Good morning and thank you for the Polo Ralph Lauren’s fourth quarter fiscal 2010 earnings conference call. (Operator Instructions) Now for opening remarks and introductions, I will turn the conference over to Mr. James Hurley. Please go ahead sir.

Thank you. Good morning everyone and thanks for joining us on Polo Ralph Lauren’s fourth quarter and full year fiscal 2010 conference call. The agenda for the call includes Roger Farah, our President and Chief Operating Officer, who will give you an overview of the quarter and comment on our broader strategic initiatives; and then Tracey Travis, our Chief Financial Officer, will provide operational and financial highlights from the fourth quarter, in addition to reviewing our initial expectations for fiscal 2011. After that, we will open the call up for your questions which we ask that you limit to one per caller. During today’s call we will be making some forward-looking statements within the meaning of the Federal Securities Laws including our financial outlook. Forward-looking statements are not guarantees and our actual results may differ materially from those expressed or implied in the forward-looking statements. Our expectations contain many risks and uncertainties. The principal risks and uncertainties that could cause our results to differ materially from our current expectations are detailed in our SEC filings. And with that, I’ll turn the call over to Roger.

Thank you Jim and good morning everyone. We’re pleased to be reporting outstanding fourth quarter and full year results this morning, results that exceeded our expectations on virtually every operating metric and that reflect significant broad based progress across products, channels and geographies. The year was filled with some tremendous milestones for our company, including major strides in our international growth objectives as we assumed direct control of important Asian operations; made considerable progress with our accessory development efforts, retailing our first watch collections and having our first market for Lauren handbags; and we prepared for the opening of several important flagship stores in key global markets. And in spite of this high level of reinvestment back into our company, we substantially improved our profitability with gross profit margins expanding 380 basis points to a record annual level of 58.2, and earnings growing 18%, all during a period of considerable global turbulence that represented some of the most challenging issues our industry has ever had to face. And our fiscal 2010 results are not a function of easy comparisons. They come on top of gross profit margin expansion and EPS growth in fiscal ’09, which was yet another outstanding year for us considering broader market conditions and our sustained level of investments back into our business. There is no question that this remarkable performance was, in fact, years in the making. It comes as a direct result of our selective investment in the consistent seeding and sequencing of our strategic growth initiatives, where we are leveraging efficiency gains in certain areas of the business to support growth opportunities in other areas; diversifying our operations on multiple levels in terms of brands, products, channel distribution and geography. Of course our results also reflect the strength of our brand, the desirability of…

Thank you Roger and good morning everyone. For the fourth quarter, consolidated net revenues were $1.3 billion or 9% above the prior year. The growth in revenues reflects strong, comparable store sales growth for the company’s retail segment; an extra 53rd week of sales due to our April 2nd fiscal year end; and incremental revenues from newly transitioned Asian operations that were partially offset by a modest decline in wholesale revenue. The net positive impact of currency translation on our reported revenue growth for the quarter was slightly below 2%. Excluding the 53rd week, which happened to be Easter week for us and represented approximately $70 million in sales, consolidated net revenues for the fourth quarter increased 3%. Our gross profit rate increased substantially, rising 720 basis points to a record 59%, reflecting disciplined inventory management; improved product mix across all channels; reduced markdowns in our retail stores; and continued supply chain savings. Operating expenses in the fourth quarter were approximately 4% greater than the prior year period. The higher operating expenses reflect the incremental costs associated with business expansion, including our newly transitioned Asian operations, as well as higher incentive compensation accrual. Operating income for the fourth quarter was $172 million, 58% better than the prior year period, when adjusting for fiscal 2009’s impairment and restructuring charges. Our operating income also showed considerable improvement, reaching 12.8% from an adjusted 8.9% in the fourth quarter of fiscal 2009. The improvement in operating income and margin rate is primarily attributable to the improved gross profit rate. Net income for the fourth quarter of fiscal 2010 increased 32% to $114 million from an adjusted $87 million in the prior year period. And net income per diluted share rose 31% to $1.13 from an adjusted $0.86 in the prior year period. The growth…

Yes ma’am. (Operator Instructions) Your first question comes from Omar Saad - Credit Suisse.

Roger, I wanted to ask you about the decision to accelerate kind of the SG&A investment in the business globally. You know, what gives you the confidence to do that now, especially given some of the speed bumps we’re seeing in Europe? And does that higher SG&A investment and capital investment, is it balanced globally? Is it more in Asia than Europe? Do you look at this as an opportunity to be investing in Europe, given the little bit of turmoil that we’re seeing over there?

Yes, it’s a good question, Omar, and before I answer it let me just say we know our prepared remarks have run a little longer because we had a lot to talk about, but it was year end. So we’ll try to stay on the call a little bit extra time to make sure we get in as many questions as we can. To specifically answer your question, Omar, I think you heard us talk about even in a difficult environment, we generated over $900 million of operating cash flow this year. So to bump up the capital from $200 million to $280 million, for us is still a very cautious statement about the use of funds, and we think is justified given our long-term strategies to develop two-thirds of our business outside the U.S. versus the approximately one-third it is now. In fact, you know Europe has its ups and downs and Asia has its ups and downs and so does the United States, to be fair. But the things we’re choosing to spend on, which are systems technology, infrastructure, logistics and distribution as a base, and then on top of that, shop in shops, freestanding stores or other direct-to-customer initiatives, we have to believe are the right long-term strategies to get at these opportunities. Do we try to move them around globally or sequence them a little bit differently, given our own point of view about the next two or three years in the market? The answer is yes. But I think you can count on us for the next couple of years to spend at higher levels of capital, with more than half of that going into the international markets. And given our track record, which says we have an ROI north of 30% consistently, I think we’ve done a good job of earning against those investments. So it’s going to take a little bit more than the current headwinds to slow us down meaningfully, but we’ll try to be thoughtful.

Your next question comes from Liz Dunn - Thomas Weisel Partners.

My question relates to the wholesale business. I guess when we spoke earlier in the quarter it seemed as though you were looking for some improvement in that business and a return to positive sales trends more for the holiday period, and it seems like that’s happening a little bit earlier. So can you just sort of add some context there and what you’re seeing?

Yes. I think that when we talked at the last call in February, I think we sequenced over the 12 months sort of what happened in the past and what we’re seeing going forward. It’s fair to say that our product has sold through well at retail and we continue to enjoy good market share gains this spring. So while the retailer is cautious, and I think has fallen a little bit in love with this lower inventory level improves their margin scenario, and I think they’re looking for manufacturers to be able to chase and react or replenishment a little bit more than up front buy than they did in the past, we are beginning to see some opportunities to get incremental wholesale business, somewhat offset by the currency exchanges that Tracey talked about. Because as you know, a lot of the wholesale business in Europe at least at the moment will be flying into a pretty significant exchange rate issue. But under the heading of worldwide reaction we’ve had terrific men’s business and we seem to be picking up share. The Lauren business has gained strength as we’ve gone through the year. We’re enjoying a good spring in kids. We’ve had tremendous growth in some of our new businesses like footwear and dresses, and that’s part of what’s giving us a good feeling about the Lauren handbag launch that’s being carefully done and will be available for sale in August. We’re all very anxious to see how the customer reacts to that product. We think it looks good, the retailer thinks it looks good, and they’re obviously buying several seasons out already. So we think that is an opportunity for us in a sort of non-comp wholesale business. So I think the retailer is cautious. I think they’re going to continue to look to speed up their inventory turns, but we are trying to maximize every opportunity where appropriate.

Your next question comes from Bob Drbul - Barclays Capital.

The question that I have is it’s also on the wholesale business but can you talk a little bit about the European wholesale segment versus domestic? And I was wondering if you’d be able to size up sort of the countries within the European business for you.

The biggest markets for us in Europe in a wholesale manner continue to be Italy, France, Germany and England. Spain which has been large has suffered with the very high reported 20% unemployment, although every time I go there they tell me that that’s not really the unemployment, that’s the published number. But nevertheless in rank order those would be the highest countries; France, UK, Germany, Italy and then Spain. And I would say from a performance point of view, France, UK, Germany have been the best performing countries with some of the southern tier markets being more difficult, including Spain. We don’t do that much business in Portugal, but Spain, Italy and some of the southern tiers. Some of that is the macro economic issues there and some of it recently, quite frankly, has been affected by this volcanic cloud which has dramatically altered the tourist patterns in Europe, both in and intra Europe, both people who were caught or who are concerned about being caught. So there’s a huge slowdown in the last month or six weeks based on that and tourist’s destinations. But fundamentally, the wholesale business again and a constant currency measurement is holding up nicely. We’re seeing increases in most of the core brands.

Your next question comes from Kate McShane – Citi.

In your guidance for the retail comps for the rest of the year, are you incorporating an increase in traffic or is it just a higher average dollar per transaction like you saw this quarter?

Our current comps and I think Tracey had touched on it or we’ve talked about it so much I thought she touched on it, are really seeing less footsteps quite frankly in our brick-and-mortar stores with a higher average sale and a higher conversion rate. So those customers that are coming in we’re converting more of them to a sale and we’re getting a higher sale from them. And we’ve modeled really until proven otherwise, that’s the rest of the year in the Ralph Lauren format. Club Monaco is experiencing higher traffic, higher conversion and higher average unit sale, and I think you could tell that in the 29 comp that we just reported on a comparable calendar basis is extraordinary. And that’s really just great product. We are seeing online increased traffic. It’s not really footsteps. I guess that’s not the vocabulary you use, but we are seeing growth in customer there and higher average unit sale. And I think that’s reflected in the 39% comp that we reported for online. The other piece of it, which you didn’t ask but I think is interesting is, the relatively small amount of crossover between the online shopper and the brick-and-mortar shopper. We continue to watch this carefully. We continue to try to educate ourselves about how this is unfolding. And while we’re learning a lot and it’s got a little bit of movement in it, it’s probably less than you would instinctively believe. The other piece of that that I find interesting is that about 25% of our traffic on the site is coming from international customers who are not able to shop but are going through the website for information and product knowledge, and that is giving us some encouragement for our launch later in the fall with e-commerce in Europe.

Your next question comes from Adrianne Shapira - Goldman Sachs.

Roger, you know, you just saw you reached a peak gross margin in the quarter and as you discussed we’re still seeing a value oriented customer; you’ve got some sourcing issues in the back half; and yet you’ve, you know, help us balance it out with the category opportunities, the geographic mix shift. How should we think about longer term where gross margins make sense as you stay relevant to an evolving customer and capitalize on markets and categories that potentially are more profitable?

Adrianne, I’m actually disappointed that your question wasn’t revolving around your trip to Paris and our new store opening. I was expecting an eyewitness report from you about the restaurant and the excitement of the opening. But nevertheless.

I was even in Shanghai, too.

Well, I won’t say you’re stalking us, but I was looking for a little more positive feedback from on the ground reporting. But let me answer your question. We have absolutely made a dramatic sea change in the way goods are sourced and moved around the globe. And we were just talking with our board the other day. In the last ten years we’ve raised our gross margins 950 basis points, so this is not really a one year spike to either a quarter record or an annual record, quite frankly. This has been a strategic weapon that we’ve had as a company year after year, brick after brick. And with the number of brands and the complexity and the 85 countries we ship to, this absolutely turned into a key differentiator. Having said that, last year because of the worldwide slowdown there were some unique opportunities in availability of production or raw materials or transportation that allowed us to accelerate the margin beyond even our plans or expectation. They are not a function of us raising prices; they really are a function of us elevating quality but managing cost of goods and then obviously the merchandising initiatives and planning initiatives help the sell throughs which reduce markdowns. So going forward, our belief is we are not looking to pass on cost of goods increase to the customer. We don’t think the market at this point is looking for that, particularly with customers still wanting to think about a value purchase. So we will be facing, as Tracey talked about, cost of good increases in raw materials and transportation more because capacity has been taken out of the marketplace. There are planes in the desert being mothballed and there are ships sitting idle, and so the ones that are working…

Your next question comes from David Glick - Buckingham Research.

Roger, a couple of category questions and then Tracey, a question on FX. It’s exciting to hear about the progress you’re making in women’s apparel, which I know has been a long haul and proving the business. I was wondering if you could give us a little more color on what’s driving that and roughly speaking, what the order book looks like. You’re seeing some increases in that business in the United States primarily. And then the home business we’re starting to see improvement in some other retailers and suppliers. I’m just curious what the challengers are there and the opportunities. And then Tracey, if you could help us on the flow through of your, it was helpful on the sales end but what type of operating margin flow through from that negative variance in sales due to currency should we expect? I mean typically your flow through seems to be lower than some of your industry peers. Should we assume maybe 5 to 10% flow through on earnings and also a little bit on your hedging strategies would be helpful.

Well, let me see if I can take the product issues and then Tracey can take FX and some of the rest of your extended questions. You know women’s as a category had been tough for a couple years as I think the female customer was bouncing back and forth between career and casual, and I think some of the sense of more women working at home needing less casual clothes, maybe not the fashion trends that stimulate buying. I think we’re beginning to feel that the women’s business is not only strengthening at retail, but across multiple price points. So whether it’s the higher end business or whether it’s the Lauren business or quite frankly for us, the Club Monaco business, you know, a product that’s a little sexier, a product that’s a little more feminine, a product that’s a little more novel; all of which seem to be getting a good reaction from the customer. Also, you know, the business which had migrated mostly to casual and denim, we’re seeing strengthening in more the wear to work product. Some of that’s coming through in dresses, where the woman has now for several years accepted the dress as a viable alternative. And some of that is coming through in more polished products. So you know we’re encouraged, because that’s a big business that the industry has struggled with. And although I think prices have been sharpened and I think there’s a real consciousness about value at any of those prices, you know, the glut of inventory is behind the industry; there is more product scarcity; I think that’s allowing people to command more original retails, and I think that’s all healthy. So as we head into fall and into the back half of the year, we are expecting that to continue. I’ve also seen some of the reports about the home trends that’s encouraging. That’s another business that has trailed for some number of years. Some of that is embedded in the housing starts and the problems in the mortgage markets. Some of it’s been those generally are bigger ticket decisions and those have been deferred. Some of the disruption in the market with some major retail chains going out of business and liquidating inventory, I think, have depressed that market. But I think as the channel has settled down and as the consumer has delayed purchasing, we’re beginning to see at retail some signs of that customer looking for some fresh fashion. Whether it’s freshening a master bedroom or whether it’s redoing a dining room or whether some of the firming in the real estate values is causing people to freshen their homes, we are seeing that begin to happen and we’re encouraged. I think we’d like to see more of it over a longer period of time, but for now, it does seem to be firming and that’s a good sign. Tracey, you want to?

Yes, and in terms of your question on the translation impact for the first quarter, you’re right, David, we typically don’t see 100% flow through. We’re seeing a little bit higher flow through this quarter and this year because of hedging results, which was your other question and I’ll talk about that in a moment. So about 50% of the sales decline from a rate standpoint would impact us on an operating income basis as it relates to foreign exchange. We also, I think as you’re probably aware, hedge a number of different things. The biggest thing that we hedge is inventory purchases and we hedge those anywhere between six and eight months out, primarily for our European business. But we also do hedge European product for our U.S. business. And given the rate that those hedges were taken out relative to where the euro was currently trading and what we expect to settle those transactions at, we also will have a transaction impact. So the foreign exchange flow through is impacted by that hedging the transaction impact as well as the translation impact.

Your next question comes from Michael Binetti – UBS.

Your comments on Japan were interesting. I think in recent quarters we heard you guys comment you might pursue more of an owned retail strategy in that environment if you didn’t see an improvement in the overall retail environment through your current distribution. It sounds like your comments today could mean you’re seeing sufficiently better trends at wholesale and the strategy may be shifting back a little bit in your minds towards focusing on maybe investing, you know, shifting that investment back to the department stores there. Is that a fair assumption? Is that how you guys are thinking about that market?

I think yes, with a little modification. I would say the following. Finding a key, I’m going to use the word flagship locations in the handful of key cities in Tokyo is extremely difficult, so those opportunities don’t come around every day and they’re not easy to find. But we do have our eyes and ears open for something that’s appropriate. We do believe in Japan we will have a network one day of our own specialty stores, but we’re trying to get our arms around the existing distribution network, the in shop presentations which as Tracey’s talked to you about the conversion into concession models really means we’re buying the goods; we’re staffing the stores; we’re outfitting the shops; and we’re responsible for the inventory. So we are learning daily about the Japanese customer through that network of hundreds of stores, and I think we will eventually take that learning and use it to complement our own network with that. Separately, perhaps a higher priority is our own network of stores in the Asia Pacific region, including China, Hong Kong and some of the countries where there is not a robust department store channel and we will have to build our own network of stores over time in order to get the infrastructure supported and the distribution that we’re desiring. So I would put it a little lower on the priority of freestanding stores in Asia Pac, and I would put it a little bit under the heading of learnings now that we’re running these businesses vertically in Japan until we translate that into store locations.

Your next question comes from Chi Lee - Morgan Stanley.

I just have a clarification question on the guidance. Tracey, it sounds like you’re looking for SG&A de-leverage in the first half, modest leverage in the back half. So is it fair to assume that what really gets us from what was closer to mid teens operating margin this year to a low double digit rate in fiscal ’11 would be primarily the gross margin compression you guys may be potentially looking for? And a related question is, are there any supply chain efficiencies or initiatives underway that we should be looking for that would incremental to the gross margin for fiscal ’11?

As it relates to the components of the P&L, yes, the primary portion of the [free] decline this year is gross profit. There is some de-leveraging full year as well from an SG&A standpoint, but the bulk of it is the gross profit decline. You know as it relates to the supply chain initiatives, I think Roger spoke well about the fact that we really maximized some unique conditions in fiscal 2010. In addition to some of the things that we had described probably three quarters ago that we had started in fiscal ‘9 related to our work with transportation operators that we work with in terms of consolidating shipments and really trying to manage more efficiency into the supply chain, shifting from air to ocean and continuing that process. So we really maximized a lot of that opportunity in fiscal 2010. Some opportunities for that in fiscal 2011, but not nearly to the extent that we saw in fiscal 2010.

Your next question comes from Christine Chen - Needham & Company, LLC. Christine Chen - Needham & Company, LLC: Wondering if you could talk about the product assortment in your concession shops in Japan and the rest of Asia. I know that when you had first taken over Japan you said it was highly concentrated in sportswear. Has that mix evolved since then? And what about in China and Hong Kong and Taiwan, etc.?

Okay. The concession assortments are really presented in a classification and category way, so we have a men’s Blue Label sportswear shop in a store, we may have a men’s Black Label sportswear shop in a store; we’ll have a women’s Blue Label shop in a store, maybe a women’s Black; we’ll have a kid’s concession store. So really unlike our own stores where we integrate and mix brands around Ralph’s vision, the department store business in Japan and Asia at the moment, and the concession locations, are very much one brand oriented. And then within that, they’ve been very much key items, basics and commodity items. So our first step in the process is really to represent a broader range of offerings and fashions in those categories. We will then try to get some of those shops repositioned to get better adjacencies to where the brand is today versus where it might have been ten years ago, when some of those locations were invested in. And we will try to add to that higher end products which traditionally have not been well represented in Japan or Asia Pacific in general. So it’s an upgrading of fashion content; it’s an upgrading of price points; we’re not going to walk away from the core items or the core basic, but we’ll give them slightly less visual representation and up the brand’s [clotion] of fashion and movement. I think we’ve felt that the business has looked a little static in that part of the world as licensees historically pursue the most simple product and the basic products. We’ll wrap around that over time ongoing efforts to elevate public relations and marketing, which we think are critical. One of the interesting facts that we received when Ralph and I and the rest of some of the senior management team were in Asia, is how consistently we heard customers there getting their brand and product information from the Internet. And so part of the connection for us in moving our brand in Asia over time will be the ability to communicate to the customer through the online experience. And I think that will be a high focus for us as we try to remix our brand face in that market and how to get that message out. You can get that message out online a lot faster than regional magazines or billboards or regional newspapers or any other media, so that’s an important learning for us as we try to go forward.

Your last question comes from Christopher Kim - J.P. Morgan.

My question is on your inventory strategy. You know, you mentioned that I guess the lack of inventory was a nice driver in terms of a lack of pricing resistance. With this double digit restocking trend in wholesale, wanted to get your views on pricing and what looks like the rising inventory environment. Any color I guess on where you have a little more direct control at retail and how you’re planning the business there would be great.

Okay, let me see if I can perhaps slightly reframe that. I believe that the last 18 months difficult environment has caused all retailers, whether they’re internal to Polo or whether they’re our wholesale partners, to be more cautious about inventory planning and to be focused on trying to sell through more at full price and turn the inventory faster. I think that is a piece of what every retailer today is looking to do. That then has to be coupled with appropriate sales planning, because if your sales exceed your plans, you’re going to be caught short of inventory and obviously if you miss sales you’re going to be hung with product that needs to be marked down. So I think what’s happening is, from point of manufacture to ordering to delivery, there’s a lot of pressure on the entire supply chain to be very precise about the level of inventory and the sell throughs. Our inventory, despite a sales increase, is down and another one of those facts that we sort of tumbled on to over the last ten years we’ve added $3 billion in sales and we only have increased inventory by $110 million at Polo Ralph Lauren. So that’s a startling piece of our management effort, that it only took us $110 million more inventory ten years later to add $3 billion of sales. So I think we’re all getting smarter, I think we’re all getting more demanding and I think we know that what we can’t do is give the customer excess inventory to pick through at discounted prices because based on her prior experience, if they continue to believe that’s possible, they’re going to wait and wait and wait until the products are marked down. So, I think our partners are being more careful, I think we’re being more careful, and I think that puts pressure on subjects like replenishment or chasing hot product, if it’s possible; if there’s raw materials and availability of production; but most of the wholesale models were not built on large amounts of that. So this is something that’s just beginning to evolve as perhaps a longer term trend, which will put pressure on the up front ordering and put more pressure on the supply chain to chase demand dictated by the customer. So at this point I appreciate it. I’m sorry to have run 15 minutes late. I just thought the fourth quarter and the full year deserved a little fulsome conversation. Hope we’ve had a chance to answer all your questions. Thank you for your support. If you’ve got follow up questions, Jim and Tracey can attempt to answer them during the day. It’s been an incredible year for us. We’re very proud of it and the results we achieved, and we’re very mindful of what the next 12 months hold for us in terms of challenges. So, thank you for listening.

That concludes today’s conference. Thank you for your participation.