Good day, ladies and gentlemen, and welcome to the lululemon athletica Q4 2013 Results Conference Call. [Operator Instructions] As a reminder, this conference call is being recorded. I would now like to introduce your host for today's conference, Steve Nikcus [ph], you may begin.

Good morning, everybody, and thank you for joining us on the fourth quarter 2013 conference call. A copy of today's press release is available on the Investors section of lululemon's website at www.lululemon.com, or furnished on Form 8-K with the SEC and available on the commission's website at sec.gov. Shortly after we end this morning, a recording of today's call will be available as a replay for 30 days on the Investors section of the website. Hosting our call today is Laurent Potdevin, the company's CEO; John Currie, the company's CFO. Tara Poseley, our Chief Product Officer, will also be available during the Q&A portion of the call. We would like to remind everybody that statements contained on this call, which are not historical facts, may be deemed to constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those projected in such statements due to a number of risks and uncertainties, all of which are described in the company's filings with the SEC. For today's call, we've got a limit of 1 hour. So please limit yourself to one question at a time to give others the opportunity to have their questions addressed. And with that, I will now turn it over to Laurent.

Good morning, everyone. When I spoke to you back in December, at the time of my announcement as CEO, I shared my excitement and enthusiasm about joining and leading such an exceptional brand and group of people. After now a couple of months under my belt, I'm even more inspired as I have started to discover the lululemon culture, the passion, the energy and the commitment of its people. I have worked with exceptional individuals and fantastic brands over the past 20 years, and the connection and engagement of the team at lululemon, both in the stores and here in Vancouver, is clearly unique. As we move into 2014, we are reflecting on our learnings with humility, and are entirely focused on our future. 2014 is an investment year, with an emphasis on strengthening our foundation, reigniting our product engine and accelerating sustainable and controlled global expansion. lululemon's magic has been dealt by creating technical, beautiful products and sharing our distinct culture with our community. The emotional connection that lululemon creates is at the very heart of what we stand for, and we are being relentless in our commitment to delivering a distinct and authentic experience for our guests that is unlike any other. lululemon is an originator brand, and we are refocusing our energy as a relevant disruptor in the space we created. It means being audacious, it means being curious, it means stretching our minds to invent the future and deliver the exceptional product that our guests are expecting from us. I plan to make sure all of our core values that make this business such a success remain in place and are leveraged and amplified, as we turn lululemon into a global brand for both men and women. Looking forward, I see significant potential to grow both…

Thank you, Laurent. I'll begin by reviewing the details of our fourth quarter of 2013, and then I'll update you on our outlook for the first quarter and the full year of fiscal 2014. For the fourth quarter, total net revenue rose 7.3%, to $521 million, from $485.5 million in the fourth quarter of 2012. The increase in revenue was driven by the addition of 43 net new corporate-owned stores since Q4 of 2012. Of those, 33 new stores are in the U.S., 2 stores in Canada, 4 stores in Australia and New Zealand, and 4 new ivivva stores. Direct-to-consumer sales, which increased by 24.9%, or $19.5 million, offset by comparable store sales decline of 2% on a constant dollar basis. And on a combined basis, including both physical stores and e-Commerce, our total comp increased 4% on a constant dollar basis. A weaker Canadian and Australian dollar, which had the effect of decreasing reported revenues by $13.4 million, or 2.6%. And finally, a reminder that there was an additional 53rd week, which contributed $26.2 million in total sales during the fourth quarter of 2012. During the quarter, we opened 4 corporate-owned lululemon stores in the U.S., 1 in Canada, 1 in New Zealand and 1 ivivva store. We ended the year with 254 total stores versus 211 1 year ago. There are 199 stores in our comp base, 39 of those in Canada, 129 in the United States, 23 in Australia and 8 ivivva. At the end of the year, we also have 69 showrooms in operation: 17 of them outside of North America, 2 in Australia, 6 in Asia and 9 in Europe. Corporate-owned stores represented 75.9% of total revenue or $395.2 million, versus 77.9% or $378 million in the fourth quarter of last year. Revenues from our…

[Operator Instructions] Our first question comes from the line of Anna Andreeva of Oppenheimer.

Great. I was hoping to understand some of the investments for '14. Maybe if you could talk about some of the buckets between the sourcing, marketing and international. And I guess, how permanent are those in nature? In other words, could we expect SG&A to be more in line with sales in '15? And then just a follow-up on comp guidance were flat for the first quarter, what does that imply for store comp? And is that what you guys are running currently? Do you need trends to accelerate to get there?

Okay, maybe I can take some of investment bucket dollar items. International, in 2013, the net negative was, I think, mid- to high-single-digit millions, that will probably be up $10 million and a little bit more in 2014. Compared to our run rate, I think, you'll see brands-related investments, $10 million to $15 million higher than you'd otherwise see. And then the other area, I'd say, quite a significant increase in the product and supply chain team cost. We built those teams significantly during 2013. So you got the run rate of those new hires and investments in 2014, as well as significant ongoing additions to those teams. So I'd say those are the primary buckets. Turning to the comp guidance. In Q1, the breakout of stores is low single-digit million -- sorry, low single-digit negative percent. And I think your question was how it progresses throughout the year, we do see store comp gradually improving from where we have it in Q1.

And our next question comes from the line of Adrienne Tennant of Janney Capital.

Laurent, my question is on the longer-term operating margin structure. Historically, we've thought about the business as a mid-20% margin business. As you've kind of explored and taken a look at the business, do you believe that, that is still the longer-term margin structure? And then what's your philosophy on, perhaps, more aggressive marketing and advertising? And then really quickly for John, can you just talk about the inventory? Obviously, at the end of the quarter, a little bit higher, the composition of it, and then when we should start to see that inventory kind of come down over the course of the year.

To answer your question. I mean, I think that long-term, I mean, our target is still to hit the mid-20s. Short term, we have an act to build our infrastructure internationally, which really hasn't been done both in Europe and in Asia. And we're going to be investing in brand, but I don't expect us to do large marketing investments. I mean, it's really a matter of amplifying what we do really well at the grassroot level and amplifying that through PR and through communication, but not going through expensive traditional marketing tools. So we're building the product engine. We are reigniting the product engine, both from a design standpoint, but also from a quality and sourcing standpoint. And we're investing to grow our international platform, which really has a lot of demand. But long term, we should be going back to those mid-20s number.

Yes. And I think, within that, I've always talked about sort of 55% gross, 25% operating margin. I mean, there could be some shift between gross and operating as we go forward. As we've been discussing, increasing our seasonal mix would probably mean product margin down a bit. But I think, the efficiencies that we're building in it will gain -- long term will bring gross margin back. As Laurent said, there's no reason to change our thinking about a mid-20s operating margin. Adrienne, in terms of your question on inventory composition, as I said, it's a little higher than we'd normally want to be at, but the excess is really in core. It's the product that we order on a continual monthly basis, and it's quite easy to just reduce future orders to bring that down to the right number of inventory turns. In terms of any kind of stragglers, seasonal -- or aged items, we're actually very clean, because whatever we've had seasonally, the guests have been buying very quickly. So we actually feel quite good about where the inventory stands.

Our next question comes from the line of Lindsay Drucker Mann of Goldman Sachs.

Laurent, I was hoping that you could talk a little more about the international rollout and how we should -- since you've already been seeding some of these markets and you probably have a pulse on brand awareness, how you're thinking about that strategy and how you plan to really convey the authentic grassroots lulu message as you roll that out?

Yes. I mean, having done that with a few brands in the past, I mean, that's what's critical to an international -- to the international building of a global brand, which is very different from a North American brand selling its product outside of the United States. It's to really build deep, local knowledge in those markets and having both local talent understand the lululemon secret magic. And what we've done in the past is that we've started taking up some of our key talent and decentralize them in the region, hoping they would learn the regions. And we're switching this mindset to really bring great local talent in the regions. And right now, the hiring and onboarding of our general manager in Asia is a great example of hiring the guy that knows the market and understand how to adapt lululemon, what's very unique to lululemon to a market, and ramp it up very quickly. So we've got Ken back in Asia looking at locations for us, and we'll be going through the same process in Europe. And in areas of the world where either the market is complex or maybe doesn't have the scale for us to have a direct presence, I mean, we'll be looking at partners. The Middle East might be a good example for that.

Okay. And then just a follow-up question on the investment you mentioned that you're making to enhance the in-store experience and in-store selling and learning more about your customer to improve selling. Can you give us some of the specifics, technology or otherwise, where you're planning to put money to work?

Yes, I think most of these investments right now relate -- [indiscernible] it's Laurent, at CRM and really thought of creating a seamless experience between online and brick-and-mortar and also sort of understanding our guests at a more micro level, so that we can have a more personalized experience with them.

Our next question comes from the line of Omar Saad from ISI Group.

Laurent, I wanted to ask you about some of the comments you made on your opening remarks. You mentioned voiceless for too long, taking back share of voice. And you also seemed to imply in one of your answers to one other question, the grassroots, sticking with the grassroots strategy rather than shifting or amplifying with more traditional kind of brand building. Help us understand what you meant by your comments. Why you're comfortable with the kind of existing marketing and brand-building strategies, especially given how much the brand has transformed over the last several years. Doesn't the brand-building strategy need to transform?

Well, I mean, when you think about -- when you go like -- when you go back 1 year, I mean, lululemon's made the headlines like every other weekend, has not participated in pretty much any of those discussions. And that was one of the largest findings, or one of the biggest findings that I discovered spending time here is that lululemon is an incredibly authentic brand. I mean, it's doing very unique, distinct, meaningful work in its communities. We have a set of 900 ambassadors that we support in North America, some outside of North America, that we just haven't given these people a voice. And I think that our grassroot strategy, our grassroot communication strategy has resonated incredibly well with people, but we need to amplify that. I don't think we really need to -- actually, we know we don't need to go to price or marketing strategy, but we need to take control about the discussion around lululemon, and really share more proudly and with humility who we are and what we stand for, which really differentiates us from everybody else.

Our next question comes from the line of Brian Tunick of JPMorgan.

Two questions. I guess, I know it changes season to season, but where should the seasonal product that you're talking about, Laurent, as a percentage of the business, run optimally? And what kind of supply chain and store work do you think the organization will need to quicken the lead times and inventory turns from already some of the industry best? And maybe for John, just on some store performance metrics. Can you talk about things that you're seeing from a regional perspective? Can you talk about Canada, the newer versus the older stores? Just trying to understand what's happening to the different class of stores over the last year.

Well, if I can talk briefly about product. I mean, it's a movie that I've seen before, either in the luxury industry or in the action sports industry. I mean, when a brand becomes really iconic and is centered around a staple product, its consumer evolves and so are their needs. And there is stronger and stronger demand for seasonal product. I mean, I think we need to really, really find the language that we use around core and seasonal. But our guests are clearly speaking for more freshness and more better products in our line. And our fast-turn pod are allowing us to do that short-term and tierized building global organization, both from a design but also from a merchandising and planning standpoint that will allow us to address these needs and address them with short lead time. So, Tara, you want to add anything to that or...

No, I think you articulated it well. I think that, again, roughly, probably about 50-50 for a seasonal to core product. But as Laurent is saying, our guest is really responding well to our seasonal product, and we're excited about that. And we are chasing into what we can for Q2, and making sure that in the back half of the year, we're getting that balance of core and seasonal nicely adjusted, and making sure that we are not running out so quickly in our beautiful seasonal product.

I think what's been really exciting is while we don't have the scale to make as much of that product as we'd like to and while our scarcity is a little too scarce, the response that we're getting for our product really validates the fact that we know how to answer our guests' needs.

And then your question on store performance. The factors impacting our store performance are impacting the entire market. I mean, the product assortment mix is across the board. Any impact of negative PR is across the board, and that's generally what we're seeing. I mean, a much smaller impact, I think, in things like weather. And the only reference point I have there when I look at the regions, where, even in Q4, we had double-digit positive comps -- L.A., Hawaii, South Texas, Florida, the Deep South region. So I think there's a little bit of weather impacting some regions more than others. In terms of new and old, again -- and I think, this is intuitive. The newer-age classes of stores seem to be less impacted than the older ones. I think that makes sense because in new regions, the guest is still establishing her core wardrobe. So the lack of newness is not as much an impact in these newer stores. And then even more so in terms of our new stores that are not in the comp base yet, they're performing actually well above our plan. And I think in terms of any way you want to measure new store performance, whether it's a percentage of the comp base productivity or just dollars per square foot, the new stores are actually performing quite strong. We've been 1,100 to 1,200 a square foot for the last couple of years, and it's actually edging above that. So that's a positive sign in these new regions.

Our next question comes from the line of Camilo Lyon of Canaccord.

I wanted to understand a little bit more about the expected improvement -- the gradual improvement in comps as we should expect them to improve in the back half. How do we income for that, the work that's being done on the supply chain will yield those results? And as we look to that, the back half comp trajectory improving, is there -- what can go better than expected? Is it more production from these incremental mills that are being added to the mix? Is it a faster -- is it faster shifting towards season products? Help us understand how we think -- how we could think about that improving incrementally as you go to the back half?

Maybe Tara can talk about the product mix part of it, and I can add some more boring numbers after she finishes.

So obviously, Q1 and Q2 were purchased about 8 to 9 months ago, starting in December-January timeframe. Seeing the guest response in Q4 to the seasonal product, really began looking at third and fourth quarter with the teams, looking at sell-throughs of current product, going back and adjusting the back half, getting the core inventories in line, shifting out receipts, taking a look at all of core for Q3 and Q4, and really understanding where we had opportunity to update. Because, quite frankly, it shouldn't matter whether it's core or if it's seasonal, I want to have beauty and technical in every single product that touches our floor. So that's why you'll see that gradual increase as you get into the back half of the year, as we get that core more in mind. We've been chasing into, even trying to chase into seasonal product in late Q2, getting more prints and textures in our bottoms, which have been trending very well. So, John, I don't know if there's anything else.

And in terms of the quarterly comp trends, remember, really starting Q2, where there's a significant impact of luon shortage last year, so we're going to be lapping that, as well as lapping delivery challenges and bad PR in the second half. So there's a lot of opportunity for positive comps over a weak second-half in 2013.

Great. And then just one follow-up for Laurent, if I could. Kind of following-up on a question asked earlier. Also mentioned a few times in your script was the word humility. And I was wondering, how do you plan to convey that to your consumers that might've been impacted by the PR issues of the last year?

I mean, I think, it starts with the guest experience. I think it's taking the time. I mean, obviously, we've reflected on last year and we've learned from last year, and we've done that -- eventually done that with humility. And I think, that lululemon is -- you go back to our mission, which is really elevating the world to greatness. And I think, to do that well, we need to be inclusive. This past year, we've stumbled a couple of times, and we had to be defensive. But I think we are very proud of what we do. We're going to talk about that with confidence. And we really -- one of our largest asset is clearly our educators on the floor, in our stores, and I've visited a lot of them in the past 2 months, and they are the most committed people to the lululemon brand. It's just empowering them to get back on their feet and speak about the brand, the product and who we are, what we stand for with confidence, humility, but really, with the mindset of making our guests right, listening to them and being inclusive.

Our next question comes from the line of Kimberly Greenberger of Morgan Stanley.

Laurent, I'm wondering if you can look out over the next 1, 2, 3 years, and just help us understand what a realistic level of acceleration and international store openings that we should be keeping in mind. And then you talked about, in your introductory remarks, some speed or flexibility in the supply chain. Maybe you could just help us understand a little bit better exactly what you have in mind there. And if 2 years from now you're successful in this initiative, how will your sourcing and supply chain be different than it is today?

Well, I can't really speak beyond 2014 at this point, but what I can tell you is that building the foundational work that we're doing both in Asia and Europe will allow us to accelerate that footprint. And I think we're going to evolve from a strategy of having a sequential approach to countries and regions. And building the foundation in both Europe and Asia will allow us to actually attack different regions in different countries, especially if you think about Western Europe at the same time. So I think that's where we're going to be able to see significant acceleration of building our footprint. And really sort of leveraging our showroom strategy, which has been successful in seeding and growing market, but doing that at a faster pace and simultaneously in different countries.

Our next question comes from the line of Jaime Katz of Morningstar.

I'm curious about what you guys are thinking about the evolution of the e-Commerce channel, as it becomes a bigger part of sales. Are there changes that you're making to make it easier and more friendly to adapt to new consumers?

Oh, I think we're looking at that constantly. I mean, especially as we sort of grow our product offering, as we grow our men's business and as we sort of start touching different regions. I mean, that our e-Commerce environment is really going to be a platform where we can engage the guest in much broader assortment. And, Tara, I bet you've got a lot of great ideas in achieving that, right?

Right. I mean, I think as we grow, I think our goal is having a e-Commerce site that will have the full breadth of our assortment. And then as you go into countries or regions of the United States, how we parcel that broader assortment up will be very related to the community, and what is the appropriate product in that community. And we're very excited about that going forward. And as you know, we've tested a lot of different capsules through the years. It's from tennis to golf. And as you think about going into southern markets or into warmer climates or even really amplifying Australia, what we can -- how we can mix these different capsules within our core and our seasonal product is really quite exciting to me.

Our next question comes from the line of Howard Tubin of RBC Capital Markets.

Maybe just another question, maybe from you, Tara, on kind of the capsules that you have planned for maybe this year, for spring and then into fall, without diverging too much. Do you -- will you continue to have kind of test the -- test new and small product categories over the next couple of seasons?

Absolutely. Obviously, I don't want to just play all of my cards, but definitely, I am a huge believer and advocate of the capsule. I think it's a great way to test new concepts. At the end of the day, I just want to bring extreme beauty and technical to every sport our guest does. And to me, that's exciting. We're going to keep experimenting with that. You can see our And Go collection that we launched. Probably you saw the press around that in spring. Fantastic guest response there. And you'll continue to see us experiment and grow that piece of the business.

And then maybe, Laurent, you mentioned growing the brand both for men and women. How are you viewing the men's business? And do you still think that in 2016 you'll have a separate standalone men's store?

Yes. I mean, actually, in -- we're looking this year at 3 locations that are going to be fully dedicated to men's: 1 in Miami, 1 in Vancouver...

Sorry. Actually, to clarify, there are going to be 3 locations that are going to be a much bigger footprint with an expanded men's selection within certain locations [ph].

Yes, correct. In Vancouver, Miami...

And Santa Monica.

And Santa Monica. And we're seeing -- I mean, we've done tremendous work on our product. I mean, our product is resonating with the guys incredibly well. I mean, I think we have a great opportunity to play with our brand identity and decline our brand identity in a way that's going to resonate better with the guys and attach more to their activities and what they want to do, and we're working on that right now.

Our next question comes from the line of Jim Duffy of Stifel.

Can I ask you to speak in more detail around where you are with the evolution of the supply chain? Are you happy with the quality control process? Where it is right now? Is the product flow now normalized, such as merchandise assortments are cohesive? And then, in more detail, what needs to happen to make the supply chain accommodate this shift to more seasonal product?

Okay. I think, throughout 2014, you'll continue to see us really build the foundation of our supply chain and sure that up. So I just -- I really want to stress that we're still continuing to build that muscle within the organization. From a quality standpoint, every stopgap's in place, so there will not be any bad quality getting to our customer, our guest. As you talk about the supply chain, one of the things that I've noticed coming into lululemon is that we have one go-to-market calendar, which is the 8 to 9 months calendar. In past companies -- and this what I'm going to be really focusing on, what I've felt is that I would have 3 distinct calendars: you have one managed more for the core, which might be slightly longer; then you have one that's more for the seasonal product, that is shorter end; and then you have a fast calendar. And so I think as this year, as we really fine-tune and get our main calendar strong, then we will begin, as we move into '15 and '16, to continue to sure up these 2 other tracks of bringing our product to the market.

Okay. Tara, are you happy with the product flow that you're seeing now? Clearly, your light on some of some the seasonal items, but are things hitting stores at the appropriate times?

Yes, definitely improvement over the last year. And really, right now, the result of -- it's not from fallout, it's just, again, we brought the product 9 months ago. And hindsight, to 2020, we would've invested more heavily in the product, so it wasn't running out so quickly in the seasonal.

Other than -- over the last 2 weeks, outside of our control, there's been a truckers' strike at the Port of Vancouver, so all of our Canadian product flows has been somewhat disrupted. But I understand that strike ended last night.

Okay. And the last question, I guess, it's for both John and Tara. On the supply chain, given that you're still in the very early innings here, it would seem see that perhaps, down the road, there's margin opportunity as you evolve the supply chain. Is that a illogical thought process?

That's exactly the way I think about it. As I said earlier, I think, appropriately, we're adding more newness and seasonality into our line that might deliver a lower product margin. But the efficiencies that we'll gain from the steps that Tara and Jennifer and their teams are making, we're going to see tremendous upside, again, longer-term, in terms of lower air freight, lower cost of cancellations, et cetera, and just a lot of efficiencies.

Our next question comes from the line of Matthew McClintock of Barclays.

I was just wondering, you highlighted a little bit -- you acknowledged some of the enhanced competition in your prepared remarks. And I was just wondering if you could talk about that, perhaps, for more of a seasonal category basis, and also more of a core category basis, what you're seeing from that perspective.

I think, we're certainly not the only game in town anymore. But as we get back to our roots, we're really focusing on innovation. I mean, I don't want to spend too much time worrying about our competitors. I mean, I certainly want to know what they're doing, it's a validation of the strength of our market and its global relevance and its growth in every single global market. But we're going to get back to what we do best, which is inventing the future and really focusing on the magic that is very unique to lululemon, which is combining beautiful, as well as technical innovation. So certainly, something that we are aware of, but something that we're going to look forward rather than over our shoulder.

Our next question comes from the line of Faye Landes of Cowen and Company.

This is Faye Landes of Cowen. Just hoping you can elaborate a little bit more on the international strategy. Laurent, you said you're going to -- in effect -- ultimately accelerate the international rollout, which is a bit of a change in the algorithm. Can you just talk to us about milestones that we should be looking for along the way as you do that? And also, can you address the issue of cost of real estate overseas, the current -- so the fact that you haven't opened stores in some markets like Hong Kong, where you've had a showroom for a very long time?

I think maybe I'll let John speak to that. But before I do that, I think that -- to go back to the international strategy. I mean, we've opened showrooms and we've worked in a very sequential way. So we opened showrooms, then we look at stores and then we look at buildings and stuff. And I think it really -- going back to what I said earlier, it really does not have to be a sequential process. I mean, the showrooms are really a good way to see the market. But at the time we open the showrooms, we need to get the right stuff on the ground and we need to start looking at locations and have a very clear time frame by which we'll be moving forward. So just working in parallel rather than in a stereo fashion will allow us to accelerate that in markets where we know we're going to have a presence.

In terms of international real estate, I mean, as you say, lots of regions, Hong Kong in particular, rent per-square-foot is extremely high. I mean, it's high in London as well. And we're setting our pricing, et cetera, to adjust for that. But when we look at Hong Kong, I think the reason that we've moved more slowly than we'd like is not simply sticker shock on the rent, I think as we move into different regions, we have to be a little bit flexible in terms of what our store looks like in those regions. And I think, that may be a shift in our mindset. If the 3,000-square-foot on one level isn't really available in Hong Kong, we have to look at what's the best type of store layout for lululemon in that market. And I think, that openness will help us accelerate.

And that's -- if I might add. I mean, that really -- that value comes with having the local deep expertise that we mentioned earlier, right? It's not how is Hong Kong going to adapt to lululemon, but how is lululemon is going to adapt to Hong Kong. And that's going to open a lot of doors to accelerate our international growth.

Our next question comes from the line of Dana Telsey of Telsey Advisory. I'm sorry, our next question comes from the line of Oliver Chen of Citigroup.

This is Nancy filling in for Oliver Chen. Can you give us a little more insight in terms of the in-store traffic and just decipher if it's recovered from the negative PR or where we are in that process? And then if you could talk a little bit about ivivva and the adjacent businesses like Luxtreme and how they are performing?

Okay, in terms of store traffic, I mean, our overall comp performance is basically traffic-driven as it has been in the past, so it's -- the negative has come from lower traffic. I mean, I wouldn't say that that's really rebounded, and that's reflected in my first quarter guidance, but we do expect some gradual improvement as the year progresses. In terms of ivivva, it kind of gets lost, but it's a real bright spot. ivivva comping double-digits, ended the year just under $900 a square foot. And as I think I've alluded to in the past, I mean, we're really putting our foot on the gas a bit on the rollout of ivivva stores. We ended the year with 12, and we'll add up to 10 in 2014.

Our next question comes from the line of Janet Kloppenburg of JJK Research.

I had a couple of questions. First, as far as the infrastructure building for international growth, will that pressure the SG&A line beyond 2014? And overall, the investment spending that you're talking about, will that carry into 2015? And, Tara, I was wondering if you could talk about your comfort level with the fashion assortments being aligned by the third quarter, and if that would mitigate the need for the air freight that -- the air freighting that you're now recurring? And John, if you could just talk to us about what your leverage point of SG&A is, that would help.

Okay. I think that was 4 questions, but we'll try to -- try and cover as many of them as we can. Your question about international investment and does that impact -- I think you said, does the impact SG&A going into 2015. Yes, that's absolutely true. Because -- and in fact, as we accelerate new store openings in Europe and Asia, initially, that will compress our margin. Of course, the faster we go, the faster we get to a point of leverage in those markets. But certainly, through 2015, the international rollout will be a negative in terms of the income and margin as you'd expect.

Okay. And overall SG&A leverage, John?

You know I always struggle with that question when we're in such a growth mode, because so much of what we're spending is discretionary. But in terms of the delta, I mean, low single-digit comps would leverage us normally. But again, there's so much going on beyond just the run rate that I just can't really give you a clear answer on that.

And I'm showing no further questions at this time. I'd like to hand it over back to Laurent for any closing remarks.

And I want to thank you all for your time this morning, and I really look forward to speaking and meeting with many of you over the course of this year and next month at our Analyst Day, and continuing this discussion on realizing our vision for lululemon's future growth. Thank you.

Ladies and gentlemen, thank you for participating in today's conference. This does conclude today's program. You may all disconnect. Have a great day, everyone.