Good day, ladies and gentlemen. Thank you for standing by. Welcome to the Fossil, Inc. Q4 Earnings Conference Call. During today’s presentation all participant will be in a listen-only mode. Following the presentation the conference will be opened for questions. (Operator Instructions). Today’s conference is being recorded. And at this time I would like to turn the conference over to Allison Malkin of ICR. Please go ahead, ma’am.

Thank you, good afternoon, everyone. Thank you for joining us today. 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 Group’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, the company 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 through this release located in the Earnings Release section under the Investor Relations heading on the Fossil Group website. Please note that you may listen to a live webcast or replay of this call by visiting www.fossilgroup.com under the Investors section. Now I would like to turn the call over to the company's Chairman and CEO, Kosta Kartsotis.

Thanks, Allison, and good afternoon, everyone. Joining us today is Dennis Secor, our Chief Financial Officer. We are very pleased with our fourth quarter performance, which concluded another excellent year of growth and many noteworthy accomplishments towards achieving our long-term goals. We continue to leverage our competitive strengths in branding, design, manufacturing, sourcing and distributions. We gain increased market share in the growing watch industry. We capitalize on our strong portfolio of global brands, increased our geographic reach and expanded our own lifestyle brands and watches and other key categories. We continue to enhance our operational capabilities, as we build our team and develop the infrastructure we need to fully realize the potential of our brands and our operating model. And we leverage the strength of our balance-sheet and solid financial position to further enhance returns to our shareholders. In all, for 2013 we achieve record results delivering a 14% top line increase to nearly $3.3 billion. Coupled with stronger operating margins and an 8% reduction in our share base, we are reporting $6.56 in earnings per share, a 17% increase over last year. I would like to thank our teams around the world for another successful year as we look forward to further capitalizing on the significant potential that exist for us this year and beyond. For the fourth quarter, we leveraged our diversified model to deliver sales and earnings above our expectations even as the holiday season remain very promotional especially in United States. In total, our sales rose 12% with each region contributing significantly to that growth with double-digit constant dollar sales increases. In the quarter the FOSSIL brand continued to deliver sales growth posting increases across all of our regions. We’re particularly pleased with the brand’s double-digit gain in Asia where we’ve been investing and building…

Thanks Kosta and good afternoon everyone. Fourth quarter net sales grew 12% to $1.62 billion as we posted sales increases across all of our reported business segments. Our growth continues to be very balanced with all three geographic regions delivering constant dollar double-digit increases. Our growth was also well distributed among our brands with the vast majority of them posting fourth quarter increases. Our sales growth was driven by a 14% increase in our multi-brand watch portfolio. The FOSSIL brand grew by 4% primarily driven by increases in both watches and jewelry. SKAGEN sales were down 4% in the quarter anniversarying last year’s refinement of the assortments one of many steps we took to integrate the brand on to our platform. In North American wholesale, sales increased 13% to $400 million. Our North American wholesale growth was driven by strong double-digit gain in our multi-brand watch portfolio. Increases in watches and jewelry drove the growth across the U.S. Canada and Latin America and were partially offset by declines in leathers with the vast majority of the decline was driven by one of our non-core lower price brand. We did deliver higher than anticipated wholesale shipments both at our department store and some off-price partners. Many of our department store partners were very promotional when they run up to Christmas, which resulted in higher replenishment orders at the very end of the quarter. In Europe wholesale, our business remained very strong, as sales increased 18% to $274 million, which includes $9 million of favorable currency benefit. Our European growth was driven by strong double-digit gains in our multi-brand watch portfolio, as well as in our jewelry business with particular strength from our license portfolio. Our leathers business posted a small decline. Our growth continues to be balanced as we posted gains…

Thank you sir. Ladies and gentlemen, we will now begin the question-and-answer session. (Operator Instructions). Our first question is from the line of Erinn Murphy with Piper Jaffray. Please go ahead.

Thank you, good afternoon and congratulations on a great quarter.

Thank you.

Can you talk a little bit about double-digit growth in FOSSIL in Asia and very strong growth in China? Could you tell then a little bit more about just the development of the brand in China. How many confessions you have in China alone and how do you think about the pace of distribution growth in China and just I guess longer term delevered in the market there? Thank you.

Well, the Fossil business in Asia is a relatively small part of business, smaller than would be in United States or in Europe. But it's showing very strong signs our life and a couple of our newest and most exciting stores actually are in the China region. One is in the Macau, (inaudible) it's actually one of the largest volume stores and probably the highest comp we have in the whole company. So we’re seeing some early lead there. There is a few other locations where we have concessions that we’re seeing strong response to as well. We also like you to know we opened a flagship store in (inaudible) Hong Kong we’ve opened in September doing extremely well, great visibility a lot of awareness and the numbers are pretty strong. So although the business is small in Asia and China, what we’re seeing I think is a very good sign. And as you know there is going to be hundreds or millions of people joined the middle class in China and they’re all going to be traveling all over the world. But most of those the growth in the middle class is not super rich, these are FOSSIL customer. So to start communicating to them the brand and showing our accessories offering and having them understand the lifestyle it’s early stage we think is very valuable.

Thank you. Our next question comes from the line of Omar Saad with ISI Group. Please go ahead.

Thank you. Good afternoon. Really good year guys, congratulations.

Thank you.

Wanted to ask on the wholesale business, it seems like both in North America and Europe you are having some really good gains there. I know some of it (inaudible) some of it have been replenishment, but you have to parse it out and maybe it different for Europe versus North America. We get to parse it out between just faster turnover of existing space versus maybe some of the departments are expanding their footprint in the watch category versus you guys are taking more share within the watch business in the wholesale channel I’d love to get some insight there, what’s driving in North America and Europe? Thanks.

Yes. I think actually Omar it’s probably all those things. So we’re in a really good position as part of our portfolio goes and our ability to gain share and to penetrate new markets, gain additional space we’re putting shopping shops around the world for all our brands and especially core. But all those things working together have put us in a position where I think we can have market share gains over the long-term in both Europe and the U.S. as we build into which is a much larger opportunity long term in Asia.

Thank you. Your next question comes from the line of Dorothy Lakner with Topeka Capital Markets. Please go ahead.

Thanks and good afternoon everyone, congratulations on the great quarter.

Thanks.

Great end for the year. I wondered if you could talk about Asia again and what you are looking in terms of concession growth in 2014. And just circling back also to Europe what your plans are for store expansion there?

Yes. I mean just quickly on the number. For next year, we are expecting probably somewhere in the high 30s of net concession openings. We’ll open some, we will close a few, but kind of rough math, where we would expect that to be in the high 30s.

Okay. Great thanks.

And I think you asked a question about store growth in Europe. And what we have -- it’s interesting what we've been opening mostly as a company over the last couple of years has been out of stores both in the U.S. and Europe, part of that was catch up from our big growth that we had over the last several years, we need additional outlet store space. But if you look at in the United States for example, by the end of this year, we will actually end this year the same number of regular price accessory stores [Technical Difficulty] at the end of 2011, which if you look at the traffic in United States it was actually a good thing that we started slowing down our store growth in U.S. based on the change in the consumer and so we’re in a very disruptive environment traffic in the malls with less people migrating them to omnichannel. We are starting to see some of the same clients in other parts world. So we are looking very closely at how many stores we’re opening, where we are putting them, we want to have brand building stores and very high traffic locations, especially in Asia where the brands are not known very well. We want to do the same for Scotland, but we are being very careful about where we are putting regular price stores for this year and the future.

Great, that’s good to hear.

Thank you. The next question is from the line of Anna Andreeva with Oppenheimer & Company. Please go ahead. Anna Andreeva - Oppenheimer & Company: Great, thanks so much and congrats on a solid quarter guys.

Thanks. Anna Andreeva - Oppenheimer & Company: Just a follow-up on North America, obviously impressive acceleration there, were there any timing shifts or was it all replenishment that came late in the quarter? And maybe talk about the near-term as we through ‘14 and the longer term growth algorithm there just what’s the expectation for FOSSIL brand versus licensees. You mentioned you still see opportunities for the FOSSIL brand, so maybe some color there? And how should we think about the impact of later Easter hurting your 1Q and benefiting 2Q? Thanks.

So, with respect to the fourth quarter on wholesale, what we experienced the times between Thanksgiving and sort of the first three weeks of December was actually pretty challenging, but it picked up at the end, I know that and we mentioned that on the prepared remarks that a lot of our partners were reasonably promotional there was matching of friends and families events and ultimately that drove some late quarter replenishments. Actually when we looked at the very last quarter of the year it came in stronger than we had anticipated, the first week of January actually a little weaker than anticipated. So, there may have been some timing moving between the first and fourth quarter, but it’s not an exact sign, so it’s difficult to predict. With respect to the timing on Easter, on the wholesale part of the business which remember is 75% of our business is wholesale, we're expecting that most of those orders would deliver towards the end of the first quarter. I mean there is always some risk of some a little slippage, but generally that's the way we're planning on it. The retail business again is the other 25% and not all of that 25% is really impacted by Easter. So, we're not anticipating a material impact on the end of the quarter growth rate this year to the Easter.

Thank you. Our next question is from the line of Oliver Chen with Citigroup. Please go ahead.

Hi, congratulations on a great close to the year. Regarding the plus 4% on the FOSSIL watches and jewelry brands, is that the run rate that we should expect for that? And what are the key drivers of the next step of product innovation within that FOSSIL brand? Also the DTC comp store sales, what are the parameters and timing from which we could see a better number or do you expect the comps to kind of continue in this negative range in the near-term?

On the FOSSIL question, we are expecting the brands to grow next year, that's our plan. The lion share of that growth where the larger rate should come from the international market, where the brand is less developed though we are planning to get good growth still out of the American region.

We also, Oliver as you know we had relatively weak year in handbags, which we think we're in a great position. We have some additional design resources within there for some months now and products getting much better and we think we have a big opportunity to gain share and somewhat of a dynamic market. I think that's globally well. So, we feel like we've got some great ideas in the pipeline to add more fuel in the powerful watches. So, we’re doing I think we can’t have the entire brand grow faster including doing right now some consumer insight and (inaudible) and doing research on how we can do some demand creation, how we can do some measurable advertising to our customers will really put in ourselves in a position where I think we can -- there is some really good research insight segmentation and good strong advertising digital social et cetera. I think we can turbocharge the brand in the next year or two.

Okay. And would you highlight any aspects of the product innovation in terms of what takes us further along, you already have such ops and share in North America in particular and we’ve had many years of really great growth. So, I am just curious about what we should prioritize for continuing to drive…

We don’t want to comment really on what is driving the sales or what new things are driving the marketplace. But as you always knew, you’ll be in the store (inaudible) look at that, we do have a lot of stuff in there that we’re very excited about and hopefully it’s going to really manifest itself from the sales increases in the near-term.

Thank you. Our next question is from the line of Randy Konik with Jefferies & Company. Please go ahead. Eddie Plank - Jefferies & Company: Hey thanks guys. This is Eddie Plank filling in for Randy. Just wondering how should we think about the Tory Burch line in terms of magnitude? Is this something that could be as meaningful as Michael Kors to the licensing business? Thanks.

Well to start off with, it’ll be very small. We’re going to have a very limited distribution to their doors in a very special number of proportion around the world, so it’s going to start small and it is started in the fourth quarter basically. And this is typically the way we start all of our brands, just starting small we don’t really push them or start expanding quickly until they’re ready for primetime when we see the operating model working we have a group of core sellers that are strong we can innovate within those familiar styles. And once we get the model going and we can more push it a little harder. But in the interim, we are just it’s more of an incubator business and we build from there, but just having look at the brand and its creativity it’s in a unique position, very strong over the world, leaves us to believe that it will be a significant business some day, doesn’t matter to us, when we are not going to push it outside it’s the boundaries early, but we do feel like long-term it will be very significant business. Eddie Plank - Jefferies & Company: Great, thank you.

Thank you. Our next question is from the line of John Kernan with Cowen & Company. Please go ahead. John Kernan - Cowen & Company: Hey guys thanks for taking my question and congrats on nice year.

Thanks. John Kernan - Cowen & Company: It seems to be a lot of noise about variable tag in the features of that category out there, haven’t really seen, I think people are wearing them any new -- on the logic that side of things that. But just wondering, how you guys think about the future of this and what you can participate I hope that you would direct it might be to you guys long-term?

Yes, it’s all very interesting, because we have made smart watches going back 10 years, but did not generate much interest. But we are -- the mindset that anything that attract the attention of the risk of good for us, there is a whole generation of consumers out there they haven’t watch. And as they see the verbiage on this and they see the awareness of it maybe one don’t inspire than worsen of our product. So, there is -- all this awareness combined with a lot of tech companies working on that. While the tech companies are, we are in dialog with them looking at what the next step is, for the combination in the conversion of consumer interest and brain power, there probably will be at some point, some compelling products that we can put in the marketplace and that's the worst studying we also think that and what we understand is in the future that some miniaturization components and also extended battery life it will make this product more compelling more fashion oriented so growing a process of working through there is nothing eminent that we’re putting out there, but we are watching very closely and we think it could be an opportunity at some point.

Thank you. Our next question is from the line of Scott Krasik with BB&T Capital Markets. Please go ahead. Scott Krasik - BB&T Capital Markets: Hi, thanks and congratulations guys.

Thanks. Scott Krasik - BB&T Capital Markets: If you look at the $228 million in jewelry sales this year, it was obviously up a lot but it’s a fraction of what your largest licensing partners that they thought jewelry could be plus you have Fossil and Armani and some others. Are we going to hit a point or the inflection point where the jewelry really starts to grow at a much faster rate; and how do you see that evolving?

As we’ve said before, we have been looking at jewelry as kind of an add on to our global multi brand watch business. So the reason we do that is because it’s the same brands and it also goes with same channels and jewelry has similar characteristics in terms of profitability, lead times et cetera. So it’s almost like watches that don’t tick. So it has the potential to just add it, makes the entire potential of the company even larger because the jewelry business is much larger than the watch business. And there has been a lot of reports in the last year that show that jewelry is becoming increasingly globally branded which fits right now in wheelhouse. So, we have actually been increasing our capabilities for jewelry, traditional resources, additional production capabilities and we’re continue to do so getting ourselves ready for what could be in the future a more significant growth. Of course Fossil is a very significant especially in Europe, SKAGEN is off to a strong start, of course it’s very, very strong and it’s going to be a very significant business long-term. Of course we have Armani which is a very powerful business and growing very quickly. So we could add additional brands as well. So we are in fact looking at that as a future. But you won’t I think significant rapid growth really accelerate too much this year, it’s probably in the follow on year. So, we are getting ready for it. Scott Krasik - BB&T Capital Markets: That's helpful. And then if I could sneak one more in quickly. Dennis, you talked about look to examining the capital structure in terms of how much leverage the business could take on to maybe buyback and even more meaningful amount of stock. Where are you in that analysis?

We're still -- we're in the middle of it. We're going to go through a more full strategic review during the year. And we're also working with outside consultants and just evaluating where we ultimately think the right position is in terms of the structure. We have as you we can tell from the activity this year, I think you can say that we have certainly embraced that debt has a significant place that it can play in our structure and we added debt this year and we were able to really enhance the share repurchase program. So, but right now, I would say as we said in the prepared remarks that wouldn't expect that we would be able to buyback to the same extent in 2013 as we're still going through that process in finding that optimal point.

Thank you. Our next question is from the line of Ike Boruchow with Sterne, Agee. Please go ahead.

Hi everyone. Congrats and thanks for taking my question. I guess on the U.S., on the North America wholesale side up 13%, can you just parse out the U.S. versus the non-U.S. portion of that growth? And then as a quick second one, the growth in Europe up 14%, still very strong, but relative to last quarter's 23%, I'm just trying to figure out what exactly did you see in Europe for the quarter, and then maybe of that 8% to 10% revenue guide, what are you planning the European wholesale business at? Thanks.

So, I mean, I don't have the break out on the North American business that you asked, but let me get to the European. We saw a strong performance sort of across the board in Europe. But that’s one of the things that really encourages us about the performance of that it’s very broad-based even more mature markets like Germany are continuing to grow, the UK was probably our strongest grower this quarter. So, we’re encouraged by that performance and we’ve got several of our brands that are really doing well. One of the strategies for next year is to really expand that so we can get the full potential of the portfolio really driving the business next year. And just the -- about 90% of the wholesale business in North America is U.S. based.

Okay. And then can you give an outlook for Europe?

We didn’t -- I think the way I would look at the outlook is if you look at the various regions, we’re expecting them to perform as you probably would naturally expect them to perform relative to their maturity. So the American business is our most developed market, so we would expect the lease in terms of growth rate and Europe and Asia would be higher than that.

Great. Thanks very much.

Thank you. Our next question is from the line of Rick Patel with Stephens. Please go ahead.

Good afternoon everyone, and I add my congrats as well.

Thanks.

A question on the leather business; at the end of the third quarter I think you had a new of new products flowing in but it seems that that category still underperformed. So I am curious if the new product at least performed as you expected? And as we think about 2014, is the bigger focus going to be developing the product to be trend right in full price stores or are you looking to scale your made for outlet handbags little bit more?

Yeah. I would say in the back half of the year the leathers did not meet our expectations and we were striving to have much better performance out of that. But I think what we’re showing in market now for fall is much, much better, we got the much better response to it. And we are in a kind of very competitive environment in handbags versus very hot brands out there and there is a lot of promotional activity on the bottom. We are positioned in the middle and in the right place I think for growth. We’re very important brand to our segment and to the accessories market and think we’re in great position to grow, and we’re looking forward to getting back to stronger business there.

Thank you.

Thank you. Our next question is from the line of Matt McClintock with Barclays Capital. Please go ahead.

Hi yes, thanks for taking my question. Kosta, earlier you were talking about omni-channel and the disruption there, I was wondering if you could actually -- do you have any idea or any sense of flow through from some of your wholesale partners, the strong e-commerce businesses that you it from your wholesale partners, how that's growing versus traditional brick and mortar stores and how do you actually work with your wholesale partners to better address that? Thank you.

Yes, I think that's a one thing that happened as the market is changing very quickly. Now I think we used to look at our own website as looking at how much sales and traffic we've got. And I think we changed our thought process. And really it should be looked at in terms of how can we facilitate online an omni-channel growth with all our partners because as a fact of the matter as you mentioned, all of our wholesales partners have had huge growth in all of our categories over the last several years and that's continuing. So I think that's -- customers definitely changing the way they shop and we’re doing everything we can to adjust to that as quickly as possible both on our own omni-channel efforts but also on our website using get to facilitate more growth to our wholesale partners. And that’s just not in United States, that’s also globally. So we’re working on a lot of fronts but we think it’s a very compelling opportunity.

Thank you. Our next question is from the line of Barbara Wyckoff with CLSA. Please go ahead.

Hi everybody I will add my congratulations. Can you talk about the outlets performance in FOSSIL versus Watch Station and other multi-branded outlets? If you could do O for the quarter, could you have done something differently to change the performance and are you thinking, rethinking your growth plans here? Thanks. And could you also, how many outlets do you have in China?

Well, I mean just with respect to the fourth quarter, obviously the most challenging part of our business was just operating through that very promotional environment here in the United States. As a brand we protect our brand integrity, we don’t promote to any significant extent in the full price stores, but we did use traffic to drive -- sorry use promotion to drive traffic into the outlet store. So we did see a better performance in the outlets here than we did in the full price stores, but still we would like to be in a position where it’s not just promotions that we are using to drive the traffic. Having said that, the outlets are very efficient used consumers of our capital and it’s a good investment for us. We have talked about the improvements that we are making and have made for lines. So, we still think that’s the good investment for us and the vast majority of our stores this year are going to be focused on outlets both here and overseas.

Barbara obviously the change in the market as consumers are gravitating to three things one is omnichannel less traffic in malls et cetera the other one is outlets and the third is probably retail, we have initiatives in place for all three of those. On the outlet side, our focus really is to improve the customer experience, which includes more -- a better design, build out, more products and we recently have hired a new Senior VP of Retail that have lot of experience in markets that's going to up our customer experience quite a bit. We think we benefit from that not just in the performance in the outlets, but just in the overall brand presence, which I think is very important looking at the way the customer shops today. So, I think we have a big opportunity I think to upgrade that customer experience in our outlet stores.

And in China I think the plan is to only open a couple of new stores outlet.

Will there be just in general, all of the outlets that are going to be opened are going to be more multi-brand or FOSSIL or both?

Both yes.

Okay. Thanks.

Thank you. Our next question is from the line of David Wu with Telsey Advisory Group. Please go ahead.

Hi, good afternoon everyone and congrats on the solid results. Can you perhaps talk about whether you're seeing any changes with respect to the way consumers are responding to various price points within the watch offering and how you are adjusting the assortment accordingly? And also, can you perhaps talk about sort of the evolution of the watch trends and what's resonating well with customers now and how you envision it sort of evolving in 2014? Thank you.

Well, as you know there is quite a lot of promotional activity in the month of December in all categories and it started to happen in watches. From our standpoint, it's unnecessary and I think the stores that were promotional saw a situation where it didn’t necessarily helped their sales and impact their margins. So, we're very strongly believing that’s a regular price business and we're doing everything we can as far as the stores we sell to focus more on great customer presentation and experience branding, innovation, new ideas and designs. And in terms of just overall watch trends in the business, the big macro trend is lifestyle brands like the ones in our portfolio telling great stories, great innovation, new products and compelling value that the marketplace is over a long-term going to gain share in a global marketplace for watches.

Thank you. Our next question is from the line of Simeon Siegel with Nomura Securities. Please go ahead.

Thanks. Congrats guys.

Thanks.

Have you said what percent of sales in Asia are driven by the concessions? And then Kosta, what was the change in regional structure that you referenced? And then just, I guess you guys were talking to a decline in margins for the year, can you speak to the long-term margin goals? Thanks.

Roughly -- I don’t have the numbers in front of me, but I think the concession business roughly maybe a quarter to three percent I’ll have to refine that with some numbers, I don’t have that number direct in front of me.

As you know we have been benchmarking much larger global multi-brand consumer product companies on how they go to market really looking at scalability for our own company. And as part of that effort what we’ve done is restructured the company and we’re instead of having the corporate office here in Dallas control everything globally as we have three regions with the strong regional offices in Switzerland, Hong Kong and in the U.S. So in our Dallas office we have a global office and also a regional office. So what we’ve done is the global guidance where we’ve empowered these regions to operate on their own within guidelines, but their own approvals to move faster and be more adaptive to the market. And this was from our research of looking at much larger global companies, this is how they are going lock lot of growth and we think it’s got huge potential for us. We have over the last several years in the regions of Asia and Europe especially hired a great amount of talent in every category from operations to merchandising, retail, concessions, visual presentation and great talent these markets. They understand clearly our model. So, there is a lot of alignment in the company about how we go to market and how we tell stories. And we think this is a great thing for the company to really empower them to move faster, and we definitely think they will have us grow faster in future.

Thank you. Our final question comes from the line of Dorothy Lakner with Topeka Capital Markets. Please go ahead.

Thanks my questions have been answered.

Thank you. There are no further questions at this time. I’d like to turn the conference over to Dennis Secor, Chief Financial Officer for closing remarks.

So, thank you for joining us today and for your interest in the Fossil Group. And we look forward to speaking with you when we hold our next conference call on the 13th of May.

Thank you, sir. Ladies and gentlemen, this does conclude the Fossil Q4 earnings conference call. Thank you very much for your participation. You may now disconnect.