Good morning, and thank you for calling the Ralph Lauren's Fourth Quarter Fiscal 2012 Earnings Conference Call. As a reminder, today's conference is being recorded. [Operator Instructions] Now for opening remarks and introductions, I will turn the conference over to Mr. James Hurley. Please go ahead, sir.

Good morning, and thank you for joining us on Ralph Lauren's fourth quarter and full year fiscal '12 conference call. The agenda for today's call includes Roger Farah, our President and Chief Operating Officer, who will give you an overview of the year and comment on our broader strategic initiatives; Jacki Nemerov, our Executive Vice President, will provide some product commentary; and 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 '13. 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 now I'd like to turn the call over to Roger.

Thank you, Jim, and good morning, everyone. We are pleased to be reporting exceptional fourth quarter and full fiscal '12 results this morning. For the full year, our sales increased 21% to nearly $9 billion, reflecting -- $7 billion, excuse me, I'm already excited, reflecting excellent growth across our major channels of distribution and geographic regions. We achieved record level operating earnings of over $1 billion, a function of our strong sales growth and our ability to leverage expenses even as we continue to make substantial investments to support our long-term growth objectives. Diluted EPS rose 24% for the year, which is an acceleration from the low-teens compounded growth we delivered in the prior 3 years. We ended fiscal '12 with $1.3 billion in cash and investments. In recognition of our strong performance, liquidity metrics and comfort with our long-term plans and projections, our Board of Directors recently authorized the doubling of our cash dividend to $1.60 a share annually. This is the third 100% increase in the quarterly cash dividend in as many years and is a clear demonstration of our company's commitment to enhance shareholder returns. As strong as our operating performance was for fiscal 2012, let's not forget that we started the year facing some formidable headwinds. Every year has its own unique set of challenges at the onset. Some of that is purposeful and strategic and some of that are a function of external realities. At the beginning of fiscal '12, we were contending with considerable political and social uncertainty in Europe and the Middle East; the aftermath of the devastating earthquake and tsunami in Japan; and most significantly of all, we faced an unprecedented spike in our cost of goods. We managed through these external factors thoughtfully while staying focused on our long-term growth objectives…

Thank you, Roger, and good morning, everyone. Fiscal 2012 was a tremendous year for us. The allure of our brand and the impact of our merchandising initiatives drove strong global sales growth, including mid-teens expansion in our largest market, North America. This exceptional performance was supported by momentum in even our most core product categories where we have long dominated. We also saw excellent traction in the emerging accessories and denim categories. The strength of our sales performance is supported by disciplined merchandising, planning and allocation strategies that, combined with our brand leadership, generated strong profitability for the company and our wholesale partners. Our market share gains in men's and children's worldwide is a testament to our commitment to innovation. The constant evolution of our assortments to include a broader range of products and lifestyle sensitivity gives existing customers something fresh and attracts new customers to the world of Ralph Lauren. In women's, the spring/summer Live in Color merchandising and marketing program for the Lauren Lifestyle brand is a beautiful and highly coordinated expression of a brand-right and trend-right statement. As a result, we are experiencing very strong performance across sportswear, dresses, accessories and footwear. In fiscal 2012, we made a major commitment to growing our presence in the denim arena across multiple customer segments. For our most premium customers, we introduced Black Label denim for men in our own stores and select specialty stores worldwide. This not only added a compelling new dimension for the current Black Label customer, but it's also attracted a new customer to the brand. We look forward to building on our early success with additional points of global distribution in the near future. In addition, we introduced Denim & Supply last fall. In the last 6 months of the year, we opened or converted…

Thank you, Jacki, and good morning, everyone. As Roger highlighted earlier, we reported excellent fourth quarter and full year operating results. We achieved this performance while managing extraordinary cost inflation and meaningful investment in our long-term growth initiatives, including the integration of formally licensed South Korea and home textile operations; the global fall launch of Denim & Supply; the continued expansion of our international e-commerce capabilities; and commencing a major repositioning of our distribution network in Greater China through exiting the balance of what amounts to 95 total shop and store locations. We ended the year with record sales and profits, and we achieved progress on all of our strategic initiatives. With respect to the fourth quarter, consolidated net revenues were $1.6 billion, 14% greater than the prior year period and in line with our expectations. We achieved double-digit growth in all of our major geographies and across both our wholesale and retail segments in the quarter. The gross profit margin of 57.1% was 30 basis points higher than the prior year period and better than we expected. The improvement to the prior year was primarily a function of favorable channel and product mix that more than offset the net impact of cost of goods inflation in the quarter. Operating expenses rose 14% to $790 million in the quarter, and the operating expense margin of 48.7% was modestly above the prior year period. The increase in operating expenses was primarily a function of our sales growth and the mix of overall business growth, specifically higher retail segment growth, which maintains a higher expense structure than our other business segments. We also had incremental costs associated with the assumption of our home textile operations and shifting in timing of some corporate expenses that we discussed with you on our third quarter…

[Operator Instructions] We'll go first to Omar Saad with ISI Group.

I was hoping, Roger and team, you guys could give a little bit more detail on kind of what you're seeing in Europe and how you're thinking about it, near term and long term, especially in the context of several other high-profile companies reporting a significant slowdown there and your guidance for flat to down wholesale growth, how you're thinking about the consumer spending environment, the macro, your opportunity kind of to offset that through retail -- own retail growth, additional distribution on the wholesale side either doors and/or categories and then how you're thinking about the tourism piece as well. Is there a benefit there as the brand continues to grow globally?

Omar, I know we ran a little long with our "end of the year presentation", but that's a pretty long question. Let me see if I can talk about Europe broadly and then hit on some of the specifics you touched on. If I miss some of them, I apologize. We reported extraordinary results last year, 26%, and we really saw that across all strategies: retail, wholesale, across almost all of the countries. We had double-digit growth in France, Germany, Spain, the U.K., Scandinavia and others. I think what you've heard from us today and what you've heard from other people is that the ongoing overhang of economic uncertainties in Europe, which have been now prominent in the press, pretty hot and heavy since the middle of last fall straight through the spring are weighing on the customer's mind. And I think that's true of the local customers by country and to some degree, that's been masked by the tourist business in many of the key capitals. Depending on the brands that you're talking about, if you have a high penetration of Chinese tourists visiting the major capitals of Paris or London or Switzerland or Milan, that has inflated, I think, the European results. We don't happen to have, based on our small penetration in China, we don't happen to have that kind of Chinese tourists running through our European operations. While we do get a high degree of tourism, our major tourists are coming from the Middle East or Russia where we have strong presences, and then they find us in other European cities. So we think over time as we build our Chinese presence and we talked today about the 60 stores we plan on opening over the next 3 years, 15 in the back half of this…

[Operator Instructions] We'll go next to Adrianne Shapira with Goldman Sachs.

Roger, you've proven that you do better when you're in control. We saw that in the '08, '09 downturn. And so with this clear ongoing shift to retail, my question is really twofold: one, as it relates to sales, help us think about how you're planning with wholesale down low singles versus retail up low doubles, how much of that is self-imposed as you shift to more retail; and then the second part of the question, how it relates to profitability. As you mentioned, productivity per square foot is accelerating. So how do we think about this mix shift impacting overall profitability?

Yes, Adrianne, I mean we've operated under the belief consistent with what you just said that whether it's controlling a license or controlling a region that our commitment to doing it right over the long term has paid off. The shift in distribution channel from wholesale to retail or concession shops, primarily in Asia to owned, I think has served us well in terms of communicating to the customer in its purest way. And so I think you saw comp stores last year that were extraordinary at 14%, on top of the year before that of 10% and years and years of compounding have given us very high sales productivity. That, in turn, has given us very strong profitability in retail. Those of you who have followed our story for a long time know that we started from a very low point and we've made a pretty amazing progress. Our point of view is that in Asia particularly, where there's not an appropriate or robust distribution channel, our future depends on our ability to run our shop-in-shops or run direct retail. Now the margins in retail, even at the high levels we're at today where our hopes of getting them higher are not quite as high as our wholesale margins, which are extraordinary. The inventories will turn slower. There'll be capital involved, but we believe over the long haul, our ability to take our message directly to the customer in brick-and-mortar or e-commerce really is the foundation of our future growth. The other issue, which I'll just mention, and I think you all know this, but as cost of goods begin to improve and inbound receipts begin to return to a more normalized level, we're very pleased with our decision a year ago not to change the quality and not to change our sourcing strategy, and I think the customer reacted to that quality. But those inbound receipts come in and turn faster in our wholesale segment where the margins will begin to recover sooner. In retail where the inventory turns slower, it's a combination of the on hand and the new receipts. And as they turn through the year, the margin will begin to rise. So the rate of margin improvement cycles through different at wholesale and retail because it's not the inbound receipt that's driving margin. It's the margin on what you sell. So if the wholesale goods are turning 5 or 6 or 7x a year and retail's turning 2 or 3 or 4 depending on the format, the wholesale margins will recover faster followed by the retail margin. So that's an important nuance to the way the year lays out.

We'll go next to Liz Dunn with Macquarie.

I guess I'm wondering about your sort of awareness with the Chinese customer, the consumer. Is the reason that you don't have as much of that business in Europe just that the business hasn't been positioned well there? And what -- other than just distribution in China and getting the right locations, what other steps are you taking to increase your awareness with the Chinese consumer?

Okay, Liz. The reality is that we had a licensee that was based in Hong Kong for many, many years. And with that, his focus was on Hong Kong, Taiwan, Singapore, Malaysia and had very little distribution in Ralph Lauren products in China proper. What he did have was positioned as a casual sportswear brand primarily for men in B- and C-type locations. So our brand awareness over the last 10 or 15 years and the quality impression of our brand is very different than the way we see it here in the United States and Europe. So as those customers travel, they're looking for the brands that they have learned over the last 10 or 15 years signify quality and heritage, and their knowledge of our brand is much lower and incomplete. So we believe that not only will that grow business in China as we have the right kind of stores, but as we expose the customer through the store experiences, through marketing or through future Internet activities, they will then look for the brand when they travel around the world. Today, many of the luxury brands are reporting European sales of 25%, 30% or 40% to Chinese. Our Chinese tourist business in Europe is less than 2%. So we believe that we'll get the multiplier effect as we push out in China over the next 3 to 5 years.

We'll go next to Christian Buss with Credit Suisse. Christian Buss - Crédit Suisse AG, Research Division: Yes, I was wondering if you could talk a little bit about the cadence of incremental investments over the balance of the year? Can you help us understand how you're planning to roll out some of the investments that you're talking about now?

Okay, well, let me break the investments into a couple buckets. The primary international investments are being made in Asia and I think I said earlier that the bulk of the 15 stores that are being opened in China will be in the back end. That doesn't mean we're not spending money in the front half. So the opening date is really the culmination of the spending. So in that case, back-side openings will be front-side spending. The ongoing investments in the Internet are really 12 months of the year whether that's distribution and logistics here in the United States or the ramp-up in building as we go to a full launch in Japan. So that's spending in advance of the revenue will be for the first 9 months. Separately, the ongoing investments in technology, infrastructure and systems is really a 12-month cycle and should be evenly spread through the year. So I guess the sum of all that is more investment spending in the early part of the year culminating with openings or launching in the fall, and we get the revenue in the back half of the year.

We'll go next to Jeff Klinefelter with Piper Jaffray.

Just curious, a little bit more color on the domestic business, the wholesale business, given the strong spring we had in the industry, the apparent interest in color, which seems to play very well into your brand -- your brands. Wondering, puts and takes kind of, Roger, by category. You have some new categories that are gaining distribution. What about kind of the organic or heritage categories? Any movement in the number of doors that you're in or floor space would be helpful.

Okay, Jeff. I would say that you're correct. We've had a very strong domestic performance with our wholesale partners at their retail. And putting aside the way Easter falls within our fiscal reporting because, as you know, the March, April time period for us is split between fourth quarter and first quarter. For most other people, not. We've enjoyed our strongest businesses this spring in our heritage and core businesses like men's. That's had a very strong spring. The children's business has had a strong spring. Lauren has begun to perform better in sportswear, but we've had a very strong business in dresses. Jacki talked about accessory and footwear. So we're really seeing broad-based strength in the performance of our products at retail. The domestic retailer continues to operate with a mindset towards conservatism in terms of inventory and turn, but nevertheless, we've had a strong spring. As you mentioned, color plays well for us as a brand. And I really do believe, based on our last couple of experiences with Olympic products, it will be a very exciting lead up through the August Olympics. So we think domestically, we are well positioned in the core product categories. Denim & Supply, it's the first spring we're in the market. We have added to the distribution of our handbag and accessory businesses, so those are beginning to roll out. I think Jacki quoted a doubling of the doors in our handbag and accessories from this time last year. We're also beginning to see traction in our ownership of the home business. I think our partnerships with the department stores and their confidence in the way we've taken licenses and repositioned them, I think people are beginning to get excited about the opportunities at home here in the domestic market. So lots of good things in the core, and the new businesses are beginning to get traction and door count.

We'll go next to Faye Landes with Consumer Edge Research.

Two quick questions, one more technical. But the first as follows: first of all, Roger, you've spoken before of volatility in -- relative volatility quarter-to-quarter -- week-to-week, rather, in your U.S. retail especially in gateway cities and in flagship stores. You've talked about that in the last several calls. I was hoping you could address that. And then the more technical question is it appears that you've bought back few, if any, shares in this quarter and I was hoping you could address that given your general enthusiasm for the share buyback.

Okay, Faye. I'll start with the week-to-week. The predictability of the trend lines really post the recession has been different than probably prerecession. The consumer mentality, I think, in the last 2 years while in aggregate has been spectacular, I think they're more careful about their spending. I think they're more selective. I think they're looking for great product, but maybe the great piece or the great item or the great accessory. I do believe they're buying close to the need. So some of the weather patterns has affected the business. It was spectacularly warm earlier in the year and then it got cold, and I think the customer has exhibited a sensitivity to that, that we probably didn't see before. The other part of your question is the gateway cities where the United States has seen important tourist activities, where Florida was particularly hurt during the recession. It has come back and some of that has been fueled by the tremendous tourist business from the Brazilians. When we track by country where our international tourist business is here in the United States, the Brazilians rank very, very high, not only in Florida but in New York. So we see tourism not only affecting the travel patterns and the shopping in Europe. We see it here in the United States. The more technical part of your question, which is our strategy to return excess capital to the shareholder. As we've talked about in the past, Tracey and I have said our first priority is investing back into our business if we think we can get a return, and I think we've done that well over the years and we expect to do that into the new year and beyond. Our second alternative, assuming we've done that properly, is to take excess cash and return it to shareholders either through dividends or share buyback. And I think you've seen, as our cash flows have grown over the last couple years, we've done that pretty aggressively. I think today's announcement to double the dividend again, third year in a row we've doubled the dividend, I think, reinforces our commitment to return money to shareholders in the most efficient way we think is appropriate. And I think you'll see in fiscal '13 a combination of this more aggressive dividend and share repurchase going back to the shareholder if we don't have a proper use for it. We're clearly holding a lot of cash in our balance sheet. We have very little debt. We did that proactively through the recession. At this point, with early reads on interest rates staying low for a long time, my guess is we'll look to return excess capital to the shareholders both ways throughout the year.

We'll take our final question from Barbara Wyckoff with CLSA. Barbara Wyckoff - Credit Agricole Securities (USA) Inc., Research Division: Can you talk about the accessory penetration, where can it go over time? And also opportunities in categories outside of handbags and small leather goods.

Okay, Barbara. We don't quote percentages, but I would say that whether we're talking about the Ralph Lauren level of accessories or whether we're talking about a Lauren or Polo level of accessories, the company is putting a lot of time, energy and money to distort those categories. We've clearly developed multiple tiers and multiple channels for our apparel, but we're very focused on the right distribution in product and accessories. Then the question always becomes how do you to define accessories? Does that include eyewear, and does that include watches and jewelry and handbags, small leather goods, belts, scarves? Interestingly, because I know, Barbara, you go in the store up the street on 72nd, we devoted the entire main floor to our accessory area, which for us is a future direction but does not read the same way in many of our former stores. Some of the real strong categories there have been the belts, scarves and footwear, things that in the past don't seem to get the same kind of attention that perhaps handbags and small leather goods go to. So we're finding the customer has a real appetite for Ralph's design sensibility across all product categories. And, of course, we're in the early stages of developing watches, which, if you travel the world, has been one of the strongest growth categories for luxury companies everywhere. And while that's a long process to do that, we have some spectacular watches that are beginning to get traction with the largest single store in the world for us in watches being Macau. And I think that gives you a sense of the upside to some of these product categories as we reinforce that with our commitment to the Asian market. So with that, operator, I apologize. We've run a little late. It was the end of year, and I thought it deserved a little extra attention in the prepared remarks. Just a spectacular year on every level. We started the year with some concerns as we do again this year, but it was a spectacular year. I think the team really maximized the opportunity in the Ralph Lauren brand in the Ralph Lauren way, and we're excited about the new year. So we thank you for your interest and your attention. We look forward to updating you in August. Thank you.

And that concludes today's conference. We thank you for your participation.