Internationally, shoppers are responding. Sales saw double-digit growth in Europe and mainland China—Coach’s second-largest market and an area that hasn’t been too hospitable for luxury lately as the economy slows. Sales were tempered by drops in tourism to France, as well as Hong Kong and Macau, but Luis was optimistic looking ahead, and expressed high hopes for high-roller Chinese shoppers both inside and outside the country.

“The long-term opportunity with the Chinese consumer is as present as ever,” he said. “Relevance on the mainland will mean relevance wherever the Chinese consumer chooses to shop globally.”

In North America, where Coach brings in the bulk of its revenue, investors have been waiting to see if sales at stores that have been open at least a year will return to positive growth, a good indication that shoppers are coming back. While Coach said they were flat this past quarter, and that growth would finally return next quarter, that isn’t the whole story. After warm weather in January dented sales, Coach would need positive comparable-store sales afterward to break even for the quarter. One astute analyst asked Luis if that was the case. ”You can safely assume we had positive comps in February and March,” he replied.

The upward trajectory is good news for Coach, which had sales of about $1 billion for the quarter, but it remains to be seen whether it can continue on this course. The company is restructuring its management and looking for other opportunities. Luis thinks menswear, for instance, could be a $1 billion business by itself.

A model presents a creation from the Coach catwalk show at the "London Collections: Men" Autumn/Winter 16 in London, Britain January 9, 2016. REUTERS/Neil Hall - RTX21NJ1
On the right track.
Image: Reuters/Neil Hall

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