Good day and welcome to the Michael Kors Fiscal First Quarter 2017 Earnings Conference Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Joe Parsons, Chief Financial and Chief Operating Officer. Please go ahead, sir. Joseph B. Parsons - Executive Vice President, Chief Financial Officer, Chief Operating Officer & Treasurer: Thank you. Good morning and thank you for joining us for our fiscal first quarter earnings call. Presenting on today's call are John Idol, Chairman and Chief Executive Officer; and myself, Joe Parsons, Chief Financial and Chief Operating Officer. Before we begin, let me remind you that certain statements made on this call may constitute forward-looking statements, which are subject to risks and uncertainties that could cause actual results to differ from those that we expect. Those risks and uncertainties are described in today's press release and in the company's SEC filings, which are available on the company's website. Investors should not assume that the statements made during the call will remain operative at a later time, and the company undertakes no obligations to update any information discussed on the call. I will now turn the call over to Michael Kors' Chairman and Chief Executive Officer, Mr. John Idol. John D. Idol - Chairman, Chief Executive Officer & Director: Thank you, Joe. Good morning, everyone, and welcome to Michael Kors first quarter 2017 earnings call. We are pleased to report that we once again exceeded our revenue and earnings per share expectations in the quarter. We drove strong double-digit growth in our North American digital flagships, further expanded our presence in Asia, continued to develop our men's business globally, and expanded our luxury fashion product assortments. However, this progress was muted by the ongoing decline in mall traffic trends as well…

We will take our first question from Kimberly Greenberger with Morgan Stanley. Please go ahead. Kimberly Conroy Greenberger - Morgan Stanley & Co. LLC: Great. Thank you. Good morning. John, I have a question on the wholesale, global wholesale and North American wholesale. I think on the last earnings call, you suggested a high teens decline in global wholesale. We're only seeing about a 7% decline this quarter. Perhaps there's some seasonality there. I'm wondering if you can talk to us about your updated expectations for wholesale this year and if we'll get to that negative high teens run rate perhaps in fiscal Q2. And then secondarily, Joe, I'm not sure I understood the comment about retail EBIT margin inflecting in the back half. Could you just go through that one more time for us? Thank you so much. John D. Idol - Chairman, Chief Executive Officer & Director: Sure. Thank you, Kimberly, and good morning. Yes. I think you're going to see the inflection of global, really, North American wholesale increase as we go through the quarters, as we begin to pull back our exposure in that channel and further reduce also our promotional activity. In particular, that's going to start in calendar Q1 of next year. We will be removing ourselves from all store couponing, and that's for all of our retail partners in the United States and in Canada. And also, we will be removing ourselves from all of the department store friends and family sales as well. We think that this is critical for us to really do three things; number one, to protect our brand image. As you know, that channel has become very promotional and, in fact, is causing us difficulties in our own retail channel, which is why you see our gross margins…

Our next question comes from Omar Saad with Evercore ISI.

Thank you. Good morning. John, the traffic issue, it's obviously not specific to Michael Kors. It's a lot of retail, especially soft goods sector. Maybe talk to us about how you're thinking long-term strategies to deal with that and address it. Is robust e-commerce platforms enough? Do you have to change marketing or the way you market? How critical is it to get (40:58) door? Maybe talk through how you're thinking about bigger picture to face this kind of industry-wide issue. John D. Idol - Chairman, Chief Executive Officer & Director: Sure. Thank you, Omar, and good morning. You're correct that we are all facing issues around traffic. And they're really driven by two things; first is mobile. I would use the word mobile, because as people today are not only purchasing on mobile but they're shopping on mobile. So we think that that has to become one of our core competencies and leading platforms that we are going to really communicate and engage with our customers. There's a number of technologies that are coming to market from some of our partners at Facebook and Google that are going to enable us to really on a geo-targeting basis be able to change the way that we market to our customers and get it much more ring-fenced in terms of how we can communicate. And then really try to tailor our offerings to that customer. We've just started testing some of this and the results have been quite extraordinary with customers, who might have actually been lapsed customers with us; without even any special offers, I might add. It's just really how we communicate to them and how we tailor those different messages. So that's one of the first things that we're looking at is it's not just e-commerce, but it's…

That's helpful, John. And then, maybe if I could ask a follow up on M&A, you've done the China license and brought that in-house. And at the end of the last call, you also mentioned the possibility of other acquisition opportunities. Maybe you can elaborate on that and talk about how you think about potential of buying another company versus buying your own shares when you think about uses of free cash flow? John D. Idol - Chairman, Chief Executive Officer & Director: Sure. I'd put it in the following order. Number one, Michael Kors still has significant growth opportunity. We've said that Asia could be a $1 billion business for us and we think that men's over the long term can also be a $1 billion business for us. So even if our accessories business stays flat or grows very slightly, we think those two businesses in terms of regional and/or product are going to be really exciting opportunities for us. So our number one focus in terms of use of cash and management of the assets of the company is to continue to grow our existing business, which we think we will have the capabilities of doing. Secondly, we think that share repurchase is absolutely going to continue to be a priority for us. We believe that our shares are significantly undervalued versus the marketplace. We think that the marketplace has more fear built into our stock price than actual reality of what our performance is. And so we will continue to be highly active. You saw we bought $400 million, or 5% of our shares outstanding back in the quarter. I think that's a pretty powerful statement about what our company and our Board of Directors feels about the value of our shares. And then lastly, we are absolutely looking at M&A activity in the marketplace. We've built a powerful platform. When I say platform, I'm talking about the infrastructure of the company, from our warehouse distribution to our – we own our platforms for our digital systems. So we think that we will be able to layer onto that, and we will be very cautious and prudent at what we look at, but we do think we have opportunities to grow this business, especially with our strong cash flows, and be able to use that in acquisition. And then lastly, we will potentially one day look at dividends as well, so, again, lots of good things happening at Michael Kors and lots of, we think, opportunity for investors as we move forward.

Thanks. John D. Idol - Chairman, Chief Executive Officer & Director: Thank you, Omar.

Our next question comes from Brian Tunick with RBC. Please go ahead.

Thanks. Good morning, guys. I guess two questions, wondering, you talked about the tourism, a lot of focus on the factory outlets and particularly this earning cycle, so just curious if you guys would give us any color on how your factory stores might be performing versus your retail stores? And then, as you decrease your wholesale exposure, are you monitoring the capture rate at your own retail stores? We've seen those exclusively our signs that are up in some your stores. What do you expect from a transfer perspective to take out of wholesale and capture in your own retail stores? John D. Idol - Chairman, Chief Executive Officer & Director: Thanks, Brian. In the first question, we don't break out the factory versus full price. But I will tell you that, as I think some of our other competitors have reported, factory traffic is down versus its historic level, although not really that significantly. So it's not an area that we see as volatile as the full price side. And really the full price side, for us, the volatility, as we've talked about many times, is happening in major markets, whether it's New York, South Florida, certain parts of Southern California and you see this all with currency. So whether it's the Brazilians that hurt us down in South Florida area, whether it's the Mexican peso that hurt us certain parts of Southern California, whether it was the euro because, as you know, we have close to a $1 billion business and so Europeans coming to New York were very important to us. Or in Europe, where all of a sudden with these horrific atrocities that took place in France, now certain Asian consumers are nervous about traveling to that marketplace. So those are big markets for us…

Thank you.

Next, we will take Matthew Boss with JPMorgan.

Hey. Good morning. So, John, on the pricing front, have you tested at all the pulling of promotion in your stores or maybe at any of your retail partners, just to understand the potential customer reception? Just what provides you the confidence in the modest revenue increase next year in light of such a strategic shift? John D. Idol - Chairman, Chief Executive Officer & Director: Well, two things, Matthew; first off, good morning. Number one, we must do this. It's not an issue of testing or not testing. This industry has evolved over the past few years to accelerated promotional activity. And we know that that's the absolute wrong thing to do for a business over the long-term. And so we have put in fairly significant planned declines in certain areas of the business, one of them, obviously, being wholesale. But we also have things that are going to offset that. So we have regional growth. Because remember, this is a North America or actually United States and Canada conversation that we're having. And we have significant businesses in Europe. We have significant business and growing rapidly in Asia, which we think will continue to offset the declines that we're planning in United States and Canada as it relates to the wholesale piece. And additionally, we have new product categories that we're entering, men's in particular, which we think will also help offset this. So I don't want you to think that we don't understand that there will be a decline in certain categories because of less promotional activity. We absolutely understand that, believe that and, quite frankly, want that because we want to ship less units at lower prices. That is not the way to ultimately build a luxury business.

Great. And then, just a follow-up, it sounds like versus the guide three months ago, it was really the deceleration in Europe and the decrease in North American tourism that really accounted for the comp miss this quarter. How should we think about more specifically on Europe; same-store sales down negative low double digits this quarter? How should we think about that progressing this year and forward? John D. Idol - Chairman, Chief Executive Officer & Director: Yeah, Matthew, we've already seen a rebound in this quarter in Europe. We're still planning it down kind of mid-single-digit for the year. The pound's moving around very rapidly. We have not seen the tourism return to certain key markets for us yet, the way that we would hopefully expect that to come back. So we're being cautious through the balance of the year. The overall market's going to continue to grow for us. And, again, we see it as a very healthy market for us. But we just want to plan this cautiously. We also, again, don't want to put too much inventory in the stores and start to create any kind of a situation where consumers would see accelerated markdowns. Some of the European department stores have begun to do certain things that we think is not healthy for the long-term state of their industry. As you know, the UK has started Black Friday. There's different things going on in certain marketplaces that begin to look and smell a little bit like the U.S., not anywhere near as dramatic, but they're struggling as well with low traffic in the stores and difficult performance. So we want to be very careful. Again, remember, as we hopefully continue to shoot for a 21.5% operating margin, which we think puts us as one of the best-in-class. We have an aggressive share repurchase program. We are forecasting earnings per share growth in the company. We have ways to get through this that don't have to put us in a position where comp store sales is the single most important thing that we have to do. We'd rather manage our brand through this, what we consider to be, difficult time, deliver great results for our shareholders and make sure that our balance sheet stays very, very clean and grow for the future.

Great. Best of luck. John D. Idol - Chairman, Chief Executive Officer & Director: Thanks.

Our next question is coming from Erinn Murphy with Piper Jaffray. Erinn E. Murphy - Piper Jaffray & Co. (Broker): Great. Thanks. Good morning. I was hoping to follow up a little bit on the retail gross margin. You mentioned that you were seeing some improvement thus far. Obviously, they were worse in the quarter than I think a lot of us anticipated. But can you just speak to what initiatives you're doing to really improve that gross margin in the Retail segment? And then how should we be thinking about that in the second quarter and the back half? John D. Idol - Chairman, Chief Executive Officer & Director: Yeah, Erinn, first of all, the second quarter's going to have probably another sequential decline and then the back half will start to increase for the year. But the sequential decline in Q2 is going to be relatively modest. And what we're doing is we're starting to introduce groups and products that we will not promote inside the stores. So we're kind of excited about that. We also think that we have categories that are coming into the store that are slightly higher margin. And that's through some initiatives that we've done from a manufacturing standpoint. And you saw some of that show up in our wholesale margins, as well. So we've got a number of initiatives that we think will really help to improve that. And then, of course, as Joe stated earlier, geographic mix is going to help to improve that as well, as Asia comes on stronger and is more important in total revenues, you'll see that show up in the retail gross margins. Joseph B. Parsons - Executive Vice President, Chief Financial Officer, Chief Operating Officer & Treasurer: So remembering that Greater China was in only…

And our next question comes from Lindsay Drucker Mann with Goldman Sachs. Lindsay Drucker Mann - Goldman Sachs & Co.: Thanks. Good morning, guys. I had two questions. First of all, John, as you think about the North American comp, which you said was down high singles versus last quarter, I think was down about 1%. Could you talk about what actually was the incremental negative driver quarter-to-quarter? And my second question is, I think you mentioned that even though you're expecting wholesale to be down a lot, or to be down again next year in terms of revenue as you pull shipments out of the channel, could you tell us, is there a certain number of wholesale doors that you plan to exit? Or is this just sort of tightening up inventories? And also, you mentioned that you thought sales would be up for the total company, even though wholesale would be under pressure. I was just curious where you were looking for growth? Thanks. John D. Idol - Chairman, Chief Executive Officer & Director: Sure. Yeah, Lindsay, as you may recall, we had guided to a mid-single decline in comp for the quarter. We obviously were disappointed and we came in in the high single digits, approximately 7%. And that was really caused by what happened to us in Europe. We were anticipating a decline of the level in North American comp, so we weren't surprised by what happened. And really, we knew that this quarter was going to be a highly promotional quarter for the entire Retail segment in North America. And I think we, unfortunately, were right. The amount of promotional activity from many of the people who carry our line was at its all-time high and we had to compete to be able to move…

And our final question comes from Oliver Chen with Cowen and Company.

Hi. Thank you. John, regarding the watch category and your new product, the ACCESS product, as well as smart jewelry, will that offset the declines you're seeing, which have been pretty significant? Also, can you just brief us on the crossbody SLG (1:04:21) and when you anniversary that and what's happening with that with respect to the comp store sales we should monitor? And just a final question, you've been really great at managing your inventory, but, as you said, promotions are at an all-time high when you look across retail, should we be concerned that this will impact holiday for everybody, as consumers see some really high percentages off at competitors and you can't really control that? So I'm just wanting to hear your thoughts on what your guidance assumes for that and your thoughts on the industry at large as we look forward to that. John D. Idol - Chairman, Chief Executive Officer & Director: Sure. Oliver, first off, good morning. Number one, the watch part of our ACCESS launch we're extremely excited about and, as you know, we think we've got one of the best products in the marketplace. So we're competing in a different arena. We're competing against some very significant competitors, being Apple and Samsung and et cetera. But we think with our partnership with Google and the fact that we believe that we've got a product that's better looking from a fashion standpoint, and the consumer research that we've done, in particular with the female customer, is bearing out that absolutely she wants something that's exciting looking and not quite as just tech looking, so more fashion in its nature. You're going to see it. It will arrive in the next few weeks. September 1 is when the launch begins. The marketing campaign behind…

And that concludes today's presentation. We thank you all for your participation, and you may now disconnect.