Good afternoon, ladies and gentlemen, and welcome to the Fossil Group Third Quarter 2024 Earnings Call. At this time, all parties are in listen-only mode. This conference call is being recorded and may not be reproduced in whole or in part without written permission from the company. Now I'll turn the call over to Christine Greany of The Blueshirt Group to begin.

Hello, everyone, and thank you for joining us. On September 4, Fossil Group announced the appointment of Franco Fogliato as Chief Executive Officer effective September 18, and he will be joined on today's call by Andrew Skobe, Interim Chief Financial Officer. I would like to remind you that information made available during this conference call contains forward-looking information, and actual results could differ materially from those that will be discussed during this call. Fossil Group's policy on forward-looking statements and additional information concerning a number of factors that could cause actual results to differ materially from such statements is readily available in the company's Form 8-K, 10-Q and 10-K reports filed with the SEC. In addition, Fossil assumes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. During today's call, we will refer to constant currency results. Please note that you can find a reconciliation of actual results to constant currency results and other information regarding non-GAAP financial measures discussed on this call in Fossil's earnings release, which was filed today on Form 8-K and is available in the Investors section of fossilgroup.com. With that, I'll now turn the call over to Franco.

Good afternoon, everyone, and thank you for joining us. I'm thrilled to be here for my first earnings call, as the Fossil Group Chief Executive Officer and look forward to getting to know our shareholders in the coming months. First of all, I would like to take the opportunity to thank our team globally, particularly, Jeff, for leading the company during the transition, and for the warm welcome I have received. In my first week with the company, I have immersed myself in the business, spending time with employees throughout the organization and meeting customer, partners and vendors. I'm conducting this deep dive across all of our key geographies, the Americas, Europe and Asia as well as our channels and our incredible portfolio of brands. It's been exciting and empowering to hear universal support for Fossil Group and a strong desire to see us win. It's also been incredibly helpful to learn the biggest issues facing the company. Importantly, in my first 60 days, I have gained conviction about the opportunities we have and the action we need to take. Before I talk about the future, let me tell you why I'm here. I have great admiration for the Fossil brand and the role this company has played in shaping the watch industry. The heritage of our core Fossil brand runs deep. We are recognized around the world, and this year, Time Magazine ranked us as the fourth watch brand overall, just behind world class brands like Apple and Rolex. Over the past 27 years, I've been fortunate to lead iconic global brands, gaining valuable experience running business portfolios with omnichannel operation in multiple geographies. Fossil Group has 14 brands in three channels across 120 countries, a level of complexity that my background is well suited for. I owned my…

Thank you, Franco. We are excited to welcome you and to work together to lead the company in focusing on our key strategic priorities. Good afternoon, everyone. As expected, our third quarter performance reflects continued pressure on the top line, while initiatives under our transformation and growth plan continue to drive improvement across gross margin, SG&A and adjusted operating profit. Third quarter net sales totaled $288 million, down 16% in constant currency. 600 basis points of the decline is attributable to our smartwatch exit and store closures. We continue to see stabilization trends in Fossil traditional watches, which declined 4% globally on a comp basis in Q3 as well as India, which was up about 10%, excluding connected. We also see strength in selected licensed brands such as Armani Exchange, SKECHERS and Tory Burch. The most challenging area of our business continues to be our larger licensed watch brands as some of our partners work through their respective repositioning efforts. We are working closely with them to adapt our plans and programs accordingly. Gross margin expanded 240 basis points versus last year at 49.4%. This can be traced primarily to the exit of connected and TAG benefits from retail pricing, promotional initiatives and account renegotiations. Incremental royalties for several brands with contractual minimums partially offset these margin benefits. SG&A expenses were down $31 million to $161 million compared to last year, representing a 16% decrease as we focus on cost takeout. The year-over-year reductions are attributable to lower store operating costs on fewer stores, lower compensation and administrative expenses resulting from our TAG initiatives, and decreased marketing spend versus the prior year. These ongoing cost actions are expected to drive continued reductions in SG&A dollars in the fourth quarter, with Q4 comparisons expected to be similar to Q3. During Q3,…

Thank you, everyone, for listening today. I'm incredibly grateful to be here, and we're committed to turning around this business and creating value for our shareholders. We recognize there is a lot of heavy lifting to do. We're up to the task. We look forward to talking to you on our year-end earnings call when we outline our new strategic plan for the future.

Ladies and gentlemen, that concludes today's call. Thank you all for joining. You may now disconnect. End of Q&A: