With North American comps up and strong potential in China, executives at accessories specialist Coach could be forgiven for feeling disappointed at the lukewarm reaction of analysts and commentators to the company's second quarter results.

Christmas was kind to the company, which posted double-digit rises in sales and profit for the period, despite continuing reductions to wholesale shipments within the US.

But some analysts were discontented with a North America comps rise of only 3.2%, and voiced concern that a business returning to growth is still scaling back on its inventories.

The company points to the fact that this time last year, inventories had been swollen by, in CEO Lew Frankfort's words, "the Christmas that never came".

That made a drastic reduction a necessity as the company adjusted to the fabled "new normal" in domestic retailing.

Fair enough, but tight inventories leave little margin for error, and an unexpected surge in demand could yet see Coach miss out on further growth opportunities in North America as a result.

For the moment, China is the big opportunity for Coach, where current performance is outstripping even the company's own strong expectations.

The brand is clearly taking hold with Chinese consumers, whose 94% repurchase intent beats anything it has seen in the US or Japan - despite still very low levels of brand awareness.

That suggests enormous growth potential in a country scheduled to hit double-digit economic growth during 2010, so it's no wonder that Coach is accelerating its growth plans as a result.

Meanwhile, the company is doing what it can amid extremely difficult market conditions in Japan.

Frankfort calculates that the market has declined by 15-20% this year, with consumers buying less and at cheaper prices than before.

However, within this challenging picture, Coach has continued to drive market share up 15-20% in the last year.

The US market - stabilising, but still tough; Japan - very difficult, with limited growth opportunities…It's an environment which makes China all the more crucial to the company's immediate future.

Get it right and Coach could be building a strong platform for long-term international growth; get it wrong and those rather gloomy analysts may yet be proven correct.

Click here for Coach's second quarter results.