Andrea Shaw Resnick - SVP, IR Lew Frankfort - CEO Michael Devine – EVP & CFO

Robert Drbul - Barclays Capital Kimberly Greenberger - Citigroup Michelle Clark - Morgan Stanley Christine Chen - Needham & Company Todd Slater - Lazard Capital Markets Liz Dunn – Thomas Weisel Partners David Schick – Stifel Nicolaus Erwan Rambourg – HSBC Dana Telsey - Telsey Advisory Group

Good day and welcome to the Coach conference call. Today's call is being recorded. 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. With me today to discuss our quarterly results are Lew Frankfort, Coach's Chairman and CEO, and Michael Devine, Coach's CFO. 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 or 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 third fiscal quarter 2009 results and will also discuss our strategies going forward. Michael 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 good morning everyone. As noted in our release we were pleased to generate sales that were essentially even with prior year and encouraged by the stabilization of our comparable store sales to pre-Christmas levels in North America. Importantly, we enhanced the vibrancy of our franchise by providing our consumers with innovative relevant product at a compelling value without going on sale in our full price stores. Our third quarter results demonstrate our continued resilience, resolve, and ability to navigate through this challenging environment. In addition to steps that we’ve taken to reduce our expense structure will help position Coach to improve our profitability. While we remain cautious about the near-term we are very positive on our longer-term outlook underscored by our initiation of a dividend which we just announced this morning. As you know we have a business model that generates significant cash flow and are in a position to take advantage of profitable growth opportunities while continuing to return capital to shareholders. This action reflects our financial strength and confidence in our business outlook. While I will get into further detail about current conditions and the outlook for the categories and our business shortly, I did want to take the time to review our quarter first. Some key metrics of our third fiscal quarter were, first, net sales totaled $740 million versus $745 million a year ago, a slight decline of 1%. Second, earnings per share excluding one-time charges totaled $0.38 compared with $0.46 in the prior year, a 17% decrease. Third direct to consumer sales rose 9% to $634 million from $582 million in the prior year on a comparable basis. Fourth, North American same store sales for the quarter declined 4%. And fifth, sales in Japan rose 1% in constant currency and 14% in dollars. In addition we are continuing to generate very strong sales and comps in China where we just concluded the acquisition of our retail businesses on the mainland. During the quarter we opened two North American retail stores, Youngstown, Ohio, a new market for Coach, and Temecula, California between LA and San Diego, as well as three factory stores. We also closed two retail locations. In addition one retail store and one factory store were expanded. Thus at the end of the period there were 324 full price and 109 factory stores in operation in North America. Moving to Japan, one location was added and one expanded. At quarter-end there were 161 total locations in Japan with 20 full price stores including eight flagships, 114 shop in shops, 22 factory stores, and five distributor operated locations. In direct sales which for context represents less then 20% of Coach’s sales on an annualized basis decreased 35% to $106 million from $162 million in the same period last year. This decline was primarily due to reduced shipments into US department stores. We continue to tightly manage inventories into the channel given lower demand with sales declining 30% for the quarter as discounting continued at high levels and Coach was generally excluded from these promotions. International retail sales rose modestly in the period driven by distribution while shipments also declined as we closely managed inventories in this channel as well. We estimate that the addressable US handbag and accessory category declined 10% to 15% during the first quarter of calendar 2009. At the same time Coach’s bag sales declined 2% across all channels in North America. Our total revenues in North America were down 5% with our directly operated stores up 7% as distribution growth offset the negative comp performance. As noted, same store sales which were down 4% stabilized to pre-Black Friday levels. On an aggregate basis the biggest difference from the holiday quarter trends was traffic which improved from 2Q comp levels in both channels. We would note that in full price stores our weak traffic pattern from the previous quarter improved while conversion and the average transaction size both declined modestly from prior year. In factory where we continue to leverage the flexibility inherent in our business model to drive sales through pricing we continue to see solid increases in traffic and conversion while ticket was flat. It should me noted that month to date, April, comparable store sales are consistent with our third quarter experience after adjusting for the holiday shift. As noted, we posted a 1% gain in local currency in Japan and a 14% gain in dollars. Business in Japan continued to be fueled primarily by distribution through both new stores and expansions as our market share further expanded against a weakening category backdrop. In fact preliminary estimates for calendar year 2008 suggest that Coach now holds a 14% share of the Japanese imported accessories market where our accessible, luxury proposition is resonating with a more independent, less status oriented Japanese consumer. I also wanted to call out China which of course represents only a very small portion of our total sales today. I just visited the region the other week and was truly amazed by the rapid market development and how the Coach brand is taking hold with consumers both domestically and Mainland China and with millions of Chinese who are travelling notably to Hong Kong and globally. We have been especially pleased with the transition of our first 10 locations in Hong Kong and Macau last September where we have seen a significant positive impact resulting from Coach’s direct operation of these stores. Similarly we’re looking forward to the seamless integration of the Mainland China locations which were just transitions on April 1st. Our business performance in the region to date including double-digit comparable store sales growth demonstrates that Coach has significant potential with this emerging and very important consumer group. We have now built an on the ground team and deepened our insights into the Chinese consumer through substantive market research. This experience and market knowledge together with our financial strength, multiple distribution channels, and brand positioning provide a solid foundation for Coach’s expansion in the Chinese market where the opportunity is large. In fact today, among target consumers in Mainland China, our brand awareness remains very undeveloped at only 6% on an unaided basis compared to 63% in Japan and 70% in the US. While Michael Devine will get into more details on our financials and of course I will discuss our outlook in some detail, I wanted to give you this recap of the quarter and touch on some of the product initiatives. During the third quarter we maintained a high level of product innovation and distinctive newness. Beginning on December 26, we transitioned to spring with the introduction of the Penelope collection, offered in leather, our classic signature, and Op Art across multiple silhouettes, and anchored by our shoppers’ style. This was followed by an updated heritage stripped group in February and the new Parker Collection in March. With its soft feminine pleats and twisted straps, Parker represents another significant design evolution for Coach. It was supported by our spring ad campaign and its two key styles, the shoulder bag and hippie, represented 12% of sales in March. Earlier this month we introduced a collection of bags and accessories inspired by our Bonnie Cashin [archives]. While the whimsical prints and bright colors have captured the attention of many, the best selling styles are the convertible foldover bags offered in leather and signature. And this coming Friday, we’ll compliment our assortment with the introduction of Cricket, a spectator carry all based item group in a broad range of colors. Cricket, along with our strong Madison collection updated in a beautiful spring pallet across multiple fabrications are the key statements for Mother’s Day. Perhaps most exciting in our upcoming product introductions is the Poppy collection, a new attitude for Coach arriving in July. Poppy is youthful in appeal offering a variety of fresh silhouettes, vibrant colors, and particularly accessible price points. A new Poppy logo is inspired by notebook graffiti and evokes a playful energy that rings throughout the collection. And we just finalized the robust marketing plan to support the launch which will utilize several new elements for Coach, including social networking websites such as Facebook and fashion blogs to get the word out along with an interactive global online campaign entitled, Are You Poppy. Moving to our stores, as you know we’ve incorporated a discussion of new store performance as part of our quarterly recap for more then a year now, so I want to touch on these metrics. We opened 30 stores in the first nine months of FY09 and am pleased to note that they continue to perform well, essentially in line with pro forma volumes. These new stores are very profitable and operate at high levels of productivity. We also wish to note the planned closure of four retail stores which are underperforming. They include Greenwich, Connecticut, which closed on the last day of the quarter, along with Worth Avenue in Palm Beach, Green Valley Ranch and Henderson, Nevada, and Embarcadero, in downtown San Francisco. These remaining stores will close by the end of June. An important of strategic focus in FY10 is the price positioning of handbags and accessories. Building on our FY09 product initiatives we will rebalance our assortment within our current range by increasing the proportion of bags introduced at prices below $300. Beginning in Q1 about 50% of our handbag choices, or about 70 SKUs in an average store will be at retails between $200 and $300, as compared to an average of 30% in FY09. This reweighting of our assortment will result in an average unit retail reduction in bags and accessories of 10% to 15% next year. Our goal is to provide our consumer with more choices at prices she is willing to spend or is able to afford. We are exploiting this opportunity by designing into this price point, engineering collections that can provide this excellent value and still generate strong margins. We believe this will drive our handbag penetrations higher, thereby improving mix, increasing average transaction size, and ultimately improving productivity. As we’ve discussed many times, we have two drivers of long-term growth. First is distribution as we expand our global network of store locations with an emphasis on North America and China, and second, is productivity which we drive across all geographies through the introduction of innovative and relevant product in a compelling store environment. The current macroeconomic backdrop does not change our long-term focus, although we have sharpened our focus on distribution putting more emphasis on the largest opportunities both in North America and abroad. We will continue to build market share here in North America and grow our store base although at a slower pace in FY10 due to the challenging environment. Given our strong productivity metrics and our brand proposition, we are a highly desirable tenant and as such have ample real estate opportunities to choose from. However, our primary focus is on restoring productivity to our existing full price store base. Thus we are limiting our new North American retail store openings to 20 locations rather then the 40 we have opened for each of the last two years. In addition we’ll focus on those store segments where we have seen the best relative performance, notably Canada with six openings planned for next year, and new US markets. A total of 13 of our new store openings for next year are targeted for new North American markets for Coach. In addition we have decided to suspend retail expansion activity. We have been slowing the pace of square footage growth in Japan given the economic environment by reducing the number of new openings and stemming expansion activity. In FY10 we expect to open a net of seven new locations while in FY09 we will open a net of five new locations. And as I’ve mentioned we will continue to develop the emerging market potential particularly in China where we have seen excellent results as I’ve mentioned too. In FY10 we expect to open about 10 new locations in China and looking further out over the next five years, we expect to open a total of over 50 new locations, aggressively growing our sales and market share in this rapidly expanding region. In fact our market research indicates that by 2013 the China, Hong Kong, and Macau premium handbag and accessories market will likely exceed $2.5 billion, a significant increase from its current size of about $1.6 billion. Our goal is to become one of the top three imported handbag and accessory brands with sales of over $250 million and a market share of at least 10% by fiscal 2013, up from about $50 million and 3% today. With the investments we will make in stores, marketing, organization, and infrastructure, we are well positioned to replicate our success formula in Japan since taking control of the business there in 2001. In addition to China, there are several other international growth markets that we will focus on over the next few years. In Asian markets such as Korea, Taiwan, and Singapore, the Coach brand is among the top five brands with good headroom for further strong growth. We also have made significant headway in The Middle East and expect continued strong performance. Finally as we grow our brand awareness across new markets, global travelers will increasingly represent a significant growth opportunity for Coach. At about $4 billion in global sales for fashion and accessories, we believe we can double our share of the global travel retail market over the next three to five years both through new locations and improved productivity. In FY10 we expect to open more then 30 new locations in what we call our international wholesale markets increasing our store base to about 190 locations. In summary we’re encouraged by the stabilization of our business and we remain unshakable in our resolve to not only weather this storm, but to emerge a stronger company for it. At this time I will turn it over to Michael Devine, our CFO, for further detail on our financials.

Thank you Lew, Lew has just taken you through the highlights and strategies, let me know take you through some of the important financial details of our third quarter results. As mentioned our quarterly revenues declined 1% with direct to consumer which represents over 80% of our business, up 9%, and indirect down 35% primarily due to lower shipments to US department stores. Excluding the impact of certain one-time items, which I will touch on in a moment, earnings per share for the quarter declined 17% to $0.38 as compared to $0.46 in the year ago period as net income totaled $123 million, down from $162 million. On the same basis, our operating income declined 23% to $199 million in the third quarter versus $257 million in the same period last year. Operating margin in the quarter was 26.9% compared to 34.5%. In the third quarter gross profit declined 6% to $525 million from $558 million a year ago and gross margin rate was 71% versus 75% in the prior year. As planned, we maintained a high level of promotional activity in factory stores which was the primary driver of our lower gross margin rate. Channel mix and the sharper pricing initiative in our full price divisions also dampened margins. We anticipate delivering similarly high rates of gross margin in the coming quarters. Adjusted for one-time charges, our SG&A expenses as a percentage of sales rose from prior year levels as expected, in the third quarter and represented 44.1% of sales, versus 40.5%. As a result of our recent actions we believe our expense spending strikes the right balance between driving growth opportunities and operating efficiently while overall top line growth remains challenged. As mentioned in our press release during the quarter we recorded three one-time charges. These consisted of expenses related to the reduction of corporate staffing levels in the US, the planned closure of four North American retail stores, and the closure of the company’s sample making facility in Italy. Collectively, these actions increased the company’s SG&A expense by $13 million in the period and negatively impacted earnings by $8 million after tax. The actions taken will help the balance of FY09 in a modest way and position us well for FY10. Combined with other key measures previously implemented, such as the elimination of merit-based salary increase and a hiring freeze outside of critical growth areas, we now expect to capture over $50 million in total pre-tax savings next year. Inventory levels at quarter end were $358 million, up about 23% from prior year on a comparable basis. This compares favorably to the dollar inventory growth level of 39% reported at the end of Q2. On a unit basis inventory was up 10%. This differential reflects our higher average unit costs. Our inventory increase allows us to support 45 net new North American stores, 14 net new locations of Coach Japan from the year ago period, as well as our 27 Coach China stores. Cash and short-term investments stood at $551 million as compared with $660 million a year ago. During third quarter we repurchased and retired 3.6 million shares of our common stock at an average cost of $13.98, spending a total of $50 million. As of the end of the period $710 million was available under the current repurchase authorization. Net cash from operating activities in the third quarter was $207 million compared to $85 million last year during Q3. Free cash flow in the third quarter was an inflow of $180 million versus $52 million in the same period last year. Our CapEx spending was $27 million versus $33 million in the same quarter a year ago. The main drivers for the year over year cash flow improvement are a near $60 million swing in timing of holiday receivable collections and substantially lower cash tax payments this year versus last. We currently anticipate CapEx in FY09 to come in at about $165 million excluding the purchase of our headquarters building earlier this year. That is about $15 million lower then we projected at the end of the second quarter primarily due to the elimination of additional long-term payback initiatives as well as negotiated savings for ongoing projects. Its important to note that based on our current plans for FY10 we would now expect the CapEx for next year will be down substantially and will be in the area of $110 million. Before we open it up for Q&A, I wanted to reiterate Lew’s earlier comments, our third quarter results demonstrate our ability to navigate through the challenging environment. In addition the steps that we’ve taken to reduce our expense structure will help position Coach to improve our profitability. Thank you for your attention and now Lew, Andrea, and I will take some questions which will be followed by a brief summary by Lew.

(Operator Instructions) Your first question comes from the line of Robert Drbul - Barclays Capital Robert Drbul - Barclays Capital: Can you address the timing of your decision to initiate a dividend, why did you choose to do this today and I guess the second question that I have is, when you talk about the pricing strategy that you’re undertaking, do you believe you’ve found the appropriate level with the SKUs and the timing of it and is the part that you’re talking about, is that the product that will be designed for those price points between $200 and $300?

Let me take your second question first, the answer is yes to both. We understand through our pilots and our consumer research that there is a sweet spot in $200 to $300 range that, where we have been under represented in the last year or two and it is that area which we’re looking to distort by rebalancing our assortment and putting at least 50% of our SKUs in handbags at those price points and what we understand from consumers, in addition to great product they want exceptional value and they need to really feel when they pick up the product in addition to feeling great about it, that it represents a great value. From our testing and our experience we believe that that is the right place to be. In terms of our FY10 starting with Poppy, we have engineered our collections into these price points and we’re excited to see Poppy’s arrival at the end of June and we do believe its going to be a very successful introduction. I might add one other thing, we’re in the midst of a pilot with Poppy and its actually running at about 16% in pilot which we feel really good about because its one of the highest results we’ve achieved in a pilot. Getting to the timing of the dividend, we thought that there was no better time then during a period of great economic uncertainty to send a clear and strong signal to investors that our business model is healthy, vibrant, and we feel excellent about our prospects for the future.

If I could just build on Lew’s comment too for the financial modelers out there around the price points, because it may seem a bit counterintuitive, but this ultimately is designed to improve productivity. What we’ve seen over recent quarters as the consumer spending has been challenged, is our handbag penetration has declined over time and as a result its negatively impacted average ticket. So this change is designed to drive handbag conversion, increasing penetration and although a lower average price for handbags, drive actually a higher ticket and productivity and improvement in operating income dollars into the stores.

Your next question comes from the line of Kimberly Greenberger - Citigroup Kimberly Greenberger - Citigroup: I was hoping you could talk to us about the SG&A savings and any sort of guidance you might have on the SG&A growth rate you expect in the fourth quarter given the addition of the China acquisitions and then if you could just comment on the nice improvement in your comp store sales here from the second quarter to the third quarter, was that driven more by a pick up in factory, retail, or equally between both channels.

I’ll address the question on SG&A and kick it over to Lew to answer on the comp question, as you know we’ve suspended giving specific guidance looking forward but in terms of our SG&A rate we feel very good about the actions that we’ve taken. As we said in the prepared remarks, we believe the steps we’ve taken will allow us to capture an additional $50 million SG&A reduction from our fixed overhead structure. Some of that will come back to us in Q4, no question, as the actions we’re taking in this March-ending quarter. Not in as complete a way as you heard, three of the four stores are still open. We will close them by end of the year and we haven’t completely closed the Italy facility as yet. That will be an activity that will continue to evolve through the quarter but also be complete by year end. So, the impact for Q4 will be helpful but not nearly as impactful as what we’d anticipate for next year, our FY10.

On the comp question as you know, we have an integrated business model where we look to use both channels in the most advantageous long-term way possible and we’re quite different then other companies in that, [we’ll] not go on sale in our full price stores and what we have done is use our factory stores as our diffusion channel to drive higher sales at considerably profitable levels. What we experienced in this last quarter is a stabilization at pre-holiday levels and an improvement in our traffic levels in both channels. We don’t wish to be more specific then that because we actually are able to shape the comp by individual actions in each of those channels but we approach it as an integrated business.

Let me just also follow-up, I recall now you asked about Coach China and its impact, you may recall at the outset of the year we talked about China having about a $0.04 dilutive impact on FY09 as we built infrastructure in advance of capturing sales volumes, we’re actually performing a little bit better then that but directionally, I think that’s still a good number to build into models.

Your next question comes from the line of Michelle Clark - Morgan Stanley Michelle Clark - Morgan Stanley: The first question, if I look at your SG&A performance in the third quarter, the expense you leveraged was a little bit greater then I would have expected on a negative four comp, so I just wanted to drill into some detail, figure out what’s going on in the expense line there and then second question, SG&A outlook for FY10, can you just give us a sense of what you’re new leverage point for FY10 given the announced cost reductions of about $50 million.

So to give you a little additional color on the quarter in the SG&A line, I think if you were to take a look at extracting the one-time events, if you were also to take out China that we just spoke to, take out our investment in our new merchandising initiatives, what we’re looking at really is a SG&A rate for the quarter of under 43%, about 42.9 in that area, and so the deleveraging as you called it is much more modest when you look at it on that basis. So against a flat top line revenue essentially down I think a little more then half a point, to actually deliver SG&A within 250 basis points of the year ago quarter, we actually feel pretty good about. We’re done, we’re not there yet, as we’ve talked about. We taken these steps, we continue to look at other opportunities and there are many that go beyond these three one-time actions in our blocking and tackling day to day. We’re negotiating hard with vendors. As I mentioned we’ve taken our CapEx expectations down significantly. That will help us through the depreciation line. So there’s a number of other opportunities in addition to these one-time events. We feel good about driving our leverage point down. You remember well we used to talk about having a mid to high teen top line growth to achieve SG&A leverage. I think you’ll see us realize something significantly below that, both in Q4 but especially in FY10 and going forward. Michelle Clark - Morgan Stanley: And then just to follow-up the investment in new merchandising initiatives, how much longer is that going to continue.

We have some new collections in development. We plan to have those in our product offering into our foreseeable future. Its probably in an investment mode through FY10 and into FY11.

Your next question comes from the line of Christine Chen - Needham & Company Christine Chen - Needham & Company: I was just curious if you could give us an update on how handbags in the higher price point category are performing and what they are as a percentage of sales for the $400 and up bag and then [inaudible] factory and full price.

Handbags over $400 in this last quarter performed at the same penetration levels as they did the prior year representing about 12% of our total sales. The other question? Christine Chen - Needham & Company: And then the customer base between factory and full price, has that remained constant even in this environment.

It has, we continue to see growth in factory coming from three places. First is existing factory store buyers purchasing more, existing households. Second are international travelers. And third are consumers who are new to our database. These are consumers who we consider first time users entering the franchise through factory. Christine Chen - Needham & Company: And then the promotions that you [inaudible] to your best factory consumers to try and get them to cross over to full price, are there any things you can share with us anecdotally on the success of that.

Let me answer it in a few different parts, first the people who are, the consumers who were primarily our factory store consumers appreciate a great buy so when we invite them to purchase at full price as a preferred customer, they respond extremely well. We’re measuring their willingness to then convert to a full price buyer without a special offering and we’re finding that not that many are willing to do that. They’re really looking for a great value. Christine Chen - Needham & Company: I guess that’s why your overlap has remained very consistent over the years.

Its remained consistent.

Your next question comes from the line of Todd Slater - Lazard Capital Markets Todd Slater - Lazard Capital Markets: Kudos on managing through the quarter. Can you provide a little more color on the store closings which are in some of the most highly concentrated wealth markets in the world, just wondering how much and in what ways they were under performing and what does this say about the brand’s possible relevance to the upscale consumer and then also if you could give us some guidance on the cost of goods line going forward especially as it relates to some of the decreases we’re seeing in leather and raw material costs and deflation on other input costs. I’m just wondering when we might start to see the benefits of that.

Okay, just for context we have a fleet, full price fleet, as you know more then 300 stores so these four locations represent just 1% of our stores. And you’re correct, they are in the Greenwich Avenue and Worth Avenue, are in [inaudible] areas and the reality is that the rents are the highest in these areas as well. What we have found is that in high street locations our performance has been most effected because of lower traffic and these stores are very expensive stores to operate and we decided that this was the right time to rationalize our approach to them and we took two location, Greenwich and Worth Avenue, when we decided it was time to leave those locations.

In terms of gross margin rates, we also feel very good about delivering the 71% in the quarter while we were working through some of the inventory challenges and the progress we’ve made there. You’re absolutely right to call out some of the raw material costs actually working their way downward and our supply chain group headed by Angus [McRae] and others have worked very aggressively and we are going to capture those savings and they will be built into our FY10 product costs. So that is the good news and we will need that good news to help us offset the more aggressive sharper pricing initiatives of Poppy and other collections that Lew spoke to. So I think you can anticipate to continue to see gross margin rates staying high in the level of 70% to 72% for the coming quarters.

Your next question comes from the line of Liz Dunn – Thomas Weisel Partners Liz Dunn – Thomas Weisel Partners: I guess relative to store closures, are there other stores that are being considered for closure and then I just wanted to get some comments from you on your longer-term strategy as it relates to US department stores and growth or what you plan to do with your cash given the growth doesn’t look—

First, its actually coincidental to the timing of these closures for this quarter because every year in the spring, post-holiday, we go through a complete portfolio review of all of our locations and we have completed that review now for this year and we don’t contemplate any additional closings during the course of the next year. And again the four closings represent just a little bit over 1% of our fleet. Relative to our US department stores, they are important channel although for context they represent only about 10% of our sales and we do have a loyal Coach consumer who primarily shops in North American department stores. So we continue to see them as an important part of our franchise and we’re looking for that business to stabilize once the promotional environment improves which I know the stores are working on today. In terms of use of cash, Michael do you want to answer that.

Sure, I think firstly I would start with the good news is that in spite of our challenges to the top line, we feel very good about the business’ ability to generate significant free cash flow which is why as Lew mentioned at the outset we’ve elected at this point to return additional capital to shareholders through a dividend program. We also once again during the quarter bought back our stock at these accretive levels and as we mentioned we still have $710 million available to us under the buyback program. But first and foremost cash flow generation gives us the ability to continue to grow the business both domestically and with an increasing focus internationally. We stepped up this year and bought out our China distribution partner, so we could take control of that robust market and it was great to be able to have the free cash flow to be able to do that. I think down the road we’ll look for similar opportunities to drive top line and bottom line growth and we have the cash position to allow us to do so.

Just to build on the international part very briefly, we are an international company. We are not yet a global business and its evident by our successes in East Asia, The Middle East, and now early stages China, that the opportunities for us are abundant and we are looking to develop an entry strategy as well for western Europe starting with England and France and even though we’re not in a position to be more specific then I am now, you can expect that these will be markets we will be entering in the next few years. Over [inaudible] we are enthusiastic about the opportunities outside North America and Asia and particularly because our concept as an accessible luxury brand resonates with consumers even more today then ever before. Consumers are looking for innovation, relevance, and value and as an alternative to the traditional luxury brands, there is no better choice then Coach. Liz Dunn – Thomas Weisel Partners: Congratulations on managing in a difficult environment, good luck.

Your next question comes from the line of David Schick – Stifel Nicolaus David Schick – Stifel Nicolaus: Just a question, if you look back now its been a pretty firm trend now over a year and the disparity between the revenue growth that you show and that the wholesale indirect business shows, how does that make you think about the structure of the company and maybe margins etc. over five plus years as we’ve seen this trend sort of continue to play out.

I’ll take the margin portion of it, we still, our wholesale divisions even at lower volumes are still remarkably profitable. We have very, as you’ve come to know us well, we have very small wholesale teams here in New York with modest in the field presence, US and internationally. So the SG&A line of these wholesale divisions is extremely modest against a healthy gross margin rate so there’s no question that the divisions contribute in a meaningful way to bottom line rates of profitability.

The only thing I can add there is that from a grand positioning perspective, our philosophy is to offer consumers an opportunity to purchase Coach in image enhancing environments where ever they choose to shop and department stores continue, as I said earlier, to be a viable channel and we continue to participate in that venue.

Your next question comes from the line of Erwan Rambourg – HSBC Erwan Rambourg – HSBC: I wanted to come back on gross margin because you mentioned that you had essentially three elements weighing deeper promotion in outlets, channel mix, and adopting more of the sweet spot price positioning. As you mentioned that gross margin should stay at around 70%, 72% in the next few quarters, but you haven’t yet rebalanced fully towards the sweet spots. Should we, does that imply that deeper promotion in outlets and channel mix will be less of a concern in the next few months.

Yes, I think that’s a good assumption. We’ll see that channel mix moderate and we’re optimistic that we’ll be able to also moderate as we move into FY10 the level of promotions in the factory channel and then the big helper of course we mentioned earlier, is the great work that our supply chain is doing to get our average costs down through lower cost materials and negotiating with our vendors, looking at everything, turning over all the rocks from shipping and logistics costs and squeezing a couple of pennies out here and there will of course be helpful at our volumes. Erwan Rambourg – HSBC: I had just a little question on diversification because I’m surprised you’ve added beyond a fragrance a lot of different products now to the fragrance and cosmetic arena, will there be a time for you to launch more broadly beyond your own network in that area.

We always think about opportunities to distribute our products through other channels and some day its very possible we will.

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 decline in inventory you saw from last quarter, how much of it was driven by the clearance of excess full priced merchandise at the factory stores. Are you still on track with that mid to high teens inventory in dollar terms at the end of this fiscal year.

You’re right on point with both of your questions. Yes, we were able in a meaningful way to re-purpose the full priced merchandise that we carried out of Q2 into the factory channel and we made a significant move in selling those units out through that division. I’ll also point out, the other metric as you know that we track is what percentage of what we sell at the register in the factory division is made for factory versus full price deletes and that metric did not move significantly year over year. We maintained a metric north of 60%, 62% I believe it was, 63% versus about a 65% last year so we’re still able to accomplish that, work through the inventory and yes, we’re feeling very good that we’re on track to deliver a year end inventory level that’s essentially flat in units. So we’re feeling good about how we’re working the inventory issue. Dana Telsey - Telsey Advisory Group: Very well managed quarter.

That will end the formal Q&A session, I’d now like to turn it over to Lew Frankfort, our CEO, for some closing remarks.

Well first I’ll thank you for participating with us and you can tell by our enthusiasm that we feel that we had a very good quarter and that it actually positions us well for this coming quarter that we’re in now as well as in the years ahead. I just wanted to leave you with a few thoughts, first, we do have a distinctive multi channel model with a very diversified consumer base and you need to appreciate that in having this model we have an opportunity to flex our marketing and promotional activities through our factory channel while maintaining the vibrancy of our full priced channel. The businesses work extremely well together and as most of you know we do not go on sale in our full price stores. Its one of our tenants, we look to give consumers an excellent value every day and that’s what we’re doing and I think next year they’re going to think the value is even better. And with that, have a good day and thank you very much.