Ladies and gentlemen, thank you for standing by. Welcome to the Ralph Lauren Third Quarter Fiscal Year 2016 Earnings Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. As a reminder, this conference is being recorded. I would now like to turn the conference over to our host, Mrs. Evren Kopelman. Please go ahead.

Good morning and thank you for joining Ralph Lauren's third quarter fiscal 2016 conference call. With me today are Stefan Larsson, the company's President and Chief Executive Officer; Christ Peterson, President of Global Brands; and Bob Madore, Chief Financial Officer. After the company's prepared remarks, we will open up the call for your questions, which we ask that you limit to one per caller. During today's call, we will be making some forward-looking statements within the meaning of the federal securities laws, including our financial outlook. Forward-looking statements are not guarantees and our actual results may differ materially from those expressed or implied in the forward-looking statements. Our expectations contain many risks and uncertainties. The principal risks and uncertainties that could cause our results to differ materially from our current expectations are detailed in our SEC filings. And now, I'd like to turn the call over to Stefan.

Thank you, Evren, and good morning, everyone. I'm happy to meet with you today. I'm here to share with you how I spent my first three months, my initial observations, and a rough outline for how we will build the long term growth plan for this great company. Chris and Bob will then share financial results for the quarter and give you guidance going forward. I will then come back again to conclude the presentation part of the call and open up for your questions. But before we get going, I would like to take the opportunity to thank Ralph and the Board for their partnership and trust that they have given me in leading this great company forward. Now, let's start with how I spent my first three months in the role. Over the last 90 days, I've done a lot of travels. I've been to London, Paris, Geneva, Frankfurt, Tokyo, Hong Kong, Shanghai, Beijing, and all over the U.S., including our Distribution Center in North Carolina. I've also met with our biggest customers and spent time with many influencers in the industry, and I met with thousands of our team members across all the functions and levels of the organization. And in many of these meetings, I've received direct feedback from frontline team members and customers. The goal of the travel and meetings has been to learn as much as possible about our brand, our team, our customers and the environment we compete in. Parallel to the travel and meetings, the senior management team is in the process of conducting a formal and comprehensive assessment of our entire organization and every function we do. This review goes beyond the cost savings initiatives and brand planning processes that were underway when I joined; covers all the value creators in…

Thank you, Stefan, and good morning, everyone. Revenues in the third quarter were down 1% in constant currency and down 4% on a reported basis, below our guidance of 0% to 2% reported growth. Despite the sales shortfall, we were able to generate operating margin above our guidance range due to both better expense management and a solid gross profit rate. The sales shortfall in the quarter was driven by our North America business due to the above average temperatures that persisted for most of the fall and holiday selling period, a significant drop in foreign tourist traffic, challenges in the Lauren brand, and general macroeconomic weakness. Our performance in international markets was much better as revenue grew 6% in constant currency outside of North America. Let me provide you with more color on our performance by key geographies. Starting with Europe, our revenue grew 8% in the third quarter in constant currency. Wholesale demand was particularly strong with robust sell-throughs that drove strong reorders. By region, northern and central Europe performed the best. In Asia, third quarter revenue was up 3% in constant currency. While this growth rate is below the high single-digit growth rate we posted in the first half of the year, it was within our expectations. We reduced markdowns and the length of the sale period in Japan and Korea, our two key markets within Asia. This pressured sales growth in the quarter, however drove gross margin improvement and gross profit growth. We believe these actions will continue to help us elevate the brand in this region. Looking at performance by country, Hong Kong and Macau continued to underperform due to reduced tourist traffic, while Japan and Australia continued to outperform. As we spoke about previously, we implemented price increases in key international markets to help…

Thanks, Bob. For the fourth quarter we are taking proactive action to clear end of season inventories for fall and holiday in the U.S. so that we start the spring selling season in a strong position. As a result, we expect reported revenues to be flat to down 2% on a reported basis, due to continued pressure from lower foreign tourist traffic, as well as higher allowances in the U.S. wholesale channel to move excess inventory. The fourth quarter includes the 53rd week which we estimate will contribute approximately $65 million in revenue. We estimate the negative currency impact on sales growth in the fourth quarter to be approximately 150 basis points based on current exchange rates. Our operating margin for the fourth quarter is expected to be approximately 400 basis points to 450 basis points below the prior-year period due to the proactive action we are taking on inventory in addition to infrastructure investments and negative foreign exchange impacts. The fourth quarter tax rate is estimated at 32%. For the full year, fiscal 2016 period, revenues are expected to decline approximately 3% on a reported basis with 400 basis points of negative impact from currency. This compares to our prior outlook of flat revenues on a reported basis and 400 basis points of foreign exchange impact. The full year fiscal 2016 operating margin is now estimated to be 290 basis points to 320 basis points below the prior-year's level which compares to our previous expectation of 180 basis point to 230 basis point decline. This guidance excludes restructuring and other charges that are primarily related to restructuring activities associated with our global brand reorganization and a pending customs audit. We expect these restructuring charges to approximate $120 million to $150 million for fiscal 2016 excluding $34 million for pending…

Thank you, Chris. In closing, let me reiterate, within the company we see the current performance of the business as very disappointing and we have full focus across the whole organization to drive the business back to higher performance. The challenges we are facing did not materialize overnight. They developed over years and our solutions will take time as well. I want to be very clear. The growth journey we set out on is not to drive results next quarter, but rather position Ralph Lauren for success and relevance over the next decade and beyond. We have an opportunity to do something that will build Ralph Lauren stronger than ever before. In a world where the customer is in charge, we will build everything we do around our customer's dream of a life well-lived. We will give them access to authentic-style, quality and specialness in all aspects of their life, and we will do this in a way that we build on what made us great and we evolve it in new and innovative ways. I look forward to providing more specifics when we share our detailed growth plan in late spring. One thing is clear; I never had a stronger vision to build on. The combined strength of the brand of Ralph, one of the most iconic designers in the world, our talented team, and my experience of driving high performance in this industry, makes me very excited for the future ahead. With the full support of Ralph, our Board of Directors, we will move forward to create significant shareholder value. And with that, I would like to open up the call for your questions. Thank you.

The first question comes from Omar Saad with Evercore ISI.

Thank you. Good morning. Stefan, I'd like to ask you, obviously you've (23:49) got a lot of different things on your plate, but if I could get some of your initial thoughts potentially on the complexity of the brands and is there a need to simplify the brands, not just from a management perspective internally, but also maybe it's confusing to the consumer side as well. And then also, do you think there is a need to right-size any of the lower-end businesses like the outlet and off price? Thank you.

Thank you, Omar. Yes, you're right. There is – we are in the middle of assessment, so I can give you some early reads, which is we need to focus. I'm a big believer in my leadership approach overall to focus, and that includes our brands. So in the plan that we will come back with in late spring, I will be very detailed in terms of how I look at being focused given the multiple brands we have. What excites me though is that the more I learn about the brand, the more I realize the strength of the brand. So focusing on where we will win when it comes to the brands will be essential, and I'll come back and give you more details. When it comes to the quality of our distribution, that's also something that we are looking through in detail and as I shared in my initial remarks, we will build Ralph Lauren into stronger position it's ever had. That's a long-term job. I'll be able to give you more details in May, but we are looking through every single channel and I'm going to make sure that the plan that we move forward with enables us to drive brand strength and drive profitable sales growth at the same time.

Thank you. The next question...

Next question, please.

Thank you. The next question is from Michael Binetti with UBS Investment Research.

(25:57 – 26:06) for next year that's going to be fairly hard for us to pencil out with some – any kind of clarity in our models. Just maybe directionally how you're thinking about – I know, it's early, but directionally how you're thinking about magnitude, particularly on the revenue line. Just to help us with our longer range thinking. And then if we could just go back to try and connect some of the comments you made today to some of the investment buckets that we're used to hearing about from you over the last few years and maybe how much leverage we can think about for fiscal 2017 in terms of the buckets you've given, one the retail strategy, two the SAP and e-commerce, and then three the cost restructuring, Chris, it sounded like from your deep-dive comments that there could be something you guys are looking at that's incremental to the original plan that's led to about $110 million in cost savings. Thanks.

Yeah. Thanks, Michael. I think the answer to that is, what Stefan started with, which is we're in an assessment phase on all aspects of the business, and we're working through to create a strategic and financial plan that can drive shareholder value, can drive profitable sales growth and can strengthen the brand over the midterm. We plan to share that plan in more detail in late spring, and so we're not yet at the point where we're ready to quantify the elements of the guidance for fiscal 2017 beyond what we shared in the script this morning. What I can say on the buckets is that, particularly we shared I think, on the call, the FX impact that we expect next year. We remain on track on the infrastructure on both SAP and e-commerce to complete the SAP European implementation next year, as well as the e-commerce re-platforming next year. And we remain on track, as I mentioned, to deliver the $110 million of cost savings from the initial global brand restructure, but we are in the assessment phase and we'll share more details in late spring.

Thank you. Your next question comes from Matthew Boss with JPMorgan.

Hey, good morning. So, I guess, if we kind of piece this together and think about multi-year constant currency revenues, beyond the impact of FX today, what's – I guess, what's the best way to think about wholesale and retail constraints today both here and also abroad versus, Stefan potentially maybe the opportunity you see for a return to growth? Kind of, some of the things that may be impacting you next year versus some of the opportunities that you see; and with that, if you kind of broke down into the product, Polo versus Lauren, just kind of from a pricing perspective, do you think that you're appropriately set or do you think that there is changes that need to be made to the core infrastructure of the price that's going out the door to the customer today?

Yes. Thank you, Matt. So starting with the pricing. It's going to be an important part and it is an important part of our assessment to look through our whole offering to our customers. So given the recent very disappointing performance, we are asking and I'm driving that – we are asking the tough questions in every single area of the business. Because what I am determined to do with the team and with the support of Ralph is to match the business performance with the strength of the brand. So when I look at the brand, it's one of the strongest in the industry. And when I looked at our performance over the last couple of years, including the recent quarters, it's very disappointing. So I see significant untapped value in both the idea behind the brand and as well as how we drive the business. And therefore, in the way I outlined the way we approach, building the growth plan for the future, there will be a customer facing component which is about evolving the brand, evolving our product, marketing, shopping experience, and then radically improve some of our business engines. And I believe that driving brand strength for the future and driving consistent profitable sales growth, and in turn giving high shareholder return is to strengthen both those components, both the customer-facing part and the underlying engines and have them play together. That's also what I have experience of doing from my two previous brands.

Thank you. Your next question is from Ms. Kate McShane with Citi Research.

Hi. Thank you. Good morning. My question is just with regards to the brand. Stefan you said you have done a lot of work on assessing the brand and just in some of the questions you've just answered, you again attested to the strength of the brand. Could you let us know a little bit more detail about maybe what some of the strengths are? What is so appealing about the brand to the consumer and what can you leverage over time?

Yes, absolutely. Thank you, Kate. So when it comes to the brand, what excites me is that Ralph's original idea behind the brand when he created it, it was much bigger than apparel, and it was much bigger than product. So it was about inviting the customers into an aspirational life, their aspirational life. And being very consistent and offering authentic style, high-quality, and deliver specialness in the experience. And if you look at the disruptive market today, I believe that that's exactly what you need to do to win. You need to be special. You need to deliver a value that goes beyond apparel, and if you look at the customer, it's – the customer is now in charge. And the customer is living a busy life. And what excites me about the original brand vision and building that out and why I see so much potential in it, is that we should deliver style to the customer. And we can do that and we are known to do that and why we are so loved is because we have been so consistent in delivering authentic style, quality and specialness.

Thank you. The next question comes from Lindsay Drucker Mann with Goldman Sachs. Lindsay Drucker Mann - Goldman Sachs & Co.: The brand has a number of different avenues of distribution, wholesale, off-price, full-price retail, outlet. Can you just talk a little bit about what area do you view as quality and what function each of those avenues of distribution serves? And then just a quick follow-up for Chris. I'm curious what gives you visibility to margin improvement year-over-year in light of the potential deleverage on the sales shortfall and some of the other puts and takes that you talked about. Thanks.

Okay. Thanks. Let me start. It's Stefan. Quality of distribution for me is any channel that gives us an ability to strengthen our brand and drive profitable sales growth at the same time. So we'll come back in late spring and give you more details on how we see our portfolio of distribution going forward.

And relative to the operating margin visibility for fiscal 2017, I think the thing that gives us visibility into that from the initial planning phase is a number of factors, including the full-year impact of the cost savings that we've generated from the global brand restructuring. The full-year impact of the pricing that we've taken in devaluation markets that should kick in next year. Cost savings that we're going after through the SKU and style rationalization, and the work that we're beginning on right-sizing the company's cost structure for next year as part of the planning process, which we'll share more detail on in late spring when we come back with the plan. And I think all of those things taken in aggregate, we have visibility to suggest that that is going to result in operating margin being up versus the drag of foreign exchange that we have for next year and fixed expense deleverage.

Thank you. The next question comes from Rick Patel with Stephens, Inc.

Thank you, and good morning. So, Stefan, we'd like to hear your thoughts on the product and concept pipeline? Over the past several quarters we've heard the company introducing woman's Polo, Polo retail, they reintroduced Polo Sport. As we think about the median term, should we expect the primary drivers of organic growth to be the ramp up of these newly-introduced areas? Or are there new sub-brands and concepts that we may be hearing about in the future as you do your assessment of all the brands?

Thank you, Rick. Well, I come back to that, it's a part of the assessments. I will give you detailed outline of how I think about these questions in May. But just initial thoughts is that my experience of driving high performance in this industry is very much connected to finding a systemic repeatable way of creating a stronger and stronger assortment, and it's still early days but I see big untapped value potential there. When it comes to evolving assortment in terms of the balance of the assortment, and in terms of sports and catering to the customer's different needs, I'm coming back to why I believe in the brand. I believe that we should give our customer access to a life in style better than anyone else and that means mirroring what their need is and how they build up their wardrobe. And we can do that more authentic with higher quality and with more specialness than anybody else. And we can also and we should think in new ways and innovative ways of how we can utilize the disruptive world we are in to actually deliver that specialness to the customer in a way that excites and delights them, but also that makes it convenient for them. And I'll come back in late spring with more details.

Thank you. The next question is from Dave Weiner with Deutsche Bank.

Yeah, good morning. So I just had two quick questions. Number one, just to follow-up on the prior one. Could you talk a little about your early reads on that you've seen so far on the Polo Sport business and the inclusion there in Dick's and some other wholesale partners, and then also maybe a little bit about Europe, you gave some commentary on your own business by geography, but could you maybe talk about whether you saw any incremental weakness due to the terrorist attack in Paris or if you feel any kind of shift in cadence among local consumers just broadly there relative to maybe the back half of – or earlier in 2015? Thanks.

Yeah, let me start with Europe and then I'll turn to Stefan for Polo. In Europe, we delivered constant currency growth in the third quarter of 8%. So, it was a pretty strong performance from a revenue standpoint. We were disrupted from the terrorist attack in Paris. We actually had a number of our stores shut down both in France and the UK for a few days and we saw the shopping pull back. But it returned relatively quickly after that and so that's how we were able to deliver a relatively strong result of the 8% constant currency top line growth despite that short-term disruption.

Yes, and when it comes to the Polo Sport question, I tie it to getting closer to our customers. Given that we are about style and we are going to be the customer's preferred supplier for aspirational style to their wardrobe, it's about getting as close as we can to them. That's why as one of the underlying business engine that we're going to develop is a consumer insights capability that gives us the possibility to reflect if it's – if the customer builds their wardrobe on more of an at leisure and sport component, our offerings should reflect that. And it also makes me think about how Ralph has been 10 years, 15 years ahead on many macro trends because we were one of the first in the industry several years back in thinking about sport, and what we have to do now is we have to get close to the customer and we have to evolve our offering so we reflect how they want to build their wardrobe.

Thank you. The next question comes Laurent Vasilescu with Macquarie Capital. Laurent Vasilescu - Macquarie Capital (USA), Inc.: Good morning. Thanks for taking my question. Gross margin was up 30 basis points on a constant FX basis compared to 90 basis points last quarter. Was the difference due to lower benefits from sourcing, SKU rationalization, and product mix, or were there additional factors we should consider? How should we think about that for the fourth quarter? And then lastly, last February it was noted that your hedges for inventory purchases is six months to nine months out with 70% exposure rate. Has that – have those factors changed over the last year as we think about FY 2017? Robert L. Madore - Chief Financial Officer & Senior Vice President: Yeah, so let me address those. So, the gross margin performance in the third quarter was impacted largely by the U.S. market versus the second quarter because in the U.S. market we saw a difficult, as we mentioned in our prepared remarks, fall holiday selling period. In our fourth quarter guidance is reflected on the gross margin rate, a plan to increase markdown monies and allowances to clear excess fall and holiday inventory so that we start the spring selling season strong. I would say that's really the driver in the gross margin trend in Q3 and Q4. With regard to FX and hedging, our hedging policy has not changed; it's consistent. And so we expect at current exchange rates to have a very small to nominal impact on translation next year in fiscal 2017, but we will have a transactional impact, as we mentioned in the prepared remarks. The combination of those two we expect to impact the results by about $90 million negatively as the favorable hedges – we lap the favorable hedge benefit this year going into next year.

Thank you. The next question comes from John Kernan with Cowen & Company. John Kernan - Cowen & Co. LLC: Hey, good morning, everyone. Thanks for taking my question. Stefan, you talked a lot about disruption; you used the word several times. Can you help us understand what you see as the most disruptive factor to the apparel category in general right now?

Okay. Good morning, John. Yes. When it comes to the disruption, I'm a firm believer that we're just seeing the beginning. So I believe that the biggest disruption is that the customer is now in charge. So the customer has better visibility and better choices than ever before. So any company that's in the business of providing generic products or don't have any real value add beyond the lower and lower price or who, more importantly, is not close enough to the customer will be in trouble. So that's why we are building on the strength that's made us great, and we are adding an even closer focus to what's going on in the market and what's going on with the customer.

Thank you. Our final question comes from David Glick with Buckingham Research Group.

Thank you. Just a follow-up question on some of the channels you're reevaluating. The department store channel obviously has been very, very important in the U.S. for the development of the brand, and it's evolved over the years. Certainly the shops are very brand enhancing, but obviously there's been a lot of promotional activity, a lot of focus on key items; selling at a discount. Is that an example of one of the channels you're taking a closer look at to perhaps shorten lead times and improve the quality of sales? And can you still maintain the same kind of space in those department stores if you end up shipping less into that channel?

Yes. Thank you, David. So when it comes to department stores, they have been very important – you're right – to what has made us great from a business performance historically. And they will continue to be important to us. And yes, we are focusing in the plan we're building and coming back with the details in late spring, we are focusing on some of the underlying business engines that I see yes, it's early days, but I already see based on my experience that we have a lot of value unlock to do. So one is how we systematically and repeatable build – how we in a systematic and repeatable way build assortment stronger and stronger. There is also a supply chain and inventory management component, which is to become much better at balancing supply and demand. And there is also an expansion strategy, which is to say how do we grow with quality in all the different channels we have because I believe in that department stores, direct to consumer are going to play together, and offline and online are going to play together. And what I've – again, coming back to my own experience, well, I have experience of this to drive a highly profitable global growth strategy. And I believe we have opportunities in being – taking a holistic expansion approach to our brand and our business, and by doing that unlock even more brand strength and unlock even more value in terms of driving profitable sales growth.

Okay. Thank you all for joining us this morning. And as always, we will be available for follow-up questions after the call.

Thank you.