Coach 2008 Annual Report Download - page 15

TABLE OF CONTENTS
•compliance with our Global Business Practices,
•disruptions or delays in shipments,
•loss or impairment of key manufacturing sites,
•product quality issues,
•political unrest, and
•natural disasters, acts of war or terrorism and other external factors over which we have no control.
While we have business continuity and contingency plans for our sourcing sites, significant disruption of manufacturing for any of the
above reasons could interrupt product supply and, if not remedied in a timely manner, could have an adverse impact on our business.
Our business is subject to increased costs due to excess inventories if we misjudge the demand for our products.
If Coach misjudges the market for its products it may be faced with significant excess inventories for some products and missed
opportunities for other products. In addition, because Coach places orders for products with its manufacturers before it receives wholesale
customers’ orders, it could experience higher excess inventories if wholesale customers order fewer products than anticipated.
Our operating results are subject to seasonal and quarterly fluctuations, which could adversely affect the market price of Coach
common stock.
Because Coach products are frequently given as gifts, Coach has historically realized, and expects to continue to realize, higher sales
and operating income in the second quarter of its fiscal year, which includes the holiday months of November and December. In addition,
fluctuations in sales and operating income in any fiscal quarter are affected by the timing of seasonal wholesale shipments and other events
affecting retail sales. However, over the past several years, we have achieved higher levels of growth in the non-holiday quarters, which has
reduced these seasonal fluctuations.
If we are unable to pay quarterly dividends at intended levels, our reputation and stock price may be harmed.
Our quarterly cash dividend is currently $0.075 per common share. The dividend program requires the use of a modest portion of our
cash flow. Our ability to pay dividends will depend on our ability to generate sufficient cash flows from operations in the future. This
ability may be subject to certain economic, financial, competitive and other factors that are beyond our control. Our Board of Directors may,
at its discretion, decrease the intended level of dividends or entirely discontinue the payment of dividends at any time. Any failure to pay
dividends after we have announced our intention to do so may negatively impact our reputation and investor confidence in us and negatively
impact our stock price.
Provisions in Coach’s charter and bylaws, Maryland law or its “poison pill” may delay or prevent an acquisition of Coach by a
third party.
Coach’s charter and bylaws and Maryland law contain provisions that could make it more difficult for a third party to acquire Coach
without the consent of Coach’s Board of Directors. Coach’s charter permits its Board of Directors, without stockholder approval, to amend
the charter to increase or decrease the aggregate number of shares of stock or the number of shares of stock of any class or series that Coach
has the authority to issue. In addition, Coach’s Board of Directors may classify or reclassify any unissued shares of common stock or
preferred stock and may set the preferences, rights and other terms of the classified or reclassified shares. Although Coach’s Board of
Directors has no intention to do so at the present time, it could establish a series of preferred stock that could have the effect of delaying,
deferring or preventing a transaction or a change in control that might involve a premium price for Coach’s common stock or otherwise be in
the best interest of Coach’s stockholders.
On May 3, 2001 Coach declared a “poison pill” dividend distribution of rights to buy additional common stock to the holder of each
outstanding share of Coach’s common stock. Subject to limited
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