Good day, and welcome to this Coach Conference Call. Today's call is being recorded. At this time, all participants have been placed in a listen-only mode and the floor will be open for your questions following the presentation. [Operator Instructions] At this time, for opening remarks and introductions, I would like to turn the call over to Global Head of Investor Relations and Corporate Communications at Coach, Andrea Shaw Resnick. Please go ahead.

Good morning, and thank you for joining us. With me today to discuss our quarterly and annual results are Victor Luis, Coach, Inc.'s Chief Executive Officer; and Kevin Wills, Coach's CFO. Before we begin, we must point out that this conference call will involve certain forward-looking statements, including projections for our business in the current or future quarters or fiscal years. These statements are based upon a number of continuing assumptions. Future results may differ materially from our current expectations based upon a number of important factors, including risks and uncertainties such as our ability to achieve intended benefits, cost savings and synergies from the Stuart Weitzman and Kate Spade acquisitions; expected economic trends and our ability to anticipate consumer preferences, control costs, successfully execute our transformation and operational efficiency initiatives and growth strategies. Please refer to our latest annual report on Form 10-K and our other filings with the Securities and Exchange Commission for a complete list of risks and important factors. Please note that historical trends may not be indicative of future performance. Also, certain financial information and metrics that will be discussed today will be presented on a non-GAAP basis. These non-GAAP measures exclude certain items related to our transformation plan, operational efficiency plan and Stuart Weitzman's acquisition-related charges and Kate Spade acquisition-related charges, as well as the impact of foreign currency fluctuations were noted The company's sales and earnings per diluted share comparison for fiscal 2016 have also been presented both including and excluding the impact of the 53rd week in fiscal 2016. You may identify these non-GAAP measures by the terms non-GAAP, constant currency or excluding the additional week. The company believes that presenting these non-GAAP measures is useful for investors and others in evaluating the company's ongoing operations and financial results against historical performance, and in a manner that is consistent with management's evaluation of the business. You may find the corresponding GAAP financial information or metric as well as a related reconciliation on our website, www.coach.com/investors, and then viewing the earnings release posted today. Now let me outline the speakers and topics for this conference call. Victor Luis will provide an overall summary of our fourth fiscal quarter and full year 2017 results and will also discuss our progress and global initiatives across the market. Kevin Wills will continue to details of financial and operational results and our outlook for fiscal year 2018, following that we will hold the question-and-answer session where we will be joined Todd Kahn, President and Chief Administrative Officer and Secretary and Joshua Schulman, President and CEO of the Coach Brand. This Q&A session will end shortly before 9:30 AM. We will then conclude with some brief summary remarks. I'd now like to introduce Victor Luis, Coach Inc’s CEO.

Good morning. Thank you, Andrea, and welcome, everyone. As noted in our press release, we are pleased with our solid fourth quarter performance in which we achieved positive North America Coach Brands comparable store sales growth for the fifth consecutive quarter and drove double-digit growth on a comparable weeks basis at Stuart Weitzman. These results capped an excellent year as we continue to make progress on our transformation plan, delivered strong Coach Brand International growth notably in Europe and Mainland China, while driving operating margin expansion and double-digit net income and EPS gains on a comparable 52 week basis. Importantly, the Coach Brand continues to gain fashion relevance, while our [audio break] with Selena Gomez brings our [audio break] and message to broader audiences. We were also very pleased with the overall contribution of Stuart Weitzman as we invested in the brand both to doors and most significantly in people. We now have the key leadership and design talent to drive long-term performance both in growing the global footwear category and in Stuart Weitzman’s nascent accessories business. And as you know, we also took a major step in our corporate transformation with the acquisition of Kate Spade & Company which closed in July, becoming the first New York based house of modern luxury lifestyle brands. Kate Spade brings a unique brand attitude and additional consumer segments to the Coach, Inc. portfolio. We expect that this acquisition will enhance our position in the attractive and growing 80 billion global premium handbag and accessories footwear and outerwear market. After the last three years of our transformation and acquisitions, the three brands of Coach, Inc. are today united in a common philosophy, first, driven by brand led strategies that focus on the consumer and on an inclusive approach to luxury; second, a focus…

Thanks, Victor. Victor has just taken you through the highlighting strategies. Let me now take you through some of the important financial details of our fourth quarter results, as well as our outlook for fiscal year 2018. Please note the comments I'm about to make are based on non-GAAP results, corresponding GAAP results, as well as a related reconciliation can be found in the earnings release posted on our website today. Now turning to the details and focusing on Coach Inc. Net sales totalled $1.13 billion for the fourth fiscal quarter, as compared to $1.15 billion in the prior year, excluding the additional week included in fiscal 2016 results, net sales increased 6% on a reported basis and 7% on a constant currency basis. For the year, net sales totalled $4.4 9 billion even with the prior year, excluding the additional week included in fiscal 2016 results, net sales increased 2% on both a reported and constant currency basis. As planned, the company's strategic decision to elevate the Coach Brand’s positioning in the North American wholesale channel through a reduction in promotional events and/or closures negatively impacted sales growth by approximately 60 basis points and 150 basis points in the fourth quarter in fiscal year 2017 respectively. Gross profit in fourth quarter totalled [Technical Difficulty] while the gross margin rate for the quarter was 66.8% compared to 67.8% last year. As expected, we experienced a year-over-year decline in gross margin in the quarter, specifically channel mix which was a benefit in the first nine months of the year negatively impacted gross margin in the quarter. In addition, as we're now anniversary lower product cost this benefit did not fully offset the ongoing negative impact resulting from promotional activity, notably the North America outlet channel, where the environment remains very competitive.…

[Operator Instructions] Our first question comes from Christian Buss with Credit Suisse.

Yes. Thank you very much. I was wondering if you could talk a little bit about your expectations for Kate Spade in international markets in the near term. How much are you willing to push that business going forward?

Thank you, Christian. We're very excited about Kate Spade brand and its international opportunity. Look, just comparing with Coach Inc. where we are in the four key global markets, first and foremost of course, there's tremendous opportunities still here in the U.S. We got a brand that basically is in a 178 locations relative to our 400 as you heard, on our speakers notes we definitely see opportunity to manage the outlet channel more proactively here in North America. So that's one. And then is the three key international markets, Japan, China and Europe, we see tremendous opportunity. The brand is more mature in the Japanese market where there are 88 locations, relative to where Coach is for example with a 180, 184-5 locations, we definitely see an opportunity in that market and then in Europe and in China we’re especially excited because we're in our infancy in Europe. There are seven locations, Kate's doing really well in the U.K where it just getting its footing if you will with the first seven locations in UK and Ireland and then one location, six in the U.K. and Ireland, one location in Paris, but especially excited by the initial results there. And then in China, we are today in approximately with a distributor partner at 33 locations relative to 175 to 180 for the Coach Brand. And we see an opportunity of course to grow our awareness in all of these markets, as an example here in the U.S. Kate’s unaided awareness is 31% relative to Coach’s 71% and in Japan which is the second largest market in the world for us and indeed for Kate and for the category, Kate’s awareness is 15% unaided relative to Coach’s 51%. So we're very focused on the international opportunity. And I think you'll hear a lot about that in the quarters ahead.

Great. Thank you very much and best of luck.

Thank you.

Our next question comes from Bob Drbul with Guggenheim Securities.

Hi, good morning. I guess the question is, could you elaborate a little bit more on the traffic results you know, for the Coach business, both full line and outlet and how the quarter progressed and how do you see the fall progression?

Sure. I'll let Josh jump in. I'll take that question. Overall Bob we've been seeing very consistent traffic trends over the last few quarters. More or less, I would say in the negative single digits range. Obviously we've been driving the business through conversion, great product and pretty consistent across both channels with maybe the full price store suffering a little bit more from the traffic perspective than the outlet channel.

Great. Thanks very much.

Thank you.

Our next question comes from Erinn Murphy with Piper Jaffray.

Great, thanks. Good morning. I was hoping you could unpack a little bit more about the reversal of gross margin in the fourth quarter. I think you highlighted channel mix and then you talked about [indiscernible] outlet. Could you just speak a little bit more about - what how much those impacted the margin in the quarter? And then was there any impact from the [indiscernible] license take back in Q4, is that going weigh on gross margins in fiscal ’18? Thanks.

Sure. And I'll let Kevin take that.

Good morning, Erinn. Few components I guess on the gross margin change, as we said on our Q3 call in May we didn't expect the fourth quarter gross margin to contract given that we began anniversarying some of the product cost benefits that drove the gross margin expansion in quarter one and three. We did achieve some cost reductions in Q4, but at a lower level as compared to the prior quarters and it was not sufficient enough to offset the promotional activity which basically stayed approximately same as in prior quarters. We also had expected to reduce the outlet promotion based on some innovations in product that we had put in the channel, however due to [audio break] products not fully resonating what consumers expected we did not [indiscernible] the promotions as planned. We also felt like that we missed a little bit on logo product and as we observed during the fourth quarter a broad emerging trend towards more logo products, which were going to be getting into as we move into the second quarter of this year. And as you noted, we did have some FX impact in channel mix and what we're seeing in the gross margin on [indiscernible] also note that as we move into fiscal ‘18 we do expect a year-over-year decrease in margin rate with more pressure in the first half with a significant majority of this year-over-year decline being attributable to Kate Spade business which runs at a lower gross margin rate. As it relates to the [indiscernible] question that will be a negative impact to the gross margin rate as we move into ’18 as we come in earlier. That was a last year’s business previously that was effectively 100% [audio break] about a little bit of headwinds as we move into fiscal ’18, but we certainly think it’s the right strategic long-term decision for us.

Got it. Thank you, guys.

Our next question comes from Ike Boruchow with Wells Fargo.

Hi, good morning. Thanks for taking my question. I guess Kevin just was wondering if you could give just a little bit more color on the Q1 op income decline you talked about just what exactly the drivers are that are negatively impacting you so much to start the year. And then just you talked about Kate Spade comps and high single digits for the year. Again, just any color you know first half versus back half, should we expect that to be much worse than high single digits to start and then Easter at the year. Just any color would be really helpful?

Sure. I’ll let Kevin speak to the first quarter, I can then – I’ll take the comp question on Kate.

Sure. Morning, Ike. There is a number of factors that are weighing in on the first quarter and I'll kind of try to unpack those for you. First on the sales, we do have some calendar shifts in the first quarter where we see some sales probably going to be moving from Q1 into Q2. We also expect probably some more FX headwinds on both sales and margin in the first quarter. Also keep in mind as we said earlier, we did not own the Kate Spade business until July 12th. So there's about $33 million to $35 million thereabouts of sales that occurs on the July period that we do not get credit for prior to us acquiring them. On the gross margin side, we do expect some continued pressure into the – in the first quarter, although at a lesser degree than we experienced in the fourth quarter and as I said earlier, as we moved into the second quarter we believe we're going to be in a better inventory position to be able capitalize on some emerging trends. And then on – thinking about from a pro-forma from the Kate Spade perspective, again we're going to see some pressure there from a gross margin. On SG&A side we got some puts and takes there. But as the top line we see a little bit of pressure creating some difficulty on the leverage perspective and I would also note that if you’re thinking about it on a pro forma basis with Kate [indiscernible] they did have some good news in their last year September quarter ended relative to [reverse in] [ph] incentive compensation benefits that they had been accruing for in their first half. So we're up against that. And then finally I would note that you know, you add all that together we're not expecting a meaningful operating profit contribution from Kate in Q1 due to the actions that we’re taking combined with the fact that their fiscal – our fiscal Q1 has not traditionally been a large profit contribution from the Kate business.

And then Ike in relation to comp and its progress throughout the year as you know in the speaker's notes and it's been very much something that we've talked about since we announced the acquisition was our desire to managing drive the brand for long term health and growth. We are taking two very important decisions towards that end which is reducing a lot of the promotional impression that we believe are more harmful to long-term brand health, specifically through the online price or flash sales, as well as through the more urban discount or wholesale disposition d channel, specifically of course we pull back on the surprise business will have a negative impact of course on comp throughout the year given that currently there brick and mortar comp has been consistent with the first quarter in their second quarter on what is now of course - with our fourth quarter. And I would say around negative 8 you would assume that the pullback in online will mean that brick and mortar comp will improve as the year progresses. That is our plan today.

Got it. Thank you.

Thank you.

Our next question comes from Oliver Chen with Cowen & Company.

Hi, thank you. Good morning. Our question was about your comments related to coach.com and your digital priorities. Just curious about what you're focused on in terms of stores and mobile and web site integration and also how you'll continue to stand your own in the face of Amazon making so many competitive strides as it relates to retail in general. And our second question was just about synergies with Kate Spade. What's the framework for easier to achieve synergies versus longer term synergies. And it looks like you had a nice findings initially, just what drove some of the differences in terms of what you've been seeing very recently since you've had Kate Spade for just a month? Thank you.

Sure. First I’ll Josh talk a little bit about his views and strategies on the web. We're very excited about his passion and experience there. And then I will jump in with Kevin on everything related to - everything related to synergies and cost.

Good morning. This is Josh. So as Victor said I am passionate about really building the coach.com business both from a business perspective and as a global digital flagship. We see opportunities to immediately impact the business by evolving our targeting strategies and the way we look at the spend allocated for performance marketing. And then as we revision coach.com as the global digital flagship really looking at it regionally on global basis and seeing how we can tie that more mystically into the omni channel experience that our customer has. From a product point of view online too, we have an opportunity to distinguish the channel and leverage an exclusivity message that can tie into some content creation, as well as amplifying the volume at some lower price point as well. In terms of Amazon, for the time being we don't see that as a true luxury play and where many of our core competitors play and we're more excited about engaging directly with our customers through our own digital channels and those of our premium wholesale customers.

[Technical Difficulty] ability to get procurement savings. So those are in a more easier buckets, if you think about more the longer term, that's generally in the systems area, as well as the cost of good sold. So it takes longer to affect changes there. But overall we feel good about the process is underway. We feel good about the teamwork across the organization, as I noted earlier we will be updating you in each quarter earnings call.

Okay. Thank you. Best Regards.

Thank you, Oliver.

[Operator Instructions] Our next question comes from Anna Andreeva with Oppenheimer.

Great, thanks. Good morning, everyone. We had a follow up on gross margin, what's the negative impact we should expect from Kate for the year and should we that expect underlying codes gross margin up for ‘18. And then looking out, Coach Brands operating margins just under 19% this year, you had previously talked about reaching low 20s. Maybe talk about the puts and takes for ’18 and beyond?

Yeah, several questions there. First on the gross margin, the negative impact I think on a consolidated basis for Kate, did I get that right?

Yes.

I think we've not given you know, specific gross margin rate, but it will be you know, call it to probably in the $170 million to $200 million, 200 basis points range for the year. As I said earlier it will be uneven by quarter as we you know, do some of the actions that you would expect it to have that kind of level - of profit is lower than traditional legacy code just to our business. And the other question I know was the gross margin for the year in the Coach Brands. Again, we've not given specific, but you should think about the Coach Brand you know, legacy businesses having modest gross margin expansion for the year. And then…

Thank you. That's helpful.

Okay. Anything else?

The operating margins, maybe talk about reaching the low 20s and the puts and takes there for the Coach Brands? Thanks so much.

What we said earlier the operating guidance that we have previously provided is no longer operable as we've moved to a house of brand and we will be providing annual operating guidance fourth quarter each year, as we’re looking at it on a total business…

Got it. Okay, got it. Thanks so much. And best of luck.

Thank you.

Our next question comes from Lindsay Drucker Mann with Goldman Sachs.

Hey. Good morning, everyone. I wanted to ask about the comment on Kate and the outlet stores. Could you talk about first of all the split of where you expect to be opening outlook store, maybe even just a little more detail on the overall Kate store expectation for next year? Where and what kind of stores or though, are those. And second you know, as you think about the potential competition with Coach Brand in outlet stores with more competition from Kate and maybe customers cross shopping you know, how you plan to mitigate any potential pressure on the legacy Coach Brand business? Thanks.

Hi, Lindsay. I’ll take the first - the second half of your question first in terms of potential competition or overlap, I couldn't be more excited with the results that we just got. In fact, no more than a month ago in post-purchase and combining our data basis, as you know we have a very large Coach data base, we actually combined Coach Stuart Weitzman and Kate Spade data basis and did a little bit of cross shopping analysis and the result came back at less than 10% and that was slightly above 10% between Stuart Weitzman and Kate, which was really the highest cross over that we saw and was just about 10. So very exciting news. And I think speaks to our initial views and assumptions going into this, which is of course like riding an incremental business given the very unique brand attitude that Kate has, a much stronger leaning in towards a millennial consumer at over 60% which compares to basically just over 30% for the Coach Brand and a very differentiated brand attitude and positioning globally not just here in the U.S. although nascent in international markets. In terms of – so in conclusion, we're not worried at all about the crossover or competition that you look. In terms of – and we see ourselves obviously growing our total market share with a combined house of brands. In terms of distribution, very excited about the opportunities globally, as I talked to earlier, I believe it was the first question in terms of just the number of opportunities ahead of us, both in the digital and brick and mortar perspective. I think on the outlet side, the opportunities are really two. One is definitely distribution, the outlet channel provides great opportunity for those more value conscious consumers that we see globally and visit and probably off the brick and mortar channels, so ones that we're still seeing developments in rather global aggressive pace compared to full price. And then second is the opportunity for just us to support that team. There's a great insight, but we believe we can support them in managing it much more efficiently and better. But at of course through innovation and product and hand-bags, leveraging our supply, increasing and improving quality and gross margin overall, all opportunities are ahead of in differentiating between the channels as well. So exciting, we're still very much ahead of us on that front. We look forward to keeping you updated on it.

Great. And then just – outlet opening U.S. versus Japan or overall store openings, the net store openings where we should expect that to be for Kate?

I think you’ll see it globally. We're still very much in the process of obviously look, we’ve owned the business for a month. We have plans to really drive the business globally. We’re still in the process of negotiating with our partners and landlord partners globally. I think you'll see some growth in our opening of - here in the U.S., as well as internationally with a focus especially on Japan and China. Of course, China remains a business which is a joint venture with a third party distributor, but we will certainly fill you in on that and we’re very excited about the opportunity across all markets.

Thank you.

Thank you.

Our next question comes from Mark Altschwager with Robert W. Baird.

Good morning and thanks for all the details today. Just wanted to follow up regarding the new reporting. I think you mentioned plans for low single digit percent increase in Coach brand global comps. Can you just give us a sense of how the comp growth has been tracking in the international segment just to add some context to that guide? And then just directionally in North America how are you thinking about the comp growth in fiscal ‘18 versus fiscal ‘17 for Coach Brand? Thank you.

Yeah. On the international question, we have not provided comps on that and on the North America we have historically - we said going forward don’t provide global comps and as know indicated we're expecting actually low single digit growth in the Coach Brand thus likely.

Thanks.

Thank you.

Our next question comes from Omar Saad with Evercore ISI.

Thanks for taking my question. I thought you made some interesting comments around the outlet consumer’s response to some of the new products going through there. The fact that maybe you had to be a little bit more promotional than you expected and I think you also made some comments around logo not having enough logo product you know, where do you see that cycle shifting, back and forth. Help us understand what's going on in that channel because the products seems so much better? Thanks.

Thank you, Omar. Very good question. I'll let Josh jump in on that.

Good morning. One of my early observations was really how this team has driven the outlet channel through innovation and how and how that's been resonating with our customers these past few quarters. I think what we saw different at the end of Q4 was that there was a resurgence in demand for some of our local product that has traditionally occupied a higher margin within our mix. And so we have a higher turn on the logo product in the fourth quarter and we're actually working part now to position ourselves to be in business in that product. And my observation that is somewhat related to the overall logo trend, but I also see it as a terrific time for the brand health that this heritage product that is so iconic to Coach is seeing resurgence demand wherever we have it.

Got it. Do you think it's a little bit of a trend, logos and also just a reflection of the b brand health and the demand for it?

Yeah, we see it as positive and we're actively chasing now and we anticipate to be in a more complete stock position for Q2.

Thanks very much…

Omar, I would just add, and I think you'll see us to developing into that cross-channel go forward which is an exciting for. It really is.

Our next question…

Yes, yes for price [ph].

Thank you. Best of luck.

Thank you.

Our next question comes from Michael Binetti with UBS.

Hey, guys. Good morning. Thanks for taking my questions here. I just want to clarify one thing on the guidance really quickly. Jim Lehrer [ph] consolidation it sounds like it's contributing to the gross margin guidance that you talked about for the year. Is there any way you can help us to nationalize what that adds to revenue or either line for the year, EBITDA line?

Michael, it’s Kevin, now to be clear it's a negative to the gross margin rate for the year. The last one business effectively 100% margin now we take it in-house and obviously is less than 100% because you've got a cost. So it's actually a modest headwind on the gross margin rate for the year and overall it would be you know, small dollars in the big picture. So it's not a material impact, but it's you know modestly we're very slightly negative for the year we’re taking back.

Okay. It does contribute to upside of the revenue line, I just want to make sure is that right?

We've not disclosed that, but again it's a very tiny number in relation next year…

Yeah, Michael as you heard in my speakers notes, we're really taking a very deliberate approach to the stock here in year one, we’ve got a business that we starting with about skews, that compares to anywhere in north to 5, 600 skews under Jim Log [ph] We're starting with about 120 wholesale doors which from a department store or department store channel and wholesale for example we compare to 5to 600 dollars under Jim Log, if we were to include the disposition channel they were over thousands of door. So we're really starting with a very I would say a very focused and deliberate launch, but very excited about the opportunity long-term given the fact that it's a $28 million dollar opportunity for us and it's growing. And of course we’re leveraging a lot of that now specifically around fit that we're getting from [indiscernible] team.

Okay. And then – most of my other questions have answered, but curious if you could give us little language on a promotional environment. I know you have some competitors that are planning to close doors or may start closing doors, maybe you could talk about what you're seeing in some of the local markets as that happens and I feel about market share opportunity as you look ahead and obviously you'll be calling back and wanting your other brands, Kate Spade, how you think about the Coach market share opportunity into those competitive dynamics?

Sure. We don't see - look, overall I would say that we don't see dramatic shifts across channels from a promotional perspective. Of course, the department store channel has specifically seen the most substantial pullback across France and there the impact of Kate Spade is truly minimal. Now one of the most positive surprises for us actually we knew this through our diligence prior to the acquisition has been just how clean that brand has been and how well it's been managed from a promotional perspective, as it relates to the department store channel. And so we're excited about that. There's not much cleaning to do in there. As it relates to the online channel again, we see most of the impact from our own actions and what we see from Kate Spade has been very difficult to read in terms of impact across brands or cross-channel. For us this is really not as much about reducing it to gain market share in one channel or another. But really about managing brand power for the long-term, that's the strategy, that's what we're focused on. And so doing of course allow for a much more sustainable growth both top and bottom line for our brands.

Okay. Thanks a lot. Best of luck.

Thank you.

Our next question comes from Paul Trussell with Deutsche Bank.

Good morning. Thank you for taking my question. You certainly touched on this already. But maybe just a little bit more detail on the comp, especially in North America, you obviously comped the comp which was impressive this quarter. Maybe just elaborate on your confidence to be able to continue to do so over the coming quarters? And you know the particular factors and drivers that you're most excited about.

Yeah, I would say, look, we don’t add anything to what Josh had share with you which is obviously incredibly pleased with the fact that consecutive comp here in North America are very focused on continuing to drive engagement across channels, of course on brick and mortar full price outlet and digital channel and you'll see of course as Josh mentioned digital continues to be increasingly important for him and for the brands under his leadership. And globally, I wouldn’t add anything to what we've just guided, which of course is the low single digit cost of the brand across markets which we're excited about. So my brand is increasingly global as you know with growth coming especially out of Europe and China which has been appealing for a few quarters and of course in China for few years. That we’re continues to be very excited about.

Operator, we’ll take one last question.

Our final question this morning will come from the line of Simeon Siegel with Nomura.

Anything you can elaborate on your comment to refocus Kate's licensing. I believe they license a broader assortment of products, so how un-flexibility do you have there. And then the that comment pertained to geographic JV in Asia as well? Thanks.

Yes. The licenses are part - the discussion about licenses approximate licenses not distribution based licenses. As I mentioned we do have a JV with China that of course we will be focusing on, and it relates to the products based licenses, there is no intent to spend anything early. A lot of these licenses do have short times. So we will be re-evaluating them on a case by case basis. I think our objective is just truly focus on the core fashion category and especially in certain home licenses, but you will you will definitely see us reduce the number and average power and much more fully within the handbag in accessories business where we believe the greatest opportunity lies.

Great, thanks. Just a random question if can, when you talk about the promotional levels of outlet, do you find you are impacted by promotional levels across all our outlet retailers or its specifically promotional levels of your peers?

I would say in general when we talk about promotion levels, of course were most focused on what is happening I would say in the premium brands space and those domestic and European players that are closest to us across the distribution channels, whether that be with specialty of course in wholesale and in the out of the channel, which of course by nature is a promotional channel.

Great. Thanks a lot guys. Best of the luck to the year.

Thank you. Back over to Victor for some brief concluding remarks, Victor?

Thank you, Andrea, Just want to close by first and foremost welcoming the Kate Spade team, I know there is quite of those folks listening in and walking down to the Coach Inc. family. We’re incredibly excited to have them as a part of the team and very much looking forward to supporting them in their growth as a brand not only here in the U.S., but globally. Also want to thank and congratulate the Coach Inc and teams on a fantastic fiscal year ’17, as we continue to drive results and our brand transformation and as the Stuart Weitzman team moves under the direction of Wendy and Giovanni Morelli in this new chapter, as well. Obviously could not be more excited about our revolution corporately as a house of brands and bringing our vision to markets across the globe and looking forward to continuing to connect with all of you as we share the work that we're doing not only in our into adding our brands, but of course integrating the Kate Spade brand in the quarters ahead. Thank you all.

This does conclude the Coach earnings conference call. We thank you for your participation in today's call. You may now disconnect your lines and have a wonderful afternoon.