Welcome to the Fossil, Incorporated fourth quarter and fiscal year 2012 earnings conference call. (Operator Instructions) I would now like to turn the conference over to Allison Malkin of ICR, please go ahead.

Good morning. Before we begin, you should be aware that during this conference call, certain discussions will contain forward-looking information. Actual results could differ materially from those that will be projected during these discussions. Fossil's policy on forward-looking statements and additional information concerning a number of factors that could cause actual results to differ materially from such statements is readily available in our Form 10-K and 10-Q reports filed with the SEC. In addition, Fossil undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise, except as required by law. If any non-GAAP financial measure is used on this call, a presentation of the most directly comparable GAAP financial measure and reconciliation of this non-GAAP financial measure to GAAP will be provided as supplemental financial information to this release under the Earnings Release section under the Investor Relations heading on Fossil's website. Please note that you may listen to a live webcast or a replay of this call by visiting Fossil's website and then clicking on About Us at the bottom of the Home Page, and then on Investor Relations and select webcast. Now, I would like to turn the call over to Fossil's Chairman and CEO, Kosta Kartsotis.

Thanks, Allison. Good morning, everyone, and welcome. Joining us today to discuss our fourth quarter and full year results are Dennis Secor, our Chief Financial Officer; and Jennifer Pritchard, our President of Retail. We are pleased to report solid fourth quarter results that represent both top and bottomline records for the company, and concluded another strong year of growth for Fossil. During the quarter, we expanded our business in each of our major geographies with global sales up 14%, led by watches. We improved our gross margins as we continue to focus our resources toward higher return initiatives and efficiency improvements across our organization. This drove expansion in operating margin and a double-digit increase to operating income, and delivered record earnings per share of $2.51. This includes the anticipated favorable tax benefits that Dennis will describe shortly, along with the accretion from our long-term share purchase program, reflecting our strong cash flows, even after investing in support of future growth. In the fourth quarter, we continued to capitalize on the advantages of our global design distribution and sales infrastructure to increase our geographic reach across our three core businesses, the FOSSIL, our watch portfolio and SKAGEN. By geography, we continue to develop our business around the world with particular emphasis on our growth markets. Asia remained our fastest growing geography and continues to be our single largest opportunity. We remain in the early stages of development in the continent and continue to see tremendous long-term potential there. In North America, our holiday performance was strong, with sales accelerating significantly from the third quarter. We were also pleased to deliver growth in Europe, even as we continue to navigate company specific and economic challenges. Turning to our three core businesses. We grew our FOSSIL brand, where a strong consumer acceptance led…

Thanks, Kosta, and good morning. Let me start off by highlighting our reported fourth quarter 2012 financial results from this morning's press release. Fourth quarter net earnings increased 28% to $151 million and diluted earnings per share increased 34% from $1.87 to $2.51 per share, which includes a $0.09 per share unfavorable impact related to foreign currency. Excluding certain non-recurring expenses related to last year's SKAGEN acquisition and an income tax benefit from prior year's audit, adjusted diluted earnings per share increased 21% to $2.27 for the fourth quarter. Net sales grew 14% to $948 million and increase 15% in constant dollars, with each of our segments delivering sales growth in the quarter. The expansion of the global watch business was the most significant driver of growth along with the acquisition of the SKAGEN brand, where total quarterly revenues were $43 million. Jewelry sales increased, bolstered by the success of the Michael Kors line. The growth in those categories more than offset a modest decline in our leathers business. Overall, we increased our penetration in our direct-to-consumer business, as we continue our strategy to expand our global outlet presence. In our North American wholesale business, sales increased 16% to $355 million, which includes a $2 million favorable currency benefit. We posted sales increases in the U.S., Canada and Mexico, as well as with our Latin American distributors. Our sales growth was led by strong performance in watches, particularly with our license brands along with a $15 million contribution from the addition of SKAGEN. While our leathers business declined in the quarter, jewelry sales increased, as strong performance with our license brands offset the impact of the repositioning of the FOSSIL line. The fourth quarter also benefited by about $17 million in shipments, as certain customers delayed holiday deliveries from the…

(Operator Instructions) Our first question is from the line of Omar Saad with ISI Group.

Kosta, can you talk about the Tory Burch deal, it's pretty exciting, that's definitely a big kind of upcoming brand, a lot of people are focused on, as we think about it. But it still mostly, I think largely a North America brand in its existing businesses. How do we think about kind of the landscape at retail, as you add kind of potentially new brands to that portfolio and continue to grow your existing portfolio in North America? How do we think about where new brands like Tory Burch are going to fit? Is there room at the department stores? Are there other channels you can utilize for new brands like this or is there a little bit of an element of potentially Tory Burch, some of the styles might replace some of the existing styles? Help us think about, how the landscape is going to develop at retail as you get more new exciting brands into your portfolio like this?

It's actually we think a very exciting opportunity for the company. It will start in 2014, which is obviously some time away. But if you look at the trajectory of the brand from just going and the strength that it has, not just in the United States, but in the world increasingly. We think it's a very strong, long-term and global brand. So similar to what we've done with Kors and some of the other brands, I think it's an opportunity for us to think differently about the market. I think it could and in fact create wide space and the interest. And as we look at the total watch business, the one thing that just continues to happen is globalization across the world is driving a lot of this interest over brands. So if you imagine that consumers around the world increasingly want to be part of a customer experience attached to a brand, rather than to a watch brand, we think that is ongoing and it can create a significant wide space long-term. So starting with that, we are looking at it and we think we can put it in a position, different parts of distribution around the world that could create a new business and even more interest. If you look at what's happening with some of the other brands that have gone to market, some of the success we have had, there is a wide open market out there. Increasing numbers of consumers, especially in Asia, they're very interested in this category and are very willing to be part of a brand story that includes a timepiece. So we're very excited about the future of it.

And you think it could fit easily into your existing distribution, not just globally, but in North America as well?

Yes, absolutely. If you look at our distribution in the world, we have all types of distribution, not all our brands and every point of sale. So there is a different profile for different brands and there is a certain group of brands that fit in the different distribution. We think that we did very well in a lot of parts of our organization. Obviously, we'll start off small, but we think as the potential expand, the brand gets stronger.

Our next question comes from the line of Rick Patel with Bank of America Merrill Lynch.

Can you just give us a little bit more color on price increases, any brand or geographies that you can highlight would be great. And secondly, is there any way to quantify the tailwind that you'll get to sales growth in 2013, as a result of price increases taken last year?

As we've talked about before, we made an effort in some brands and categories in countries to be more inclusive on pricing, so we actually lowered some prices and increased assortment at the opening price. Overall, I think the impact actually lowered our average in retails as much as engage more customers in the brand, and were able to trade some of those people up. So I don't think we really noticed anything in that regard in terms of low average in retail. And again, and your question about the tailwind from price increases, I think our average in retails for 2013 will be similar to last year. I don't think we're really going to see average in retail is going up. So I don't know if we're going to get a tailwind from prices.

Can you walk us through how the department store and specialty retail channel will approach a new brand launch like Lagerfeld? Do you expect them to create new cases to sell this merchandise or do you think they'll deemphasize underperforming products to make space for that brand? And is there any risk that similar Fossils, other brands, will lose shelf space as a result of Lagerfeld coming in?

The one overarching issue is that, this watch business has been very, very strong. And all the stores that we sell to, especially in United States, they all have taken the opportunity to give it more space over time. This business is much, much larger than it was three and four years ago. And as you know, virtually all regular price averaging retails are very high and margins per foot is very high. So the stores have the opportunity on getting more space. So we don't really perceive space an issue, it's going to obviously start up small. But this business is expanding in a rate, where we think we can continue to gain space, and we're gaining market share also and that will be an ongoing process.

Our next question is from the line of Oliver Chen with Citigroup.

Regarding the outlook, it looks like you're guiding the 16.5% to 17% operating margins versus year 17.2%. Could you just give us a rough sense of how we should think about the gross margin average versus SG&A?

We got a lot of initiatives going on in the margins that we benefited from this year, and many of those should continue to drive improvements next year, and achieve among them the liquidation strategy, as we really manage our inventories tightly, we've got less inventory to liquidate, and as we develop our outlook strategy, we can liquidate it at stronger margins, and as outlets go into their various regions, we don't have to move inventory around the world. So that we think should continue to help us next year. We've got the continued strength of the watch business, should be a tailwinds for us, as we continue to develop the direct channel, including the outlets that should also be a tailwind, and where we're planning currencies. Currencies right now are stronger than they were on average a year-ago. So those are the drivers of the margin and we're going to give some of that back. We are still in investment mode. If you look at the last several years of this company, it has nearly tripled over say the last three, four years, and that's added a lot of complexity to the business. Kosta said in prepared remarks that complexity poses challenges for us. So we're continuing to invest in infrastructure, both here in Asia and in systems to improve the customer experience, to improve our visibility, to help drive efficiencies and supply chain, and number of those. So those will continue to add to the SG&A line. But we believe next year that we should see some offset through the gross margin expansion that we can give. So those are all the elements that drive that 16.5% to 17% margin estimate.

Kosta, as a follow-up, there's been excitement about smart electronic watches, congratulation on Tory. But what's your overall, the picture view on that opportunity and versus your and kind of strategically your thoughts on the evolution of that?

Well, as you know, we've been involved in that business for some time, just research and development as looking at it and we're exploring it. We had a number of products out over the last several years that were different types of smart watches. And the overall response was, what I would say is poor, and one of the issues is that you have to charge these devices up everyday. So the complexity of people's lives with many multiple gadgets they have, for people that charge-up their watch everyday is also we found somewhat restricted. So we're watching it closely. We do have a number of things we're looking at and watching. But our business, I think is really more explosive on globally branded lifestyle watch business. I think there is a huge amount of opportunity there for us. And we're continuing to move in that arena and we think it's a much bigger opportunity.

Our next question is from the line of John Kernan with Cowen.

It seems like a lot of the SG&A investments are centered around your direct-to-consumer growth and store growth. Can you talk about unit growth by concept in 2013? It seems like there is a theme of greater outlet penetration, but also give us your thoughts on the accessory store concept growth, watch spacing growth and then of course, the Asian concession growth as well?

Well, as we did last year, opening more outlet stores this year than normal. And we had talked about this over past couple of calls, so if look at our outlet store sales as a percentage of the total company sales, it's a single-digit percentage. And when we benchmark peer companies and other companies in the industry, it's a very low percentage in unit. We think that by increasing the amount of capacity in the outlets, gives us the opportunity to make our entire business model more robust and efficient and predictable. So as we said that we're going to take a very balanced approach and we're not going to expand it to the degree that some other companies have. But expanding a bit this year, or last year and moving forward we think there is a good thing for us and it enables us to liquidate inventory globally very efficiently and reduce a lot of costs, not just on the marketing side but just in handling cost et cetera. So we still believe that if you look at our Fossil accessory store and we have about 254 stores, I believe and they do very well all over the world. The sales per foot are in the 800 to 900 range. We are really interested in putting stores in flagship markets to really increase the awareness of the FOSSIL brand more than we are just backfilling different malls around the world. For example, we opened the store in Shanghai last year, it's doing very well. We're opening a very high profile store, a small store but a high profile store in Hong Kong that we think is going to kick up our awareness in Asia. We did the same thing in Korea last year. Also we've done the same thing…

And then you've talked about some of the fragmentation in the Asian wholesale channel. Should we expect slower unit growth in that concession channel in 2013 and potentially into 2014? What type of total concession growth can we expect in that channel for this year and next?

Well, we are undertaking a number of initiatives to improve the comp performance in Asia and the team that we built over there, very merchant-driven and focus and has got a lot of information and experience with driving comp sales and all the KPIs that go with it. So we really have a lot of initiatives in place to do that. In addition to opening additional concessions across the region, so we're working on both. And we think we can increase the productivity and also open additional concession at the same time. One another thing that I would mention is that we are really more interested at this point in getting some partners involved in the China opportunity. It's a very complex and fragmented market. And we think that we can speed up our process over there by doing this. We're working diligently to try to execute that.

Our next question comes from the line of Anna Andreeva with FBR Capital Markets.

I had a couple of questions. First I was hoping to get some clarity around gross margin. In this fourth quarter, I guess, it came in slightly below expectations. What drove that? I guess, was foreign currency a surprise for you guys? I mean, it looks like that number was a little higher than what we would have expected? Second, I'm not sure if I missed that, but comps by concept just U.S. versus Asia your outlook and stuff like that? And I'm not sure, if you'd talked about Europe, but it looks like ex-SKAGEN Europe was down 5% give or take? And Germany has been now challenging for the last couple of quarters? Can you maybe talk about your expectations in Europe as we go through the year especially as reposition jewelry line begins to help in bit more?

Let me go back to the first part of that question, that the gross margins in the fourth quarter were much stronger than they were a year ago. And that's despite the fact that we had big currency headwind in there. So we were anticipating that currency headwind. The big driver there that helped that was what we alluded to earlier that we should continue into next year was the adjustment in the liquidation strategies. As I mentioned, we've managed the inventories exceptionally well. They're very, very clean. And we've been able to liquidate now more through our outlet strategy. So you can see the benefit in the fourth quarter. You can hear us talk about next year, that's really driving the initiative to grow that channel. We also with the strong watch performance, that also helps on the gross margins and as we continue to shift more towards a direct model, that's helping to drive the gross margins. So those were the big drivers in the fourth quarter that helped the margins. You were right, on your observation, on Europe, that ex-SKAGEN, the core business was slightly down. But as we mentioned in our prepared remarks, sequentially it was an improvement from where we were in the third quarter. So we were very encouraged by that. Germany is a large market for us. It was down modestly. The biggest impact, just because of economic issues going on is Italy. But we also grew strongly in the U.K. and France. So it's a portfolio of markets that we're managing over there. And we're very encouraged by, at least the trends, moving from 3Q into 4Q were more positive.

And just expectations on Europe as we go through '13, Dennis?

Well, our view is that we're looking at that business. We try to be as realistic as possible. I mean if I talk about next year, if I kick it up one level, but the good news for us is that our growth is coming from a variety of different sources, both in Europe and around the world. We're going to benefit from door expansions that we added last year, plus new doors, we've got new brands coming on, we can take new existing brands into new distribution, we pick up from an extra quarter of SKAGEN. So there is the lot of things that are going to be supporting our growth. We're not overly dependent upon comp, so I think with what we've approach, as we're looking at things realistically based on what we're seeing in the market. And we've got a number of leverage that we can pull back that will drive sales.

Our next question is from the line of Liz Dunn with Macquarie Capital.

I'm interested in jewelry across both your own brand and the portfolio of brands, because it seems as though multiple brand you are talking about on jewelry initiatives. But jewelry was down in 2012, so can you just give us a little bit more color on how the jewelry repositioning is proceeding in Europe, with your own brand? And then how big an opportunity are some of these initiatives with the portfolio brands, because I think at ICR, of course was say, they think it can be 5% of their own store, the jewelry business. So I'm just trying to get a sense of what your expectations are for jewelry across your portfolio brands?

Well, first of all as we've been discussing we had changed our Fossil jewelry line quite a bit and that cost us some sales last year. And coming through the fourth quarter, the new line that was out there, which was a more global assortment, is really more in tune with the Fossil design aesthetic. Actually, we're showing improvement both in our own stores and we saw some improvement at wholesale also. So we went through that restructuring. We think we're in good place to grow, especially since the net category, were up against some lower numbers this year. In terms of the other businesses that we're operating, of course it really has got to a great start from last year, and likely it's going to be strong long-term. We're actually seeing it sell extremely well in not only in the United States but other regions of the world. It's kind of a different look. It's a more iconic branded look, higher quality that is resonating I think with consumers in a pretty strong way. And I think there is a less and less interest I think in costume jewelry and more in more high quality iconic lifestyle branded jewelry, and that kind of plays into our strength. And then of course, the other thing that we're very excited about is the SKAGEN jewelry is coming out soon. And as we've discussed before, the Fossil jewelry that was in Europe was a different line and it had a more Northern European look and kind of Nordic, didn't necessarily fit with where the brand was going. So that change that we made in the line was because of that. Well, the team that originally built that line, which was very successful and grew very quickly, has been for the last year really working on SKAGEN jewelry. So that kind of Danish design, Nordic looks for Northern Europe that was going to go into the market, is going to take some of what we dropped and we changed the Fossil line. So we think the SKAGEN jewelry is going to grow pretty quickly, not just in Europe but around the world as we continue to penetrate more doors through our own distribution. In addition to that, we do think long-term jewelry and lifestyle brand jewelry is an opportunity. And we kind of look it at as a part of our watch business, because it's the same characteristics in terms of lead time. It's branded, it goes to the stores. It leverages our global infrastructure. So we think it's an add-on and has the potential to eventually make the size of the company larger. And of course, especially when you look at Asia, the categories that consumers over there are most interested is watches, jewelry and accessories. And that's our zone and we think we're in the right place.

Do you have any sort of longer-term goals about how big that business can be? And can you just confirm that the margin structure is similar, gross margin structure is similar to watches?

We don't have a target that we want to give, but we do think that it has got a very significant long-term potential. And the margins are very similar. Almost all the characteristics of the business in terms of lead times, numbers of SKUs, consistency of SKUs is really very similar. And you can imagine, lot of our sales reps around the world that are going to stores, selling Kors watches, also have Kors jewelry with them. So it leverages our infrastructure, and just flow through our distribution pipeline.

Our next question is from the line of Scott Krasik with BB&T Capital Markets. Scott Krasik - BB&T Capital Markets: Just a quick question on the contingency reversal, is that because you've already taken reserve for an earn-out but they aren't going to meet. Is that the chartered in the fourth quarter?

Essentially when we executed the deal there was a target, a very short-term target in terms of topline that we needed to hit. It was a pretty challenging target. So we've now made the determination that we probably won't hit that very specific near-term target and that drives reversing that liability. Scott Krasik - BB&T Capital Markets: And that was that 12-month target from May to May or whatever that was?

Yes. Scott Krasik - BB&T Capital Markets: And then just you alluded to China, you need to maybe bulk up with partners but what was the sales in china for 2012 and where do you expect the dollar growth to be in '13?

We're not reporting dollars by country. But suffice to say, the China did grow very quickly, still relatively small business. And it grew very quickly and it has a huge potential going forward. So we are just looking at ways to book that along faster. Scott Krasik - BB&T Capital Markets: And just lastly, I think at ICR a month or so ago, you still said that you thought you would get leverage in Asia in the back half of the year. So what changed in your thinking between then and now?

It's really just the topline. I mean, we look at that long-term opportunity and we are as excited about it as ever. The topline just as, Kosta, alluded it's a little more challenging to build out the distribution. We're looking for partners that we can engage with that can help us really step on the gap. But obviously getting that leverage is a function of what the topline looks like next year. So we've moderated that near-term view just because of the challenges that we're having in building that distribution as fast as we would have liked to.

Your next question is from the line of Neely Tamminga with Piper Jaffray.

Kosta, just a little bit more on the China distribution strategy, I think it sounds like you guys are planning on working with some partners to kind of accelerate the new opportunity there. Just wondering if there's another analog or a company which you aspire to kind of maybe emulate from that position, so that we can kind of get a sense as to who does it well from your perspective?

Well, there is a number of multi-brand, multinational companies that are in different categories. So you can say, Luxotticaf in sunglasses, there is Swatch Group in watches or L'Oréal and Estée Lauder in the beauty industry. I mean, those are the types of companies that we're benchmarking. We do think that if you look at accessories and the categories we operate in, relatively static product line, high-margin, high-predictability, not a lot of seasonality. We think that our categories kind of fit into a profile, a real-systematized approach to business, handling multiple brands. A lot of the systems we're putting in place, a lot number of technology investments we're making like PLM system, product lifecycle management system, to enable us to handle the product development for multiple brands and categories in a very efficient and quicker way. Also, we're installing a new merchandize planning system, a new financial reporting system, the SAP HR System and SAP Manufacturing Management System, a sales force automation system is being tested right now. We have also a lot of initiatives in place regards to omni-channel and lab analytics and CRM. So lot of things we're putting in place, really to enable to, as we mentioned in the prepared remarks as to efficiently manage a much larger business with more brands and more categories that we think is appropriate. We're in a really good place in terms of where we're going. And have a large opportunity and we just want to be able to get it all organized so we can have long-term sustainable growth. So we think we're at good place.

Just a follow-up question to that. So as you look at China for the next kind of 12 to 24 months, do you think that you need to see more capital allocation towards the human capital side, tech capital or actually fiscal capital like the DC or some things that affect?

Well it's some of each. As we've said before, we have put a lot of human capital on the region and there is more to come quite honestly as continue to get larger. In terms of capital for concessions et cetera, we have a very high and quick ROI on them. So it's a very profitable and return on capital is very high. So you can see it in our margins and in our mix for example that it's a very big opportunity in terms of return on capital. So it's a big complex puzzle we're putting together with the huge upside. And it's a game changer for the company and we're moving diligently to get there as quick as we can. But we want to make sure we don't go skinny on our investments in the short-term that could cost us long-term sustainable growth in the future. So it's a balance we're trying to strike and that's where we are right now.

Our next question is from the line of Jane Thorn Leeson with KeyBanc.

I just had a quick question on Latin America, if you could explain how that business is laid out and some of your plans going forward there?

Well, with the recent acquisitions we've made with Mexico and also a distributor in South America, we basically have under our control every country and the region except for Brazil. Brazil is a different country in terms of the types of duties and the way you have to execute there. So we're not currently operating on our own there. But if you just look at the growth and the region on the last couple of years, it's interesting but we also always talk about how the people in Asia love lifestyle brands, so South America, Latin America is at least is strong there. And lot of our growth in some of the new brands we've had in the last five, six years has come from that region. But the potential is very large. So for us to be able to directly own that and to invest in that and to put our initiatives in place more directly we think is a very large opportunity. The interesting thing to us is again we have this big opportunity in Asia, but parallel to that a very large opportunities in other emerging markets Latin America, South America, Middle-East and Eastern Europe and some parts of Asia, and Malaysia for example Indonesia that our consumers are growing in a large numbers. And there is even starting to be activity in Africa, and this is very interest to us, so there is long-term play here of additional gains for us that we're trying to invest simultaneous to our big investments in Asia.

And then following-up on that is there any costs we should anticipate going to that region for this year and next year incremental?

Well, it's embedded in our guidance. I mean just from a modeling standpoint we pickup some gross margin, but we also pickup some expenses. So just you need to model that and we've already anticipated that in the model. But the impact overall is going to be very modest to the consolidated results.

Our next question is from the line of Barbara Wyckoff with CLSA.

Could you talk about the mix of brands in the business in Korea and Japan and the concessions there? Where is it now? How do you see it evolving over the time? And then I want to talk about the outlets for a second?

Well, in Korea and Japan, the brands that are strong over there are similar to what the rest of Asia, which is mostly the luxury brands Armani, Burberry, Marc Jacobs is very strong in the market, of course, it's showing some strength especially in Korea. And across the board, I think all our brands were more fair. Fossil is actually very strong in throughout Asia and especially in Japan. We have a number of stores there. So the portfolio works. In Japan, for example, it's interesting we have some outsize businesses with Diesel. For example, as you know the Diesel watches are very, very large. So it's kind of counter-intuitive. But basically our system is such that we put the products in place and do a lot of testing and whatever sells through a retail, we expand it quickly. And we're reading very closely what the customer is buying and put that product in market, so it leads us in different directions with. From our experience, all of our brands are going to work in Asia.

Then on the outlet, at what point do you think you'll be able to make product for the outlet stores? You'd just start clearing goods now?

We expect that we're going to actually be making some made for products this year. And the great thing about that is that it helps further enhance those margins that are coming out of the outlet strategy. So the outlets work for us in a variety of reasons, in ways, both giving us additional capacity to drive sales of made for products and also to liquidate our other products in much stronger margins than we would have for selling them through offerings.

And how many outlets are you opening this year?

Barbara, its 57 outlets this year. Pretty consistent with what we did last year.

Barbara, its 57 outlets this year. Pretty consistent with what we did last year.

And Jennifer, would they be just mix between Fossil and work stations?

Yes. And it's probably likely going to be right down the middle.

Yes. And it's probably likely going to be right down the middle.

And locations?

We're filling in around the globe. It's the best the best opportunities. As the best opportunities present themselves but we're very focused on rounding out our international outlet base.

We're filling in around the globe. It's the best the best opportunities. As the best opportunities present themselves but we're very focused on rounding out our international outlet base.

Our next question is from the line of David Wu with Telsey.

In Asia-Pacific wholesale, can you comment on what you're seeing in terms of sell -through rates and inventory levels of the retailers? And do you think some of your fourth quarter shipments may have been pushed into January from December, just given the timing of Chinese New Year, which obviously fell in February versus January last year.

We are monitoring inventory relative to sales very closely throughout the entire world, but obviously in Asia as well and we have not seen anything in terms of slower returns over there. And then in terms of shipments moving, we really have not seen anything that tells us that there has been shipments' moving from one quarter to the next. And our business is quite a bit different than the Swiss-watch industry. They are showing kind of volatile percentage increases month-to-month. And if you look at it, then some of it could be pipeline fill or de-fill. But if you look at the Swiss-watch industry, the inventory turn in retail is about one-time per year, whereas our turns at retail are three-year or higher. In our own concessions, especially in Asia, it's probably higher than that. So it's kind of a different business model. So you don't see those huge fluctuations of sales increases that pipeline fill relative to sell-out, like you might see in the Swiss-watch industry.

Are you expecting Asia-Pac wholesale to perform below, say, if you're at 25% annual growth targets over the near-term, just given the tighter inventory controls or should we start to see improving trends as we retailers start to replenish?

I think as we said a little bit earlier that we've moderated our near-term view. I mean, in longer-term we continue to see a very strong, about the ultimate opportunity in Asia. But given, just some of the early challenges and building out that distribution, that's not quite going at the pace that we had initially anticipated, so that affects it in the nearer term.

And I think you mentioned that the Asia comp was up low-singles in the quarter. Was there any sort of specific region that was driving that deceleration?

I don't have any specific details of anything that jumped out of those.

Thank you. We have no further questions at this time. I'll turn it back to management for any closing remarks.

Well, great, we appreciate everyone joining us today and look forward to speaking with you when we report the first quarter in May. Have a great day.