-- Chief Financial Officer. Before we begin, I would like to note that this conferencecall contains forward-looking statements which are made pursuant to the SafeHarbor provisions of the Private Securities Litigation Reform Act of 1995.Factors which could cause actual results to be materially different from anyfuture results expressed or implied are discussed in our filings with theSecurities and Exchange Commission. Such forward-looking statements include statements regardingMovado's performance for fiscal 2008 and beyond. We current expect to updateestimates. However, the failure to update this information should not be takenas Movado's acceptance of these estimates on a continuing basis. The MovadoGroup may also choose to discontinue presenting future estimates at any time. During the course of today’s conference call, management maypresent certain non-GAAP figures. For a reconciliation of these figures, alongwith information required under SEC Regulation G, please view our earningspress release, which has been posted at our website at movadogroup.com. Let me now outline the order of speakers and topics fortoday’s conference call: Efraim will begin with the highlights of our thirdquarter performance; Gene will then review the financial details; and Rick willprovide you with an update on our operating initiatives along with ourfinancial outlook. We would then be glad to answer any questions you mighthave. I would now like to turn the call over to Efraim.

Thank you, Susanne and good morning, everyone. Today I amvery pleased to announce strong third quarter and nine month results, both on aGAAP basis and adjusting for unusual items. These items have been reconciled ina table attached to our earnings press release, which Gene will detail later inthe call. We continue to recognize the growing uncertainty surroundingthe outlook for the U.S. economy. However, our strong results for the quarterand year-to-date period reflect the continued consumer appeal to our diverseportfolio of brands. These results are what led to the increase in our earningsper share projections, which Rick will detail later in the call. Our brands are well-positioned in the marketplace, with boldnew products, aspirational advertising campaigns, including Movado's milestonecelebration of 60 years of modern design, and fully integrated marketingprogram. We have also made great strides in building ourinternational business, which grew 33% from last year and represented over 40%of wholesale revenue during the third quarter. These results reflect thegrowing prominence of Ebel and the global expansion of our licensed brandbusiness. In the third quarter, our licensed brands delivered a 33%sales increase over last year. Gains were achieved in Coach and Tommy Hilfiger,as well as our newest businesses, Hugo Boss, Juicy Couture, and our recentlylaunched Lacoste watch brand. These results demonstrate the success of ourpowerful partnerships as we synergize our product development, point of salepresence, and image building advertising campaigns with some of the mostpowerful brands in the world. Our licensing partners share a long-term vision for theirrespective brands and have enabled our company to significantly expand ourglobal footprint. Turning to our Swiss brand, demand in the Swiss luxury watchmarket has grown tremendously over the past few years, resulting inindustry-wide capacity constraints on the manufacturers of mechanical movementand other key components. This has led to the lengthening of lead times andsome product…

Thank you, Efraim and good morning, everyone. We recordedstrong financial results in the third quarter ended October 31, 2007, fueled bystrong international sales and solid gross margins. Sales in the third quarter were $180.2 million, or 8.3%above prior year. Sales in both periods included liquidation of excessinventory of $11.3 million in fiscal ’08 and $12.1 million in fiscal ’07.Excluding the liquidation, sales for the third quarter were 9.6% above prioryear. All the sales results I will discuss will exclude the impactof liquidation year-on-year. Sales in the wholesale segment increased 9.5% to $147million. The sales increase of $12.7 million was primarily the result of marketexpansion in our licensed brands. Our licensed brands were above prior year by33.4%. All brands were above last year. The growth was primarilythe result of the launch of the Lacoste brand as well as international marketexpansion of our Hugo Boss and Tommy Hilfiger brands. The U.S. wholesale segment was below last year by $2.1million or 2.3%. This was primarily the result of reduced sales in our luxurycategory. Sales in the luxury category were below prior year by $2.2 million.The lower sales that were recorded in the Concord brand with the new productscheduled for delivery in the fourth quarter. The international wholesale segment was up 33% from $44.8million to $59.6 million. The increase of $14.8 million was primarily due togrowth in the licensed brand category as mentioned previously. The retail business posted a 10.2% increase over last year.Movado boutique sales increased by 14.7% [inaudible]. This was the result of an8.8% comparable store sales increase along with sales increases innon-comparable stores year over year. The company outlet stores were above prior year by 7.4%.This was primarily the result of non-comparable store sales increases.Comparable store sales were below prior year by 0.8%. As of October 31, 2007,the company operated 31…

Thank you, Gene. Good morning, everyone. Year-to-dateresults again demonstrate the benefits of our commitment to strong operatingdisciplines, which translated into expanded adjusted gross margins andoperating profit growth. Here in the quarter, we continued our program of convertingaged discontinued product into cash, thereby improving our inventory mix anddriving cash flow. Going forward, we remain focused on growing our operatingmargin through a combination of gross margin improvement and the leveraging ofour existing infrastructure. Our operating strategies remain consistent. First, maximizegrowth opportunities within our current brand portfolio. The primary driver oftop line growth for this year will come from our newest brands, Hugo Boss, JuicyCouture, Lacoste. All three of these businesses are in their infancy and havesignificant global growth potential. As Gene mentioned, the total licensedbrand category has posted a 35% sales increase year-to-date. Second, the multi-year rollout of a worldwide enterpriseresource planning system. In the past few months, we have taken important stepstoward transforming our operations to be more efficient and customer focused. And finally, we are committed to improving our financialreturns. By focusing on improving gross margins, we anticipate operating marginto expand to the mid-teens over the next few years. This year, our operatingmargin goal is to reach 11.5%. This projection excludes sales of discontinuedproduct. We also continued to employ a disciplined approach toinventory management. Throughout the year, we maximize opportunities to convertdiscontinued product into cash, primarily in our Ebel and Concord brands.Looking ahead, we will continue to improve our inventory position and we expectto conclude the discontinued product sales by the end of this fiscal year. As a reminder, we exclude these discontinued sales in ourfinancial guidance as we view them to be above and beyond our normal course ofbusiness. Now I would like to turn to our financial outlook. Clearly therehas been a growing sense of uncertainty as to…

(Operator Instructions) Your first question comes from Jeff Blaeserwith Morgan Joseph. Jeff, your line is live. You may ask your question. Thankyou. Your next question is coming from Jody Kane with Sidoti & Company. Jody Kane - Sidoti& Company: Thanks. Just the first question about the SG&A. It’sbeen very well-contained over the last three quarters. Is that something weshould look for going forward?

I think from the standpoint of our SG&A, clearly ourbiggest level of spend in support of our brand businesses is in the fourthquarter for the holiday season, so I think from that standpoint, you’llprobably see it going up a little bit on that and obviously also from a standpointof last year, we had a $6 million charge that took place in the third quarter,so that charge is obviously not being repeated in this year. So that makes thenumbers look a little bit better for the year-to-date. Jody Kane - Sidoti& Company: Okay, I mean the -- in ’05 and ’06, it was growing --SG&A was growing about 11% to 13%, 14%. This year it’s down to 4% growth.How should we look at that going forward?

Certainly we don’t expect our operating expenses to grow atthe same rate as our sales growth. However, we expect expenses in the fourthquarter to be a bit higher than we’ve experienced in the first three.

And as we go forward, one of the things we talked about isour five-year plan focuses on operating profit growth coming in the early yearsfrom gross margin improvement, which we’ve obviously been seeing and then thelatter part of the five-year plan coming from further SG&A leveraging,which will primarily come post the implementation and stabilization of SAP, ournew enterprise wide reporting system. Jody Kane - Sidoti& Company: All right. One more question, if you don’t mind, and thenI’ll jump back in the queue. Expansion of the -- this sort of global brandexpansion, where would you say you are in that cycle? And how many newcountries can you add? How many new brands can you move into new countries? Ifyou can just talk a little bit about that, please.

Really I think that the expansion right now has come fromthe strength of our licensed brands internationally and that’s been verystrong, as well as Ebel internationally and Ebel has been performing very wellin Europe as well as in the Middle East. I don’t think we’re really focused on expanding marketsright now rather than increasing penetration in the markets that we are in butobviously we introduced Lacoste, which was brand new this year, and Hugo Bossis only in its second year, as well as Juicy is really in its first full year. So there are a number of cylinders kicking in that havehelped to drive the international growth, as well as the increased penetrationof the Ebel brand in international markets. Jody Kane - Sidoti& Company: So the countries you are, there’s still further penetrationopportunities in those countries?

We believe so, yes. Jody Kane - Sidoti& Company: All right, great. I’ll jump back in the queue. Thanks.

Thank you. Your next question comes from Kristine Koerberwith JMP Securities.

Congratulations on a good quarter. As far as your commentaryon the watch component shortage, can you give us some idea of what the leadtimes are now, the inventory levels of Ebel and Concord and when do you expectthis issue to be resolved? Thank you.

Well, I don’t -- right now, it’s not really -- there is anexpansion in lead times but it’s an ongoing process and it’s really delaysalso, because as the mechanical movement phenomena grows, there is also --these are all handmade movements and handmade -- and hand assembled movements,so there are further delays and demand for those type of products. That has not significantly had an impact on inventory. Ithas forced some delays in some of our deliveries of our Swiss brands and Ithink that there is the way that it will be solved is two-fold. There is theexpansion of some capacity being added but not a lot and but I think economictimes will dictate really whether the cycle gets shorter or longer.

What type of delays are you talking about? How much are thedelays time-wise?

Well, I think we would -- we missed some deliveries probablyin Ebel and some even in Movado in our more expensive watches, so -- butobviously the numbers were still fine with those delays. But you’re talkingshifts from one quarter into the next and probably that goes, we will continue tohappen for the foreseeable future.

Thank you.

Thank you. Your next question comes from Jeff Blaeser withMorgan Joseph.

Thank you. Sorry, I must have had a phone problem there.Just on the sales side, your guidance for $560 million, that excludesliquidation -- is that accurate?

Correct.

So that would imply about $160 million in the fourthquarter?

Correct.

And any seasonal factors or any reason that you would thinkthat gross margins shouldn’t be able to sustain this level?

I think as we said and has Gene said in his comments beforethat obviously we’ve had the benefit of our European business and the strengthof the Euro versus the U.S. dollar that certainly do give us a benefit in thethird quarter, so we would think from a standpoint of an ongoing basis, wewouldn’t plan on the currencies remaining at the levels that they were in thethird quarter and the dollar probably getting a little bit stronger. So thatwill have some impact but our margins are moving up and they are stronger, sowe are pleased that they are in that 63.5% range and perhaps slightly above.

Okay, great, and then one final one on the boutiquebusiness. Comps were obviously very strong. Would you say that was driven bysome of the signature lines or some of the new entry, lower-priced additionsthat you’ve been working on?

Well, it’s really the introduction of some new watches inthe third quarter, as well as three new jewelry families that we introduced inthe third quarter. I have to highlight also that the third quarter is a smallquarter at retail, so obviously the most important quarter is stillpredominantly ahead of us and the most important selling season for all of ourretailers is, for our own retail and our retailers is ahead of us.

Great. Thank you very much.

Thank you. Your next question is a follow-up from ElizabethMontgomery. Elizabeth Montgomery- Cowen & Company: Congratulations on the great quarter. I have a questionabout the licensed brands in the U.S. I wondered if you could just go throughthe newer ones in terms of distribution, what you have now, and what your plansare for expanding distribution over the next year?

Obviously if you look at our licensed brands, and I’ll startin order of how long we’ve been working with the brands, Coach has a verystrong penetration in the U.S. between high-end department stores, as well astheir own stores. And we expand really distribution now predominantly as theyexpand stores and are really focused on improving productivity with our retailpartners and have been very successful with that over the last several years. Tommy Hilfiger in the U.S., we believe there’s going to bean opportunity in the future and we are a strong partner with specificallyMacy’s and I’m commenting on that just because they have publicly announcedthat they have entered into an agreement to work very closely with the Macy’s brandover the next number of years and on an exclusive partnership and I think thatwill have a positive impact on the Tommy Hilfiger brand. And then Juicy, we’re in really most of the departmentstores, as well as Juicy’s retail operations that they currently operate in. Andthe nice thing about Juicy is that we did launch it internationally thisquarter and have gotten a very good response in the third quarter to Juicyinternationally. And in the case of Lacoste -- of Hugo Boss and Lacoste, theyare basically brand new and do have distribution opportunities as we moveforward. Both have significant department store penetration and specialty storepenetration, as well as their own retail venues, and so if you enter most HugoBoss stores or Lacoste stores, you will find their watches in those stores. Elizabeth Montgomery- Cowen & Company: Okay. Thanks.

Thank you. Your next question is coming from David Taylorwith David P. Taylor & Company. David Taylor - DavidP. Taylor & Company: Thank you. I’m getting over a cold so bear with me. I knowyou track the sales of your products that your retailers are making. Do youhave any sense of how they did in November?

We don’t really comment in inter-quarter sales and holidaysales, the big portion of them are yet to come so that is really -- David Taylor - DavidP. Taylor & Company: Well then, how did they do in the third quarter?

Our sell-through continues to be at levels that we’repleased with. David Taylor - DavidP. Taylor & Company: Okay. A related question [inaudible] of high priced brands,there tends to be a heavier inventory at retail than on the mid-priced andlower-priced lines. How long a pipeline do your customers typically carry forEbel? I’ll leave out Concord because it’s being repositioned.

Well, I think one of the things that our sales teams acrosseach of our brands work with is with each of our retail partners to managetheir inventories correctly and at appropriate levels for their brand and theirperformance. Sell-through in Ebel continues to grow globally, including theUnited States and -- but I think you are correct in the statement that you madethat lower priced merchandise turns at a much faster rate than higher pricedmerchandise, but the expectations are exactly that. David Taylor - DavidP. Taylor & Company: Does Ebel typically have a year’s worth of inventory in thefield? Is that normal?

I would think that that’s a fair statement. I mean, I’m notgoing to comment on specific brands but that’s a fair point of view. David Taylor - DavidP. Taylor & Company: Very good. Thank you.

Thank you. (Operator Instructions) Your next question is afollow-up from Mr. Jody Kane with Sidoti & Company. Jody Kane - Sidoti& Company: Thanks. When do you expect the liquidation sales to end forConcord?

Basically, as I said in my comments, this will be the lastquarter so it will end with this fiscal year and basically it was a two-year --not even quite a two-year program. We started last year. We will have itcompleted over the next couple of months.

And this quarter being the fourth quarter, the last quarter. Jody Kane - Sidoti& Company: And at that point, do you expect the gross margin to levelout at about 63.5%?

Well, what we said is that’s kind of our level that we’venow achieved and obviously currency plays an impact on that on an ongoingbasis, but where we are now is we feel that that is a good level for us as acompany but again, it can have swings depending on what happens with currency. Jody Kane - Sidoti& Company: And just as far as the tax rate, can you talk a little bit,you know, a longer term tax rate, when and where should it get back up to?

Again, as we’ve talked about, even though we haven’t beenthere for a couple of years because of continued utilization of the Swiss NOL,we from a projection standpoint basically use a 25% tax rate. And again, I’duse that from a standpoint of where we assume to be on an ongoing basis in thefuture but also for comparison basis, taking out the NOL impact so we can seeperformance excluding that year over year, so 25% is the level I would suggestusing. Jody Kane - Sidoti& Company: All right, great. Thanks very much.

Thank you. There appear to be no further questions. I’llturn the floor back to management for any closing remarks.

Thank you very much for participating today. I would like tothank all of you for being here and I would also like to wish all of you ahappy and a healthy holiday season and thanks again for your participation.

This concludes today’s conference call. Thank you for yourparticipation.