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UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-Q

For the Quarterly Period Ended September 27, 2003

or

Commission file number: 1-16153

COACH, INC.

516 West 34^th Street, New York, NY 10001
(Address of principal executive offices); (Zip Code)

(212) 594-1850
(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes [X]  No  [  ]

On October 31, 2003, the Registrant had 185,572,862 outstanding shares of common stock, which is the Registrant’s only class of common stock.

The document contains 27 pages excluding exhibits.

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COACH, INC.

TABLE OF CONTENTS FORM 10-Q

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SPECIAL NOTE ON FORWARD-LOOKING INFORMATION

This Form 10-Q contains certain “forward-looking statements”, based on current expectations, that involve risks and uncertainties that could cause our actual results to differ materially from management’s current expectations. These forward-looking statements can be identified by the use of forward-looking terminology such as “may,” “will”, “should,” “expect,” “intend”, “estimate”, or “continue”, or the negative thereof or comparable terminology. Future results will vary from historical results and historical growth is not indicative of future trends, which will depend upon a number of factors, including but not limited to: (i) the successful implementation of our growth strategies and initiatives, including our store expansion and renovation program; (ii) the effect of existing and new competition in the marketplace; (iii) our ability to successfully anticipate consumer preferences for accessories and fashion trends; (iv) our ability to control costs; (v) the effect of seasonal and quarterly fluctuations in our sales on our operating results; (vi) our exposure to international risks, including currency fluctuations; (vii) changes in economic or political conditions in the markets where we sell or source our products; (viii) our ability to protect against infringement of our trademarks and other proprietary rights; and such other risk factors as set forth in the Company’s Annual Report on Form 10-K for the fiscal year ended June 28, 2003. Coach, Inc. assumes no obligation to update or revise any such forward-looking statements, which speak only as of their date, even if experience or future events or changes make it clear that any projected financial or operating results will not be realized.

WHERE YOU CAN FIND MORE INFORMATION

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

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

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PART I

ITEM 1. Financial Statements

COACH, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS

See accompanying Notes to Condensed Consolidated Financial Statements.

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COACH, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)

See accompanying Notes to Condensed Consolidated Financial Statements.

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COACH, INC.
CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY
(amounts in thousands)

[Additional columns below]

[Continued from above table, first column(s) repeated]

			Accumulated												Shares
			Other												of
			Comprehensive				Unearned				Comprehensive				Common
			Income (loss)				Compensation				Income (loss)				Stock
Balances at June 29, 2002			$	215			$	(1,666	)							178,908
	Net income			—				—			$	146,628
	Shares issued for stock options and employee benefit plans			—				—								7,900
	Tax benefit from exercise of stock options			—				—
	Repurchase of common stock			—				—								(3,858	)
	Grant of restricted stock awards			—				(5,550	)
	Amortization of restricted stock awards			—				1,568								59
	Unrealized gain on cash flow hedging derivatives, net			168								168
	Translation adjustments			(348	)			—				(348	)
	Minimum pension liability			(1,394	)			—				(1,394	)
	Comprehensive income										$	145,054
Balances at June 28, 2003				(1,359	)			(5,648	)							183,009
	Net income			—				—			$	42,329
	Shares issued for stock options and employee benefit plans			—				—								1,345
	Tax benefit from exercise of stock options			—				—
	Grant of restricted stock awards			—				(6,904	)
	Amortization of restricted stock awards			—				1,163								—
	Unrealized (loss) on cash flow hedging derivatives, net			(745	)							(745	)
	Translation adjustments			3,181				—				3,181
	Comprehensive income										$	44,765
Balances at September 27, 2003 (unaudited)			$	1,077			$	(11,389	)							184,354

See accompanying Notes to Condensed Consolidated Financial Statements.

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COACH, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)

See accompanying Notes to Condensed Consolidated Financial Statements.

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COACH, INC.

Notes to Condensed Consolidated Financial Statements
Quarters Ended September 27, 2003 and September 28, 2002
(dollars and shares in thousands, except per share data)
(unaudited)

1. Basis of Presentation and Organization

     The accompanying unaudited condensed consolidated financial statements include the accounts of Coach, Inc. (“Coach” or the “Company”) and its subsidiaries. The condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosure normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted from this report as is permitted by such rules and regulations. However, the Company believes that the disclosures are adequate to make the information presented not misleading. The results of operations for the quarter ended September 27, 2003 are not necessarily indicative of results to be expected for the entire fiscal year, ending July 3, 2004 (“fiscal 2004”).

     The condensed consolidated financial statements include the accounts of the Company, all 100% owned subsidiaries and Coach Japan, Inc. All significant intercompany transactions and balances within the Company are eliminated in consolidation.

     In the opinion of management, the accompanying unaudited condensed consolidated financial statements contain all normal and recurring adjustments necessary to present fairly the consolidated financial condition, results of operations, and changes in cash flows of the Company for the interim periods presented. This report should be read in conjunction with the audited consolidated financial statements and notes thereto, included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission for the year ended June 28, 2003 (“fiscal 2003”).

2. Stock-Based Compensation

     Under Accounting Principles Board Opinion No. 25, “Accounting for Stock Issued to Employees” no compensation cost is recognized for stock options and replacement stock options under the stock-based compensation plans and shares purchased under the employee stock purchase plan.

     Had compensation cost for the grants for stock-based compensation been determined consistent with Statement of Financial Accounting Standards (“SFAS”) No. 123, “Accounting for Stock-Based Compensation”, net income and net income per share, basic and diluted, for the quarters ended September 27, 2003 and September 28, 2002 would have been as follows:

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COACH, INC.

Notes to Condensed Consolidated Financial Statements – (Continued)
Quarters Ended September 27, 2003 and September 28, 2002
(dollars and shares in thousands, except per share data)
(unaudited)

3. Stock Split

     On August 7, 2003, Coach’s Board of Directors authorized a two-for-one split of the Company’s common stock, to be effected in the form of a special dividend of one share of the Company’s common stock for each share outstanding. The additional shares issued as a result of the stock split were distributed on October 1, 2003 to stockholders of record on September 17, 2003. The effect of the stock split on earnings per share was retroactively applied to all periods presented.

4. Goodwill and Other Intangible Assets

     The Company adopted SFAS No. 142, “Goodwill and Other Intangible Assets” in the first quarter of the fiscal year ended June 29, 2002 (“fiscal 2002”). Under SFAS No. 142, goodwill and intangible assets with indefinite lives, such as the Company’s trademarks, are no longer amortized but are subject to annual impairment tests or more frequently if changes in circumstances indicate that the asset might be impaired.

     The carrying value of goodwill and other indefinite life intangible assets as of September 27, 2003 and June 28, 2003 was comprised of the following:

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COACH, INC.

Notes to Condensed Consolidated Financial Statements – (Continued)
Quarters Ended September 27, 2003 and September 28, 2002
(dollars and shares in thousands, except per share data)
(unaudited)

     The carrying value of goodwill as of September 27, 2003 and June 28, 2003, by operating segment, is as follows:

4. Debt

     At September 27, 2003, the LIBOR margin on our credit facility (the “Fleet facility”) was 75 basis points. Under this revolving credit facility, Coach pays a commitment fee of 20 to 35 basis points based on any unused amounts. At September 27, 2003, the commitment fee was 20 basis points. This credit facility may be prepaid without penalty or premium.

     Subsequent to the end of the first quarter of fiscal 2004, the Company renewed the Fleet facility, extending the facility expiration to October 16, 2006. The terms of the renewal are substantially the same as the original facility.

     During the first quarters of fiscal 2004 and fiscal 2003 there were no borrowings under the Fleet facility. As of September 27, 2003, there were no outstanding borrowings under the Fleet facility. This facility remains available for seasonal working capital requirements or general corporate purposes.

     The Fleet facility contains various covenants and customary events of default. The Company has been in compliance with all covenants since the inception of the Fleet facility.

     Coach Japan has available credit facilities with several Japanese financial institutions. These facilities contain various covenants and customary events of default. Coach Japan has been in compliance with all covenants since the inception of the facilities. Coach, Inc. is not a guarantor on any of these facilities.

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COACH, INC.

Notes to Condensed Consolidated Financial Statements – (Continued)
Quarters Ended September 27, 2003 and September 28, 2002
(dollars and shares in thousands, except per share data)
(unaudited)

     During the first quarters of fiscal 2004 and fiscal 2003 the peak borrowings under the Japanese credit facilities were $31,020 and $38,606, respectively. As of September 27, 2003 and June 28, 2003, the outstanding borrowings under the Japanese facilities were $28,233 and $26,471, respectively.

5. Earnings Per Share

     Basic net income per share was calculated by dividing net income by the weighted-average number of shares outstanding during the period. Diluted net income per share was calculated similarly but includes potential dilution from the exercise of stock options and stock awards.

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

6. Segment Information

     The Company operates its business in two reportable segments: Direct-to-Consumer and Indirect. The Company’s reportable segments represent channels of distribution that offer similar merchandise, service and marketing strategies. Sales of Coach products through Company-operated retail and factory stores, the Coach catalog and the Internet constitute the Direct-to-Consumer segment. Indirect refers to sales of Coach products to other retailers and includes sales through its joint venture in Japan. In deciding how to allocate resources and assess performance, Coach’s executive officers regularly evaluate the sales and operating income of these segments. Operating income is the gross margin of the segment less direct

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COACH, INC.

Notes to Condensed Consolidated Financial Statements – (Continued)
Quarters Ended September 27, 2003 and September 28, 2002
(dollars and shares in thousands, except per share data)
(unaudited)

expenses of the segment. Unallocated corporate expenses include production variances, general marketing, administration and information systems, distribution and customer service expenses.

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COACH, INC.

Notes to Condensed Consolidated Financial Statements – (Continued)
Quarters Ended September 27, 2003 and September 28, 2002
(dollars and shares in thousands, except per share data)
(unaudited)

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

Geographic Area Information

     As of September 27, 2003, Coach operated 162 retail stores and 77 factory stores in North America and operated four manufacturing, distribution, product development and quality control locations in the United States, Italy and China. Geographic revenue information is based on the location of the end customer. Geographic long-lived asset information is based on the physical location of the assets at the end of each period. Indirectly, through Coach Japan, Coach operates 94 retail and department store locations in Japan.