For the first quarter of fiscal 2007, Coach’s comparable store sales for full-price stores increased by 16 percent relative to the same period in 2006. Coach factory stores achieved year-over-year comparable store sales growth of27.1 percent. The company’s indirect sales improved by 11 percent between the first quarter of 2006 and the first quarter of fiscal 2007. Operating income during the first quarter 2007 increased by 36 percent, while operating margins improved by 340 basis points to reach 35.7 percent. Lew Frankfort attributed the company’s continuing sales and profit growth to 19 new store openings in the United States; new handbag collections such as Coach Signature Stripe, Chelsea, Hamptons silhouettes, and Legacy lifestyle; and the increased assortment of gifts under $100 geared to price-sensitive holiday shoppers. The company’s stock provided nearly a 35 percent return to shareholders during the 2006 calendar year. The challenge for Lew Frankfort and other key Coach executives was to defend against competitive attacks from French and Italian luxury goods makers and sustain the impressive growth rate the company had achieved since its 2000 IPO