to achieve the maximum comp that we can in any particular month or quarter. Again we manage it for the long-term in the context of building a lasting franchise.

Your next question comes from the line of Lorraine Hutchinson – Bank of America/Merrill Lynch Lorraine Hutchinson – Bank of America/Merrill Lynch: Was just hoping to get an update on your strategy for Japan going forward and any plans to try to reinvigorate that business, what you’re expecting for square footage over the longer-term and how you’re feeling about that market in general.

First when we talk about reinvigorating our business, our business on a relative basis in Japan is terrific. The market has declined 15% to 20% this year with the consumer continuing to be more value oriented and our business effectively [inaudible] so our market share has grown 15% to 20%. When we look at our underlying metrics in terms of consumers’ attitudes towards Coach they have never been better. So we feel very good about our business within this very challenging market. At the same time we do believe there’s an opportunity long-term to drive the men’s business and our team is focused on that. If you visit our stores today particularly our larger stores, you’ll see a very strong men’s presence and we’re doing very well in the men’s area. Further we believe that there is an opportunity over time to develop Poppy stores in a new channel such as train stations that may only be a handful of stores, we don’t know yet. However what we can say in general is that our team is strong and our business is very strong in a challenging market.

Your next question comes from the line of Michelle Clark – Morgan Stanley Michelle Clark – Morgan Stanley: I was hoping you could give us some additional detail on the unusual expense items from the second quarter of last year and then secondly obviously you’re continuing to benefit from lower product costs benefiting your gross margin rate, how should we be thinking about product costs for the back half of the year.

I was hoping I wouldn’t have to talk about it again, but the big Q2 item last year of course was when calendar 2009 proved to be the Christmas that never came. It put us in a position to realize that we would not be paying significant financial bonuses so in Q2, we had a big single reversal that we talked about, it was actually in our 10-Q and I think Andrea and I have talked about it over the last couple of quarters as well. So you could refer back to that. It was a significant reversal. That coupled with the fact that we bought the corporate headquarters building in Q2 and we had some straight line rent accruals that we were able to release put more than $20 million of good news to the SG&A line in Q2 of last year which we just anniversaried and so if you were to do the math and adjust that out, you’d actually see that we did gain SG&A leverage this Q2 and so we’re feeling quite good about that. Now that being said, we’re going up against some pretty significant headwinds now for the second half of the year. Not only did we reverse what we had accrued in Q2, in the back half we didn’t record additional bonuses and our plans are to do that this year. So that will be a negative compare. We also as you remember put a number of saving initiatives in place during Q3 of last year. We took a reduction in force, among many other activities. And lastly we’re looking to ramp our investment opportunities to make sure that we can deliver balanced strong top and bottom line growth for the years to come. So the SG&A compares will get a little more challenging for the back half but as we shared in the prepared remarks with the businesses operating as effectively as they are the direct businesses turning out leverage both to their own P&L’s and to the corporate P&L, the centralized core corporate functions of design, distribution, administration, marketing, etc. as you’ll see when the Q comes out we delivered about a point of leverage from those areas in Q2. The big traditional parts of our business are operating extremely effectively so we now believe that that can offset some of the investment spending and some of the savings headwinds that we see in the back half of the year. So we’re feeling very good about where SG&A leverage will come in. In terms of product costs, we would expect to see similar types of savings that we just experienced in Q2 in the back half of the year. Some of the difference will be channel mix will once again continue to moderate, not be as big a negative drag as it had been in prior quarters and also we’ll look to have promotional levels in the factory channel that are very close to back half levels of last year versus a negative compare in the first two quarters of this year.

Your next question comes from the line of Neely Tamminga – Piper Jaffray Neely Tamminga – Piper Jaffray: Just a question here on some products, just getting a sense here in terms of timing of Hamptons relaunch in the spring, which quarter would that really fall in and then maybe could you dissect for us a little bit on Poppy, that’s just in stores and actually online right now, as well as Hamptons, the balance of the price points. I think its my imagination potentially but are you taking the price points of Poppy up a little bit in terms of the balance of the price points. If you could talk through that a little bit for the second half of this year.

Can you just clarify I think when you’re speaking to Hamptons, do you mean Madison because is not really a full price proposition at this point, it’s a factory proposition. Neely Tamminga – Piper Jaffray: Yes I think so. You’re doing a major launch in spring, is that right.

We’re actually, let me just give you some highlights for our spring product flow within in full price and then I can speak to factory, it’s a good opportunity just to get some depth out there around product. One is in full price, actually today online and Friday in stores we relaunched Poppy very completely from a product assortment standpoint including a new style there. We do see some opportunity in Poppy more broadly to offer more varied price points to build on the success of 198 in handbags, but to broaden that up the spectrum and you’ll see us really concentrate on that in the back half of the year and as we get into Q1 of next year to anniversary. On the Madison side of the business we also have a very strong lineup for the back half. There’s a significant refresh of Madison hitting the stores this weekend and what we found really importantly is that we’ve built a new base in full price on product anchored by Madison, a little bit more modern, contemporary, higher price points, and then on the other end of the spectrum Poppy which is more of a youthful and introductory price offer and we fill in the middle with what we would call Coach classics like a Brooke, or a Peyton which is in the stores today and importantly as we launch [Kristan] later this spring which we think will be a very dominant flow for us in March. On the factory side of the business what we’ve done is we’ve built a base around Hamptons and Soho and that was really our full price base from several years back and there we see the opportunity to restore levels of made for factory penetrations and I want to be clear that as we entered the back half of last year we went in with a significant burden to liquidate unsold inventory in our factory channel. We will not anniversary that this year which will provide us a much more balanced and healthy platform, potential margin improvement, and balancing our sales growth with a very different mix of goods. So we feel good about our product lineup in both channels and the anchors of Madison and Poppy will continue in full price [straight through].

Your next question comes from the line of Christine Chen - Needham & Company Christine Chen - Needham & Company: Just wanted to ask your sharper pricing clearly has been successful, have you thought about skewing the mix towards even a greater than 50% penetration and then can you talk about the penetration of factory exclusive, you said it was up, just wondering if you could give a number around that.

Sure, on the pricing strategy we really believe that we’ve hit the right balance. There’s a lot of fine-tuning that we’re realizing and as we get more experience, more data, and we see conversion rates improve, we believe that the balance in mix is a driver of that. I think if I, looking back in hindsight in the quarter the opportunity that we see is to use some of the performance in handbag unit sales as a way to drive investments going forward. And taking somewhat more of an aggressive approach on certain key items in the mix to deliver higher returns is more of an opportunity than tweaking our pricing strategy which we’re very pleased with at this point. We think we’ve found a sustainable level going forward. In factory the opportunity there is to return to made for factory rates in the 75%-ish range, 70 to 80% is very much doable in the back half and a much lower level of clearance activity in our factory stores gives us a significant amount of pricing flexibility and allows us to leverage some of the cost benefits that we built into the business.

And for those of you less familiar with Coach than others, when Mike or we refer to clearance, we’re talking clearance of full price products. We do not go on sale in our full price stores and as a result when we discontinue product any remaining inventory is eventually sold in our factory stores.

Your next question comes from the line of David Schick – Stifel Nicolaus David Schick – Stifel Nicolaus: Just a quick question, you talked a little bit about inventory managed back to 2007 levels and the number was quite low where you finished anyway, do you feel that the low inventory held you back in any categories, lines, etc.

No we feel really good about our inventory position and that’s why I called out in the prepared remarks that the compares against last December numbers is probably not the best compare. I mentioned already with the Christmas that never came and we were in over inventory position at the end of last December and so to have units down only 15% from that level, feels very healthy to us. Our supply chain is as usual operating at peak efficiency, the merchants across the business identifying opportunities and we’re well positioned to chase products. So we feel inventory levels are right where we need them to be. David Schick – Stifel Nicolaus: And I know you don’t want to talk about months and shorter-term trends but you’ve talked in broad terms about mid single-digit comp for the business on the long-term, would you care to just sort of talk about that as your long-term planning once again.

We haven’t talked about mid single-digit comps for a while and actually Andrea reminded me today that this is the first positive comp we had in five quarters. We do feel as we move out of the recession that we will be able to realize double-digit top line growth, double-digit bottom line growth and we should be able to achieve low to mid single-digit comps on a continuing basis. If we get some wind at our backs, it could be higher. If the recession worsens, it could be lower. Again we pace ourselves and our concern was most of all with the developments of our franchise.

Your next question comes from the line of Liz Dunn – Thomas Weisel Liz Dunn – Thomas Weisel: Congratulations on a great quarter, you talked about moderating channel mix, as we go forward, it seems like the distance between the factory and full price comp has narrowed, did less clearance impact your factory business and how should we think about that going forward as a factor that will impact the factory comp, also how should we think about the product pipeline as it will impact that factory comp.

What I would say is that the factory opportunity is one of balance and while we generated growth last year with a higher level of clearance activity our projection and the way we’re buying the business going forward is to generate balanced growth this year with a different composition of inventory and a more dominant mix of made for factory product. Its actually a much more flexible and productive way to run the business without that overhang burden of clearance. So we feel good as we’re positioned going into the back half. I do think its important to understand that there’s a balance here between sales growth and margin and profit growth and that we actually see and opportunity here to really manage our business for the long run and find a way to produce productivity gains in factory but also leverage margin opportunities so we can make more money and bring more profit to the bottom line. In terms of the pipeline, we’ve done a really nice job, the teams have really worked hard through the second quarter based on our trends and into opening up Q3 to accelerate receipts in the pipeline. We’ve spent a lot of time on forecasting and carving our production needs with our supply chain and we’ve gone in, particularly in late Q3 and Q4 and we’ve been able to secure additional production in factory inventory to cover sales in the back half which we feel will allow us to go into our factory peak season, the summer season, in very good shape from an inventory standpoint.

Your next question comes from the line of Randy Konik – Jefferies & Co. Randy Konik – Jefferies & Co.: A quick question on China, can you talk about positioning of the Coach brand within the Chinese luxury market, maybe just compare how that compares to markets in the US and Japan.

Briefly we position ourselves as an authentic quality New York fashion brand, and each of the words mean something so when we talk about authentic, we have deep roots. Our quality talks to workmanship and materials. New York talks to spirit and verve and when we talk to fashion it talks to relevance and that positioning resonates extremely well with our target Chinese consumer particularly because she is cosmopolitan. And through the internet, media, movies, and the like, she sees herself as a citizen of the world and does love New York.

Your final question comes from the line of Dana Telsey - Telsey Advisory Group Dana Telsey - Telsey Advisory Group: Can you talk a little bit about the expense impact of China and read and also the benefit of online to sales growth and margin impact there, and just lastly have you seen any of the Japanese consumers spending abroad given the strong yen maybe in Hawaii or Korea or anything like that.

A few things on the Japanese consumer, first she’s travelling less and second she’s spending less while she’s travelling and, which is a reflection of the general situation in Japan. Now having said that we do have a very robust business as you well know with Japanese travelers and we expect that to continue. The big unlock for us is the opportunity from Chinese travelers and we’re finding any offsets that we’re experiencing, any losses that we’re experiencing from reductions in Japanese sales from international travelers more than offset by increases from Chinese travelers.

I think your first question was about the investment spending we’re doing in Coach China and RK, we don’t have any new projections for you. Said differently I think we’re going to land about where we’ve been talking about all year long which is that the two taken together will be about a $0.04 to $0.05 impact to our fiscal year 2010. Of course as we get later in the year and China gains momentum and we get closer to the launch of the RK brand, we’re going to see the pendulum swing I guess a little bit where China will be working its way to profitability and our spending levels will increase in RK as we get ready for launch. In terms, and the other question about the additional Japanese travelers, Mike sees the Japanese travelers visit his stores here in the US and I think the other question was about dot com, maybe I could ask him to take those two.

Just on the tourism idea more broadly we are seeing some health in what I would call very dominant tourist markets, New York City, Vegas, Hawaii, so we’re digging into that to see what that’s about and see how that trend sort of unfolds going forward. On the digital side with our dot com business we actually see it as our most pure channel and interestingly we had a very nice quarter there and very significant rate of improvement in the business. Very, very strong traffic there and in particular what we are pleased with is that we got a very nice response to our email strategy within the quarter. Demand sales from emails was actually up nicely in the quarter and that helped us we believe to get some of our pricing message out, to get our positioning message out, potentially drive awareness and get a longer view in terms of driving traffic into our stores.

Thank you everybody for joining us for our Q&A. I’m going to turn this over to Lew for some closing remarks.

I’d like to just briefly make a few comments. Clearly there’s a lot of questions around margin, around comps, around outlook, around China growth, and the bottom line is that we feel excellent about our prospects. The quarter that we experienced and the trends in January with rejuvenated growth gives us confidence that our growth model is in tact. And we just say stay tuned and we’re going to continue to work the business and we will report it to you accordingly. Have a good day.