Good morning, ladies and gentlemen, and welcome to Movado Group's Fourth Quarter and Full Year Earnings Conference Call. [Operator Instructions] As a reminder, ladies and gentlemen, this conference is being recorded and may not be reproduced in whole or in part without permission from the company. I would now like to introduce Ms. Rachel Schacter of ICR. Please go ahead, ma'am.

Thank you. Good morning, everyone. With me on the call is Efraim Grinberg, Chairman and Chief Executive Officer; Rick Cote, President and Chief Operating Officer; and Sallie DeMarsilis, Chief Financial Officer. Before we get started, I would like to remind you of the company's Safe Harbor language, which I'm sure you're all familiar with. The statements contained in this conference call which are not historical facts may be deemed to constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Actual future results may differ materially from those suggested in such statements due to a number of risks and uncertainties, all of which are described in the company's filings with the SEC, which includes today's press release. If any non-GAAP financial measure is used on this call, our presentation of the most directly comparable GAAP financial measure to this non-GAAP financial measure will be provided as supplemental financial information in our press release. Now I'd like to turn the call over to Rick Cote, President and Chief Operating Officer of Movado Group.

Thanks, Rachel. Good morning, and welcome to our conference call. We are pleased with our fourth quarter and year-to-date results, which continued our strong performance from the past 12 quarters. Coming out of the 2009 recession, fiscal year 2013 was our third consecutive year of strong sales and profitability growth. Our accessible luxury and licensed brand divisions continue to drive the strong performance, having delivered a combined 18% constant dollar sales growth this year and 23% in the prior year. This consistent performance demonstrates the ongoing success of our strategies that focus on capitalizing on the unique aesthetic of our brands with compelling product offerings while maximizing our very strong global infrastructure and talent pool. The implementation of SAP globally, along with fully integrated new processes, has provided an exceptional platform -- foundation for us to manage our business and drive consistent profitable growth. Recognition in InformationWeek 500 for the fourth year in a row and breaking into the top 15 as one of the nation's most innovative users of business technology is a testament to our global infrastructure capabilities. We are excited about the many growth opportunities that lie ahead, afforded to us by our strong operating platform and by the powerful brands in our portfolio. We are committed to continue this positive momentum over the longer term, as I will outline later. Our financial results were strong across all key metrics. In total, for the fourth quarter, adjusted net sales increased 7.6%, reflecting the broad-based strength across our business with strong consumer demand in customer sell-through. The 7.6% sales growth includes the impact of the 53rd week retail calendar shift. Without this shift, our adjusted sales growth would have approximated 10%. Adjusted operating income increased 17% to $10 million from $8.6 million last year. This improved performance resulted…

Thank you, Rick, and good morning, everyone. I'm very pleased to speak to you today and present our results for the fourth quarter and fiscal year 2013. Before I review the quarter and the year in total, I would like to point out that special items are included in our fourth quarter and full year results for fiscal 2013, as well as fiscal 2012. Please refer to our press release for a description of these items, as well as the table of GAAP and non-GAAP measures. As Rick mentioned, our results for the fourth quarter and fiscal year included a $4.9 million or $0.13 per diluted share charge to sales and gross margins related to the repositioning of the Coach brand. The impact of this charge on gross margin was a decrease of 190 basis points for the fourth quarter and 40 basis points for the full year. Additionally, the fourth quarter and fiscal 2013 results were impacted by a $500,000 or $0.02 per diluted share net tax benefit for certain unusual foreign matters -- foreign items. In the third quarter of fiscal 2013 and the fourth quarter of fiscal 2012, we recorded a $3 million pretax contribution to the Movado Group Foundation. These contributions are reflected in our fourth quarter results for fiscal 2012 and the full year results of both years. Fourth quarter and fiscal 2012 periods include the sale of $3 million of mechanical movement and related parts that were not needed for our forecasted production. The impact of this sale on gross margin was an increase of 50 basis points for the fourth quarter and 20 basis points for the full year. On a GAAP basis, the tax provision for fiscal 2013 includes a $19.8 million or $0.77 per diluted share noncash tax benefit related to…

Thank you, Sallie. We are pleased to have delivered another year of strong growth in fiscal 2013, reflecting the ongoing success and disciplined execution of our growth strategies. We are committed to maintaining our strong performance in the year ahead and for the longer term, as outlined in our multi-year strategic plan. This plan includes approximately 10% sales growth annually and approximately 20% operating growth -- operating profit growth per year over the next 4 years and follows operating profit growth of over 60% per year in each of the past 2 years. Throughout the course of fiscal 2013, we implemented several strategies to position our company well in fiscal 2014 and a longer term. We delivered powerful innovation across our brands that has driven market share gains. We repositioned our ESQ and Ebel brands for long-term expansion and have already seen a favorable response from consumers to our new assortments. On the licensing side of the business, we prepared for our spring launch of the Scuderia Ferrari brand. And through our partnership with Coach, we developed a plan to broaden the brand's consumer reach and accelerate sales. We also made progress on our international expansion goals by increasing our direct ownership in our U.K. joint venture, which is expected to result in faster growth in this important market. Our balance sheet remains healthy as we continue to invest in our business and return value to our shareholders. As Rick discussed earlier, we are pleased to have announced today a quarterly $0.05 dividend and a $50 million share buyback program, which should allow us to maintain a consistent share count and offset the dilutive impact from stock option grants. I would like to thank the 1,400 associates around the world that contributed to our success this year. We remain excited about our prospects for the future and believe the continued execution of our strategies will lead to another positive year of growth for Movado Group. We would now like to open the call up for questions.

[Operator Instructions] And we'll take our first question from Oliver Chen with Citi.

Regarding the gross margin, could you kind of explain to us what happened with channel and product mix in the quarter? And it looks like the forward guidance for this is 54% next year. Do we expect each quarter to kind of see the pressure? And is this -- in relation to channel product, it sounded like you're also looking to offer better value to customers?

Well, I'll start, and then I'll turn it over to Rick. We continue to be -- to make sure that we're offering consumers excellent value across each of our brands and each of our price points. So that's an important proposition for us, and it has pressured our gross margin over the last several years. But fortunately, we've been able to make it up with leveraging our excellent infrastructure.

I think the key thing that is impacting us from our go-forward strategic plan, which will start certainly this year, is the change in the Coach positioning to a much -- to the fashion category, as well as the launch of the Scuderia Ferrari brand, which will be at lower than company average gross margins. Again, very strong price/value proposition in both of those brands.

Okay. And the repositioning of Coach sounds exciting. Are you saying that the pricing there is going to be a better value? How should we think about what's happening with the product then? And it seems like there's a lot of potential for the revenue growth at this brand. Could you just help us understand how your distribution footprint may or may not change?

Well, I think we're very pleased with our distribution, I think, with -- both within Coach stores and our department store distribution. We're very bullish on the Coach brand, and they're really focused on becoming more of a lifestyle brand. And we're partnering through that effort to -- and by entering into the fashion watch category, we can develop newness at a higher speed and be more on trend, as well as offering excellent values to the consumer, which we believe will ultimately build a much more significant business for us. Again, this is a long-term proposition, and like most things in our company, we are focused on the long term. But we're very, very bullish on this initiative. And the brand, as well, is one of the more powerful brands around the world.

And the changes in specifically the Coach, as well as the Scuderia Ferrari launch, are built into our strategic brands.

Okay. And a last question is -- the inventories look like they're in good shape, being flattish versus last year. You -- is that a trend that we expect to continue? Or do you feel like this may be accelerated? If you could comment also on inventories in your wholesale partners, how they're looking.

I'll address the corporate side of that, and then I'll ask someone else to address the retail partner side. This is Sallie. From an inventory perspective on the corporate side, we will -- we plan on having it grow at a smaller pace than our top line sales growth. So we will continue to look for opportunities there, but we are comfortable with the overall level at this point.

And we are very pleased with our inventory positions in the wholesale channel with our retail customers. And I think that's best evidenced by the numbers I talked about in the Movado growth in the marketplace, which is quite substantial and well above our competitors in general. And also, as you can see from one of our strategic initiatives, we really do focus in and we continue to focus in on improving retail productivity. So we have been focused on that for a long time. Our success has been very good there. We continue to push ourselves and deliver better performance for ourselves, as well as our retail partners.

[Operator Instructions] And next, we'll go to Mike Richardson with Sidoti. Michael Richardson - Sidoti & Company, LLC: I was hoping I could just follow up, actually, on one of the questions that Oliver asked. Just regarding the price points, what are the price points going to be now for Coach after the repositioning? And what is the price point going to be in the Ferrari Scuderia as well?

Sure. Well, Coach will really focus on the $148 to $398 price range but offering a tremendous value to the consumer within those price categories, as well as being really on trend and with a higher level of innovation. Ferrari prices are going to be between EUR 95 and EUR 600 on average. There will be some watches that will go up to $1,000. But on average, we expect the average price to be about $300 to $400.

The opening price point is about $95. Michael Richardson - Sidoti & Company, LLC: Okay, that's helpful. With regard to Ferrari this year, what are the expectations there from a sales and EPS standpoint? Could you comment on that?

Well, we don't give sales growth for any of our brands individually. So we do expect a nice launch, and as Sallie highlighted, our sales growth on our strategic plan is planned around 10%. But this year, will be a bit higher than that because of the launch of Ferrari and the opening of quite a few doors. We will continue to open doors quite a bit over the next 4 or 5 years, so it is not all happening in 1 year, but this, obviously, is a very important year for us. We will start selling in the month of April and building our door counts as the year goes on. Michael Richardson - Sidoti & Company, LLC: What is the year-end door count expected to be?

Probably around 2,500 doors or so, something like that. But we see that's certainly going to 5,000 plus over the next 3 or 4 years. From an earnings per share standpoint, as you know, we've been investing behind product development and product launch and supply chain and sales and general management and marketing. This year will be the first year we actually start having some sales. So certainly, it will be adding to our bottom line, but certainly not at the levels or the percentages as we would see as a company. We will grow into that over time.

Just to add to what Rick said, the launch of the doors, as Rick mentioned, the 2,500 doors, those are global doors because Ferrari is a global brand, and we will be launching it around the world. Michael Richardson - Sidoti & Company, LLC: Okay. From a sales perspective, what is the biggest growth opportunity going forward, I guess, over the next 4 years?

Well, I think it's important of looking at that saying there is no single major event. It really is continuing to perform with excellence and execute with excellence in all of the initiatives that we have. So every one of our categories has tremendous growth opportunity, whether it's Movado, our licensed brands, obviously, the repositioning of Coach, the launch of Scuderia Ferrari, so consistently performing and executing on the initiatives that we have are all contributing to that strong growth. So again, no one major event but continued strong growth across all of our businesses and brands and across all of our geographies. Michael Richardson - Sidoti & Company, LLC: Okay. And then just one more, and then I'll jump out and let somebody else jump in. I'm just wondering if you could comment on the sales trends in the current quarter.

Generally we don't highlight on the trends in the quarter. Obviously, the first quarter is our smallest quarter. We believe we're well positioned for product offering in the marketplace with certainly the upcoming holidays of Mother's Day, Father's Day and graduation. So again, the first quarter is our smallest. We believe we're performing quite well, and we'll continue to do that despite, perhaps, the market not growing at the same level.

[Operator Instructions] And we have no further questions at this time.

Okay. I would like to thank you, again, for joining us today. We look forward to speaking to you when we report our first quarter results in May. And again, thank you very much.

That does conclude today's conference. We appreciate your participation. You may now disconnect.