Coach's stock retreated from gains experienced during the 2 nd Quarter as the Company's same store sales (SSS) in North America disappointed the market. While we pay attention to the trajectory of North American SSS, we are more interested in the Company's consolidated growth and profitability. We think Coach continues to have robust opportunity on both scores as they penetrate markets that are underserved by affordable luxury players and also expand the brand into new product categories in more established markets. We think the Company's peer-leading profitability will be maintained as it continues to own and operate the distribution fronts for nearly 90% of its revenue, a quarter of which we estimate is generated in markets where western luxury competitors have little or no presence, due to a lack of brand awareness and/or distribution capabilities.
From David Rolfe's Wedgewood Partners third quarter 2013 commentary.