Good afternoon, ladies and gentlemen, and thank you for standing by. Welcome to the Deckers Outdoor Corporation First Quarter Fiscal 2012 Earnings Conference Call. [Operator Instructions] I would like to remind everyone that this conference is being recorded. Before we begin, I would also like to remind everyone of the company's Safe Harbor policy. Please note that certain statements made on this call regarding the company's expectations, beliefs and views about its future financial performance, brand strategies and cost structure are forward-looking statements within the meaning of the Federal securities law. These forward-looking statements are intended to qualify for the Safe Harbor from liability established by the Private Securities Litigation Reform Act of 1995. These statements relate to the company's anticipated revenues, expenses, earnings, gross margin, capital expenditures, brand strategies and cost structure, as well as the outlook for the company's markets and the demand for its products. The forward-looking statements made on this call are based on currently available information, and because its business is subject to a number of risks and uncertainties, some of which may be beyond its control, actual operating results in the future may differ materially from the future financial performance expected at the current time. Deckers has explained some of these risks and uncertainties in its earnings press release and in its SEC filings, including the Risk Factors section of its Annual Report from Form 10-K and its other documents filed with the SEC. Listeners are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date hereof. The company undertakes no obligation to publicly release or update the results of any revisions to forward-looking statements. I would now like to turn the conference over to the President, Chief Executive Officer and Chair of the Board of Directors, Angel Martinez. Please go ahead, sir.

Well, thank you to everyone for joining us today. With me on the call are Chief Operating Officer, Zohar Ziv; and Chief Financial Officer, Tom George. Our first quarter performance reflects the evolution of our business model and the external factors that we believe have pressured both sales growth and margins, particularly the differences in weather and sheepskin prices versus the same period a year ago. The Sanuk brand, the newest addition to our portfolio, started the year off very well. Strong sell-in of the spring line has been followed by equally strong sell-through at retail in March and April. At the same time, wholesale orders for the UGG brand spring styles were up meaningfully versus a year ago as was sell-through in our domestic stores. Sales of the Teva brand expanded close -- Teva brand expanded closed-toe offering also delivered solid gains. Unfortunately, very mild temperatures, along with a tough comparison created by the cold and snowy conditions across much of the U.S. at the same time last year, had a noticeable impact on boot sales during the first quarter. Despite these challenging conditions, we believe that we've done a good job managing inventory and adjusting our purchase orders. We expect to enter the fall selling season in good shape with relatively clean channels. In terms of our bottom line performance, earnings were down approximately 59% versus a year ago, which is primarily attributable to the increase in sheepskin prices, together with the increase in operating expense from our growing retail organization. As we have previously indicated, sheepskin prices are up 40% in 2012 from 2011. Zohar will speak more specifically about the outlook for sheepskin prices in a moment, but they do appear to be coming down from their historic highs, which should provide relief beginning in 2013.…

Thanks, Angel. Regarding sheepskin prices, in recent discussions with our suppliers, we continue to hear that prices are coming down from their historic highs. However, we will not know to what extent our full year 2013 product costs will look like compared to 2012 until we lock in prices for the fall 2013 line, which will be in October around the time we report our third quarter results. At this point, we think it would be helpful to briefly discuss the dynamics of our sheepskin supply chain and outline what has been impacting the price. To start, sheepskin is a byproduct of the meat industry, and in addition, there are different grades of sheepskin. We primarily use premium sheepskin sourced from Australia in the production of our Classic Collection with a modest amount coming from the U.K. and U.S. Unfortunately, not all sheep are created equal. The quality of skins from most other countries does not meet our high standards and therefore cannot be utilized. There are a number of things that impact the price of sheepskin. We believe a big reason for the recent spike has been increased demand for this limited commodity, something to which we have certainly contributed. A decline in herd sizes has also driven up the price, as worldwide consumption of lamb has been on the decline for many years. Droughts in Australia in recent years have also been a factor in herd decline, and the price of wool is also part of the story. When that commodity appreciates, farmers are more likely to keep their sheep in order to harvest the wool. Finally, changes in the strength of the Australian dollar versus the U.S. dollar also impact our cost. As I mentioned, a moment ago, sheepskin prices have started to decline. We think many…

Thanks, Zohar. Before I get into that, I wanted to clarify a typo in the press release. Under second quarter outlook, our sales earnings margin guidance is, in that press release, are correct, but the SG&A rate is incorrect. The SG&A rate should be 63% versus the 37% in the press release. And regarding the rest of my discussion today, the release contains a good amount of detail about our first quarter sales and earnings, including sales by brand, channel and geography. Therefore, I'm going to limit my discussion primarily to gross margins, operating expenses, the balance sheet and guidance, as well as some additional commentary on our retail division. Regarding gross margin, for the first quarter, it was 46% compared to 50% in the first quarter last year. Of the 400 basis point decline, approximately 300 basis points are attributable to an increase in product costs, while higher closeout sales, markdowns, discounts and direct-to-consumer mix contributed approximately 200 basis points to the decline. This was partially offset by the contribution of Sanuk brand and increased pricing. Increased closeouts relative to the prior year were primarily attributable to discontinued spring and fall styles. As to the shortfall versus our guidance, this is mostly due to lower margins on the Teva brand and the other brands, driven by increased closeouts, as well as increased closeouts -- increased UGG brand closeouts. Sanuk brand margins were ahead of expectations. Total SG&A expense for the quarter was $101.4 million or 41.2% of net sales compared to $74.3 million or 36.3% of net sales a year ago. SG&A increased primarily due to the additional expenses of owning and operating the Sanuk brand, including $8.7 million of operating expenses, which includes $3.1 million in amortization of intangible assets and purchase price accounting tied to the Sanuk…

Thanks, Tom. Well, in light of the many challenges we faced, I'm pleased with how our teams executed during the first quarter. We're managing this business for the long term, and I'm very confident that the growth strategies we've developed for our brand portfolio are intact and will continue to deliver consistent sales and earnings improvement over the years ahead. Operator, we're now ready to open the call up for questions.

[Operator Instructions] Your first question will come from Bob Drbul with Barclays Capital.

Just the first question I have, Angel, one of the comments that you made around the UGG brand was that you thought that the inventory levels, I think, both at retail and in your business, would be clean by fall. Can you just give us -- elaborate a little bit more in terms of what gives you the confidence around that statement and sort of what you're seeing that we might not be seeing?

Well, the bulk of the product is -- product that, as Tom said, has been committed to for fall. It is in-line inventory. Our sell-through of that product was impacted most by cold weather, the cold-weather product, some Classic product. Those products don't see seasonal changes in fashion. Those products are consistent year-on-year and we've sold all those products and adjusted our incoming orders accordingly.

Okay, all right. That helps. And then, I guess, like sort of bigger picture a little bit, when you think about in over the last few months, what would you say would be the biggest positive developments or negative developments that you've seen sort of as you've worked through the current situation?

Well, the biggest negative is weather, obviously. No one expected that we would take such a swing from 2010 winter to 2011 winter. The 2 things were at opposite extremes. So if you had retailers buying to a sell-through level in 2010 when a -- way until spring, it was still cold and snowing in some places, all the way to the opposite of that. So that's a real swing. The positive has been the way the brand has held its own. Particularly as you look at the sell-through of our spring line, the spring product has been checking extremely well, the men's business has been performing well, the kids business has been performing well. So the only places that we've struggled is really where there's a real seasonal impact to the weather. And if you look at overall, our sales were up 5% without Sanuk, so that's a really good performance company-wide in this environment.

Okay. And then, I guess, the last question I have is, can you just elaborate a little bit more on your own stores in Asia, in terms of their performance there?

Well, those stores performed well. Weather was an impact in Asia. The same way it was in Europe and the U.S. But generally speaking, our stores in Asia performed quite well. The brand continues to evolve very nicely. The consumer environment for this kind of product continues to develop and we're quite bullish on, as you can see from the acquisition of our -- the JV, that we feel that there's significant growth opportunity in Asia.

From ISI Group, we'll go to Omar Saad.

Could you give us a little bit more clarity in the puts and takes in the gross margin shortfall? It sounded like it was primarily due to higher-than-expected closeouts, Teva, other brands and UGG. What was the breakdown? Was it mostly Teva closeouts or UGG closeouts or other brand closeouts? How do we think about that gross margin piece there in the quarter?

Yes, it was sort of split fairly equally between Teva and the other brands being down versus UGG. So the 200 basis points decline, it's fairly, fairly evenly. One subset of the UGG gross margin number is that we had a negative impact on margin due to the channel mix. Our eCommerce sales, to a lesser extent, our retail sales, didn't perform relative to expectations, so that had a negative impact on margin as well.

And did that mostly come towards the end of the quarter? So if you think about when you gave your guidance with 5 or 6 weeks left in the quarter, was there a decision made towards the end of the quarter saying, hey, we need to close out some of this product? Is that a fair statement?

It sort of evolves over the course of the quarter, right? You look at your inventory levels, you see sort of, as a matter of standard practice, you're in discussions relative to closeouts over the course of the quarter and many of those discussions conclude towards the back half, the third month of the quarter. So this is sort of how that progresses. And we felt given our inventory levels and the manner we were going to close out some of that, it was non-Classics product for the most part. We felt it was appropriate to go ahead and make that decision.

And then, Angel, could you talk about the order book a little bit? It sounds like despite what you described correctly as a really warm winter against last year's a really cold winter, the order book being pretty good, what gives you -- give us some -- can you give us some detail behind what you're hearing from retailers? What gives you confidence in that full year revenue number that you're putting out there?

Well, we're pretty happy with the order book as it stands now. We're just about done with the pre-book, maybe 95% of the way there. All indications are very good and particularly new product. Especially men's, kids, some of the new fashion product has been very well received. So it's an evolving brand. We can see the pattern continuing, less dependence on what we call a traditional Classic product and more evolution of that product. I think we've done a really good job of mitigating the sheepskin impact with the diversity of design and that should allow us to make sure that we're operating at the right price points. So retailers seem to be very satisfied with the price points that we're putting out there for the fashion product. So I'm feeling pretty bullish on the response that we've had to the fall sell-in at this point.

From Jefferies, we'll go to Taposh Bari. Taposh Bari - Jefferies & Company, Inc., Research Division: Can you -- I just wanted to follow up on the fall-winter backlog, you said it was up 15% as of last quarter. Can you tell us what that number is as it stands today?

We normally, in terms of reporting backlog, at the end of the first quarter, there's going to be still, obviously, some spring product in there. It's going to have fall product in there as well. So it's a little bit of a mixed bag. It has Sanuk this year, it didn't have Sanuk last year. So we're sort of going to stick to our policy of reporting total backlog just on an annual basis. Taposh Bari - Jefferies & Company, Inc., Research Division: Okay. The domestic comp, I appreciate the disclosure there, so up high single digits in the first quarter. Can you give us a sense, so your overall comp was flat in the first quarter. It was up 1% in the fourth quarter. Can you give us a sense of what that domestic business looked like in the fourth quarter so we can get some context around what high single digits means?

Taposh, are you referring to the guidance for the total year 2012? Taposh Bari - Jefferies & Company, Inc., Research Division: No, Tom. I was just curious to know if you're willing to disclose what the domestic same-store sales growth was in the fourth quarter of 2011.

No. We're already starting to expand some of our disclosures relative to retail, but we really don't want to get back into the prior quarter and get into the detailed prior quarters right now. Taposh Bari - Jefferies & Company, Inc., Research Division: Okay, that's fair. And then just a final question I had was on the second quarter guidance. So if I recall, last year, the second quarter had a pretty massive, as you went vertical or took over your distributors internationally, there was a pretty massive shift out of 2Q into 3Q and 4Q. So can you just give us a sense of why sales would only be up 8% in the second quarter? And then also, on the second quarter guidance, why -- it seems like your modeling gross margins up, just trying to get a sense of what's driving that? I'm assuming it's probably a lack of sheepskin in the product mix, but anything else to read into that?

In the second quarter, we've -- consistent with the total year, we've got some pressures from our European business, and included in that it's pressures from our European distributor business. So those expectations now in the second quarter are lower than originally expected. So that's having some impact on the growth. And on the margin, it is approximately the same as the prior year. But there is less of an impact on the -- from the sheepskin on cost increases in the second quarter than there is in the back half of the year. And there's a little bit of positive impact from Sanuk as well in the second quarter. Taposh Bari - Jefferies & Company, Inc., Research Division: Okay. And I just wanted to ask one final question, kind of holistically as it relates to guidance. So looking back to the fourth quarter, you gave guidance very late in the first quarter, and it seems like, I guess, following up on Omar's question, it sounds like there were some closeouts that were kind of unexpected as of the time of guidance, as we look out now, a lot of this noise is coming from weather presumably. But as we look out now into 2Q through 4Q, where do you see the risk? Is it all kind of macro at this point, but if you could just elaborate on what can go wrong, what can go right from here on out versus your guidance?

Yes, I think it is primarily macro. As Tom mentioned, so we're facing some headwinds in Europe, the U.K. being our biggest market and that market is struggling from a consumer perspective. So we're going to battle very hard in that market. We think that we've gotten ahead of the issues that weather created in the last, this past quarter. We think inventories, as we said earlier, are going to be in fine shape by the end of the year. And we're getting great response to the fall assortment. So it's just managing the business effectively and I think we've proven that we can do that. It's when you get thrown these nature's curveballs that things have a way of going south on you.

And next, we'll go to Jeff Klinefelter with Piper Jaffray.

Just a couple of questions. Angel, in terms of the international markets, can you give us a sense for, on a wholesale equivalent basis, sort of where the U.K. versus Benelux and the rest of the Western European exposures kind of tracking, or tracked in Q4 on a year-over-year basis, or Q1 rather, on a year-over-year basis? And what are your assumptions for that sort of trend for the balance of the year?

Well, as I said, the macro environment we can't do much about. So we are looking at, as I think was mentioned in the -- as I mentioned in the script, the Queen's Jubilee and the Olympics should provide a boost to the U.K. economy. And getting consumers into more of a consumption mode, as well as an influx of a million tourists or more, so that should help. Benelux, as compared to the U.K., has been very good at managing the development of the brand. So we see that when the brand was evolved truly across multiple categories of product versus it being more one-dimensional as the U.K. brand evolved, through the recent distributor relationship, that brand has a stronger foundation and can move in a variety of different directions, depending on weather, depending on fashion. The brand is more flexible. The brand is more pliable. So we're aggressively moving toward the evolution of the brand in the U.K. We have rightsized the distribution matrix. And in those retailers that are continuing to do business with us, the goal is to expand the assortment, very consistent with the way you've seen us do that here in the United States, so that we're not as one-dimensional a brand as we've been and so that cold weather, if and when it does or does not occur, is not the primary factor in whether the brand performs at the expected rate. So it's really a function of brand evolution and focused category development in both of those markets.

Okay. So would you view it as a -- for a second half year-over-year, is it going to be sort of a neutral environment, look for more of a consolidation of distributions so that it's a decline year-over-year? Just getting a sense for sort of how you're planning that international business year-over-year.

I see it as a neutral environment with the positive -- with a potential upside based on the Olympics and the Queen's Jubilee. And if we get an improvement in macro environment influences, we're going to benefit even more.

Okay, that's helpful. And then in terms of your kind of overall fall bookings, your second half bookings, and if I missed this, I apologize, but what is sort of the ASP, average selling price, in the fall book year-over-year at this point?

It will be up probably slightly, and that's primarily due to the price increases that we've taken on product that's primarily sheepskin. So you'll see probably some higher ASPs. We have tried to counterbalance that with, as I mentioned, earlier, some evolution of non-sheepskin and sheepskin that's engineered to be less of the total percentage of the upper on some of the fashion product. But generally speaking, my guess is it'll be up a few ticks.

Okay, up maybe slightly, but not up to the rate it's been up the last couple of years. Is that fair?

I think it's probably fair, yes.

Okay. And just lastly, in terms of spring, you commented about the strength of the spring style sell-throughs versus kind of that boot carryover business. Can you give us a sense for what maybe even this year or maybe a more normalized year, what would the split within the UGG brand be of carryover sales versus new spring product in Q1?

Well, that's been evolving rapidly, as you know, in the last few years. Let me -- I'm going to take a guess at it, 40% would be spring new product -- I mean 60% will be spring new product, 40% would be carryover, just a rough ballpark guess. And I think as time goes on, you're going to see that move more toward spring-only assortment versus carryover styles.

And next, we'll go to Diana Katz with Lazard Capital Markets.

My first question is, are you seeing any price resistance on the new -- on the Classic Tall and Triple Bailey that have already hit the stores now?

No, we're really not, not seeing any indication and we've been doing some consumer research on that front as well. So in addition to any input we're getting from retailers. So no, we've not seen any price resistance from consumers.

Okay. And then, Angel, you mentioned that for your pre-book, there's less dependence on traditional Classic product. So have you seen a growth in the percentage contribution of fashion versus core product for the coming season?

Yes, we have. The fashion line has continued to evolve. For many years now, at least the last 4 years, we've been consciously keeping our Classic assortment pretty flat as a percentage of total because that forces us to develop more aggressively some of the fashion products, some of the product that is not as sheepskin-dependent, especially last year when we saw that there'd be a significant potential impact in sheepskin pricing. As you know, last year was 30% increase and followed by 40%. So we've been very aggressive about the evolution of the fashion component of our -- we call it fashion. It's really non-Classic styles for fall. Still some sheepskin, but how we use the sheepskin varies, and that continues to develop. And as I said, the fall '12 assortment for fashion has been very well received.

Okay. And then, Tom, as we dig through the model, what's your assumption for retail comps this year, the blended rate as well as the domestic versus international comp? And where do you think eCommerce will shake out this year?

The comp assumption, really, for the total year is still really unchanged. It's sort of the mid- to highest single-digit comp for the total year and we really didn't give breakout of domestic versus international. And on the eCommerce side of the business, we're still pretty consistent with our expectations there. In spite of the first quarter, the total year announced a global number. We still think our earlier guidance of roughly 20% to 21% still holds for that.

Okay. And then, so the takedown number show is purely -- on the UGG side, it was purely on the international wholesale side?

It's not just international wholesale, there's also the international distributor business, and that had a big impact on the second quarter given the distributor sales are a second, third quarter item. So it's both distributor and wholesale, and it was international and it was Europe.

Okay. So I guess what gives you the confidence in your comp, in your retail comp assumptions for the back half that there'll be this acceleration?

Some of the similar things that we've talked about before in the U.K., we've got the Jubilee, as well as the Olympics. In Asia, we've got some more marketing investment there, and some more management infrastructure investment to drive those sales. We've got a broader product assortment that early indications are it's going to do very, very well. We've mentioned earlier about the new IT system to be able to track our inventory levels. We feel really good about that. In Japan, they had a tough comparison with the earthquake, the tsunami and the nuclear meltdown. And we feel really -- still really strong where we're headed with our retail business and where that's going to end up for the year.

And next, we'll hear from Mitch Kummetz with Robert W. Baird. Mitchel J. Kummetz - Robert W. Baird & Co. Incorporated, Research Division: So first, I know you guys don't want to give backlog as of end of Q1; it's not your policy. But I mean, in light of the commentary that you're encouraged by the fall orders, and that, that order book is pretty close to complete. I mean, can you say whether or not UGG fall orders, pre-book orders are up, are they down, are they flat? Can you give us just a general sense as to how that order book has come in?

All I can say or will say is, we are satisfied with the way the order book's coming in, meeting our expectations. So that's all I can say. Mitchel J. Kummetz - Robert W. Baird & Co. Incorporated, Research Division: Okay. I guess it's just a little tough because we don't really know what your expectations were, so I can appreciate if...

I don't go into a season with negative expectations. So just as a general rule of thumb. Mitchel J. Kummetz - Robert W. Baird & Co. Incorporated, Research Division: Okay, that's helpful then. And then, Tom, I know -- so you've updated your assumptions, your sales assumptions by brand. And then kind of in response to Diana's question, you talked about it by channel. Could you just tell us kind of what you're thinking by region now? I think, previously, you were talking about international up over 20%, I think, growing to 33% of total sales. I think you were saying that domestic up low double digits. Are those -- I think it sounds like the international piece has come down, right?

[indiscernible] piece has come down and the domestic piece has come up some, relative to the prior guidance. Mitchel J. Kummetz - Robert W. Baird & Co. Incorporated, Research Division: Okay. So does that mean low teens, mid-teens on the domestic and mid-teens on the international? Can you give us maybe some more specifics on that?

On the international in total, it's more of a mid-teens now versus the 20% before. And on the domestic side, domestic business should be up sort of in the mid-teens as well, a little bit higher rate than the total international business. Mitchel J. Kummetz - Robert W. Baird & Co. Incorporated, Research Division: Okay, that's helpful. And then on the inventory, Tom, when you were running through the buckets on the $90 million increase in UGG, I think you said $40 million was a combination of higher costs and then carryover. I was hoping you could break that out. How much of the $40 million is cost increases versus carryover?

Look at that $40 million, whereas at the end of the year, it was more of an equal split. Now as we're bringing in more of the fall '12 inventory at a higher cost, more of that $40 million now is related to product cost increases versus the carryover now. Mitchel J. Kummetz - Robert W. Baird & Co. Incorporated, Research Division: Okay, that's helpful. And then maybe just as a last question, as you guys are thinking about the back half of the year, you're going up against, I guess, what I would consider to be a relatively easy Q4 comparison, where last year, reorders were weak, cancellations were up, DTC performance was hurt by weather. Kind of what's assumed in your guidance at this point for Q4 given that easy comparison? And how are you planning to manage the inventory to maybe take advantage of some opportunities in case the weather is more cooperative and the reorders come in, account cancellations come down and the comps in your own stores accelerate off of last year?

In terms of -- relative to the back half of the year, there's really, in terms of our guidance, we really haven't seen -- assumed much of a change at all in the current weather. That being said, at the same time, we're managing our inventory to be able to have some opportunity to be able to chase some business in season, and we feel pretty pleased about that. And obviously, if we get better retail comps our eCommerce business picks up, we'll obviously get a mix through reallocated that fall inventory levels to those 2 channels. Mitchel J. Kummetz - Robert W. Baird & Co. Incorporated, Research Division: Okay. But again, to be clear, in terms of your sales and earnings guidance, you're not assuming some big uptick in Q4 on normal -- on more normal weather. Is that fair?

Well, I think I can say relative to third and fourth quarter, I mean, comparing those 2 quarters, there's more growth in the fourth quarter assumed than there is in the third quarter because there's a lot more retail stores in place then. That eCommerce content there in the fourth quarter. The third quarter got hurt by some of the European distributor business, so as we lowered those expectations.

And next, we'll go to Howard Tubin with RBC Capital Markets.

Looking at the direct distribution model now in the U.K. Other than kind of the macro issues and the weather, is that -- could you say that's on track, it's delivering kind of all the potential and upside and doing everything you wanted from going direct in the U.K.?

Yes, I think the most important thing in going direct is that we have control over the way the brand evolves, not only from the product perspective and the placement of the different categories of product, but also the way in which it's distributed, where you find our product, the mix of shop-in-shop, the mix of our own stores, the shop-in-shop, as well as within key retailers, a much better presentation of the assortment. In addition to that, the marketing. I mean, it's really a brand-building exercise that we've launched in the U.K. and it's working. Keep in mind that we have shed some distribution. And so we're shedding distribution where we didn't feel it was taking the brand where we needed be in the long run and making up for that by getting increased spread and assortment where we do need to be, including our own stores. So it's really the only way in which we can assure the long-term success of the brand is to really take control of where it's placed, how it looks and how it's marketed to consumers.

Next, we'll hear from Chris Svezia with Susquehanna Financial Group.

I guess, first, I just want to clarify, just on the Teva brand, can you just maybe walk through why the softness in Q1 at U.S. wholesale, just assuming the weather and initial sell-in, et cetera, would've been better? I'm just curious why -- remind me, why was it so soft.

Yes, Chris, I mean in the United States, Teva, good amount of its distribution is through channels that also carries cold-weather product. With the unseasonably warm weather, those retailers were carrying a bigger inventory investment than originally thought of. And as a result of that, they had less money available to have reorders in the first quarter. So that's primarily what -- how weather impacted the first quarter Teva.

Okay. I see. I got you. And then just on when you were looking at the domestic, when you look at domestic revenues for the year and it seemed like an answer to your prior question, a slight uptick in your thought process sort of in a mid-teens sort of growth rate from the sort of 11%, 12% growth previously. What's the change? Where is that it coming from? Is it coming from Sanuk? Is it coming from something in UGG? I'm just curious.

It's coming from -- or really just, as we've all virtually completed the fall order book, and our confidence level where the order book stands relative to where we were when we reported, the third week of February. It's our increased confidence relative to the wholesale business. Sanuk, we held our total guidance for the year on Sanuk, albeit we feel pretty bullish to where that's headed. But it's just increased confidence relative to the third quarter and the fourth quarter on our domestic UGG wholesale business that drives us to more comfort to elevate that number.

Okay, that's I guess -- that's pretty good to hear. And then just when you're thinking about sort of the back half and what you're anticipating from, and no one can predict the weather, but are you anticipating that you have a normalized winter season? Are you anticipating a continued uncertainty and kind of somewhat an unusually warm winter as you go into the back half? I know it's hard to predict here, but just sort of your thoughts about how you might be thinking about that.

I think we're really -- we talked about that on an earlier question. It's tough to predict the weather. We've obviously had a lot of good discussions with our retailers when we formulated the order book. I think if we get some colder weather, relative to what we've -- what the normal weather and pattern would be, there's an opportunity for some upside and we'd have the inventory, especially in our retail and eCommerce business to be able to chase that.

Okay. And the very last question I have, I guess for you, Tom, here is just, when you think about the back half and your comment about, obviously, it seems like most of the growth is going to be fourth-quarter-weighted, can we think from an earnings perspective the majority of the growth is going to be fourth-quarter-weighted, just given the cost, given probably some softness on the international side in Q3? Just kind of your -- any thoughts around maybe what the earnings bias could be Q3, Q4, would be helpful.

Yes, I think that's a very good question. You all know we're not giving guidance for the individual quarters. But in the back half, there's going to be strong growth in the fourth quarter and relative to the prior year. And because of the cost pressures in the third quarter with sheepskin and then that's a quarter, there's not as much offset from a retail perspective and now those pressures in Europe in the third quarter and international wholesale has better margins than domestic, then you could see the third quarter could be a down quarter relative to the prior year.

And next, we'll go to Scott Krasik with BB&T Capital. Scott D. Krasik - BB&T Capital Markets, Research Division: First, a housekeeping question. Are you -- have you already been consolidating the results from the China JV? Or are you bringing anything onto the income statement or the guidance from that?

We were previously consolidating those results and then we had a minority interest at the bottom that we would take away from net income, so there's really no change in our sales and COGS and operating expenses. Scott D. Krasik - BB&T Capital Markets, Research Division: Okay. And then just help me understand the Asian business a little bit better. Are your distributors better capitalized than in Europe? How much of it is a retail business versus a wholesale business? And how do you view the flat comp? I know you said that the weather was unseasonably warm. What are the other factors there impacting Asia, though?

Scott, this is Zohar. The flat comps, I mean, came from our own stores. Our distributors in -- the bulk of our Asia business is done through direct, which is China and Japan. Our business over there, it's not that big at all in the rest of the countries. So I wouldn't say that they have any different capitalization than our distributors in Europe. Scott D. Krasik - BB&T Capital Markets, Research Division: So then, sort of quantify -- so then within China and Japan, is the majority of business done in your own retail stores? Or you have big wholesale business there as well?

In China, there is no wholesale business. It's all direct. When we talk about the comps, all of our China business is through the UGG retail stores. In Japan, the bulk of the business or a good split is retail and wholesale. Scott D. Krasik - BB&T Capital Markets, Research Division: And the health of the business in Japan right now?

It's improving. We are pleased to see the improvement that we are seeing, especially in the Q2. Scott D. Krasik - BB&T Capital Markets, Research Division: Okay. And then just because a lot of the weakness potential in Europe is out of your hands, it's more macro-driven, did you think about really ratcheting back, your assumptions around that business for the back half of the year if it doesn't turn? What gave you the confidence to take it down just slightly?

Well, we've got some good visibility now. They've got a good portion of their third quarter at this point in time pre-booked. The fourth quarter has always been sort of highly dependent on reorders. We had another year under our belt in terms of developing that market. So we took it down a pretty reasonable amount. But at this point in time, we think it's down to a level that we can meet the numbers. Scott D. Krasik - BB&T Capital Markets, Research Division: Okay. And just last, I'm sorry, on how you said the spring business was up meaningfully. Can you quantify where your UGG spring business is at?

Well, we have had good sell-through of non-Classic styles, the Mini Bailey Button, the fabric-uppered boots, sandals, et cetera and in our own stores, as well as our wholesale. So I'm not going to get into more specifics than that other than we're quite pleased with that kind of growth that we're seeing. And men's particularly has been up significantly. Tom?

Yes, looking, Scott, back to the script, we did comment on all of our spring styles. Just look at spring styles what's identified as a spring style, which is an expanding category and those were up close to 20% and we gained some important shelf space. Again, the first quarter is highly dependent on boot product as well. So that strong growth in spring styles was offset by the pressure relative to the colder weather product. Scott D. Krasik - BB&T Capital Markets, Research Division: Right. Most of that was probably Sanuk, but you're saying that it was strong across the board.

We had a good quarter with Sanuk, at least, where that brand's headed.

We had a good quarter with UGG spring styles.

Right. I was referring to that point in time to UGG spring styles.

And next, we'll go to Jim Duffy with Stifel, Nicolaus. Jim Duffy - Stifel, Nicolaus & Co., Inc., Research Division: 2 places where I need some clarification. Angel, maybe I heard you wrong, but I think you said in your prepared remarks, retailer open-to-buy for fall down, your share of that the same. That statement seems to imply your UGG U.S. fall bookings are down, yet that's inconsistent what I heard you say during the Q&A portion. Help me get clarification here.

What I was referring to was that given the warm winter, open-to-buy based on sell-through is down for most retailers, for those categories of product. UGG's proportion of that open-to-buy pool has remained constant from everything we can gather. It might even be up a little bit because what people do is they tend to go to those brands that are proven performers and they tend to be more reticent to bring in brands that are not as proven. So... Jim Duffy - Stifel, Nicolaus & Co., Inc., Research Division: When you say proportion, you don't mean share, you mean dollars?

I mean dollars. Jim Duffy - Stifel, Nicolaus & Co., Inc., Research Division: Okay, that's helpful. And then the international markets, you seem to be struggling in some of them. Do you need to take steps backwards in your international markets to go forward? Angel, I thought I heard you say your stores in Asia performed well. Is it a typo in the press release where it says the Asian store comps were negative?

No. Let me -- I don't believe for a minute that we need to go backwards. I think we've been progressing at a fairly modest rate actually. We've not grown our retail base outside of the United States, anywhere near as aggressively as we could have. We've been building a foundation of operating excellence in each of these regions, and our -- our performance across the board in Asia and in Europe has been extremely consistent and evolving very nicely with the exception of the impact of weather and, as we've mentioned, the macroeconomic impact in Europe. So we, generally speaking, feel very good about the growth in our performance outside the United States.

Jim, as a follow-up to that also, when we talk about the performance, it's a relative performance, and all those stores are still very profitable and contributing nicely to the bottom line, as Angel was saying. And you look at the comp, for example, in Japan, there was only one store in the comp and now we have 12?

Oh, you mean total Asia, it's something like 12.

Right, no but in Japan it's...

So the performance of this, if we look at the overall performance and the same in China. Jim Duffy - Stifel, Nicolaus & Co., Inc., Research Division: I see. Okay. Shifting gears a bit. Zohar, I was very intrigued about what you had to say about sheepskin cost. You lock in, in October. It seems you're seeing better cost now. Would there be opportunity to lock in sooner or is there a structural reason why that's not possible?

No, you can lock sooner, but you might be at a disadvantage because the biggest killing season is in Australia and that starts in Q3. So until then, you don't really know what the prices are going to be. So you're better off waiting and see what the prices, and that's how the suppliers are placing their prices upon.

And your final question will come from Christian Buss with Crédit Suisse. Christian Buss - Crédit Suisse AG, Research Division: Yes, I was wondering if I can get a little bit more color on the seasonality of the Sanuk business and then I've got a follow-up after that.

Yes, the Sanuk business is, historically, has been primarily a spring business, which normally is going to be more than 50% of business. Closer to 60% of their business is going to be in the first half, so we've seen good growth. We can't report out a prior year first quarter number or second quarter number because we didn't own the company at that point in time. So there's some requirements we can't get into that. But the back half, with the new initiatives we have there, we're expecting some strong growth in the back half of the year as well this year. Christian Buss - Crédit Suisse AG, Research Division: Okay. I'm trying to understand the second quarter guidance then. It seems to imply that there's some continued struggles in the UGG business in the second quarter. And I'm wondering if you could provide some color into, given that we can't talk about weather as the holdback in the spring/summer season as much, sort of what's leading to that softness and that weakness in the second quarter?

The UGG business in the second quarter is more of a -- sort of a reorder, a little bit of sell-in of some spring product. It's about in June, the Nordstrom anniversary sale. So it normally is not that big in the scheme of things. And then on Sanuk, we do have some good growth for sales for Sanuk in the second quarter. And I think one thing to keep in mind is, as I talked about it earlier, our international distributor sales in Europe are down pretty significantly relative to the prior year. Christian Buss - Crédit Suisse AG, Research Division: Can you maybe help quantify that?

I mean, no, we don't need to get into any -- we've given you guys a decent amount of where we're headed for the second quarter and some of the sort of salient details in terms, from a modeling perspective.

Well, thank you, all, for your attention and participation on the call. Clearly, this quarter was not what we wanted. However, as I mentioned earlier, I'm very confident in our management team's ability to continue to develop our brands and continue to drive sales and earnings growth in the remainder of the year. So that's really our focus and our effort and we're extremely committed to ongoing delivery of high shareholder value for this company. Thank you, all.

Ladies and gentlemen, that does conclude today's presentation. We do thank everyone for your participation.