Coach 2014 Annual Report Download - page 15

TABLE OF CONTENTS
Our stock price may periodically fluctuate based on the accuracy of our earnings guidance or other forward-looking statements regarding our financial
performance.
Our business and long-range planning process is designed to maximize our long-term strength, growth, and profitability, and not to achieve an earnings
target in any particular fiscal quarter. We believe that this longer-term focus is in the best interests of the Company and our stockholders. At the same time,
however, we recognize that, from time to time, it may be helpful to provide investors with guidance as to our forecast of net sales, earnings per share and other
financial metrics or projections. While we generally expect to provide updates to our financial guidance when we report our results each fiscal quarter, we
assume no responsibility to update any of our forward-looking statements at such times or otherwise. In addition, any longer-term guidance that we provide is
based on goals that we believe, at the time guidance is given, are reasonably attainable for growth and performance over a number of years. However, such
long-range targets are more difficult to predict than our current quarter and fiscal year expectations. If, and when, we announce actual results that differ from
those that have been predicted by us, outside investment analysts, or others, our stock price could be adversely affected. Investors who rely on these
predictions when making investment decisions with respect to our securities do so at their own risk. We take no responsibility for any losses suffered as a
result of such changes in our stock price.
Failure to adequately protect our intellectual property and curb the sale of counterfeit merchandise could injure the brand and negatively affect sales.
We believe our trademarks, copyrights, patents, and other intellectual property rights are extremely important to our success and our competitive
position. We devote significant resources to the registration and protection of our trademarks and to anti-counterfeiting efforts worldwide. In spite of our
efforts, counterfeiting still occurs and if we are unsuccessful in challenging a third-party’s rights related to trademark, copyright, or patent this could
adversely affect our future sales, financial condition, and results of operations. We are aggressive in pursuing entities involved in the trafficking and sale of
counterfeit merchandise through legal action or other appropriate measures. We cannot guarantee that the actions we have taken to curb counterfeiting and
protect our intellectual property will be adequate to protect the brand and prevent counterfeiting in the future. Our trademark applications may fail to result
in registered trademarks or provide the scope of coverage sought. Furthermore, our efforts to enforce our intellectual property rights are often met with
defenses and counterclaims attacking the validity and enforceability of our intellectual property rights. Unplanned increases in legal fees and other costs
associated with defending our intellectual property rights could result in higher operating expenses. Finally, many countries’ laws do not protect intellectual
property rights to the same degree as U.S. laws.
Computer system disruption and cyber security threats, including a privacy or data security breach, could damage our relationships with our customers,
harm our reputation, expose us to litigation and adversely affect our business.
We depend on digital technologies for the successful operation of our business, including corporate email communications to and from employees,
customers and stores, the design, manufacture and distribution of our finished goods, digital marketing efforts, collection and retention of customer data,
employee information, the processing of credit card transactions, online e-commerce activities and our interaction with the public in the social media space.
The possibility of a cyber-attack on any one or all of these systems is a serious threat. As part of our business model, we collect, retain, and transmit
confidential information over public networks. In addition to our own databases, we use third party service providers to store, process and transmit this
information on our behalf. Although we contractually require these service providers to implement and use reasonable security measures, we cannot control
third parties and cannot guarantee that a security breach will not occur in the future either at their location or within their systems. We also store all designs,
goods specifications, projected sales and distribution plans for our finished products digitally. We have confidential security measures in place to protect
both our physical facilities and digital systems from attacks. Despite these efforts, however, we may be vulnerable to targeted or random security breaches,
acts of vandalism, computer viruses, misplaced or lost data, programming and/or human errors, or other similar events.
Consumer awareness and sensitivity to privacy breaches and cyber security threats is at an all-time high. Any misappropriation of confidential or
personally identifiable information gathered, stored or used by us, be it intentional or accidental, could have a material impact on the operation of our
business, including severely damaging our reputation and our relationships with our customers, employees and investors. We may also incur significant costs
implementing additional security measures to comply with state, federal and international laws governing the unauthorized disclosure of confidential
information as well as increased cyber security protection costs such as organizational changes, deploying additional personnel and protection technologies,
training employees, and engaging third party experts and consultants and lost revenues resulting from unauthorized use of proprietary information including
our intellectual property. Lastly, we could face increased litigation as a result of cyber security breaches.
In addition, we maintain e-commerce sites in the U.S., Canada, Japan and China and have plans for additional e-commerce sites in other parts of the
world. Additionally, Coach has informational websites in various countries, as described in Item I, "Business." Lastly, our e-commerce programs also include
an invitation-only Coach outlet flash sale site. Given the robust nature of our e-commerce presence and digital strategy, it is imperative that we and our e-
commerce partners maintain uninterrupted operation of our: (i) computer hardware, (ii) software systems, (ii) customer marketing databases, and (iv) ability to
email our
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