Andrea Shaw Resnick - Senior Vice President of Investor Relations & Corporate Communications Lew Frankfort - Chairman and Chief Executive Officer Jane Nielsen - Chief Financial Officer, Chief Accounting Officer and Executive Vice President Michael D. Tucci - President of Retail Division - North America Victor Luis - President of Coach Retail International

Kimberly C. Greenberger - Morgan Stanley, Research Division Lorraine Maikis Hutchinson - BofA Merrill Lynch, Research Division Erika K. Maschmeyer - Robert W. Baird & Co. Incorporated, Research Division Barbara Wyckoff - Credit Agricole Securities (USA) Inc., Research Division Omar Saad - ISI Group Inc., Research Division Lizabeth Dunn - Macquarie Research Brian J. Tunick - JP Morgan Chase & Co, Research Division Paul Lejuez - Nomura Securities Co. Ltd., Research Division Jennifer M. Davis - Lazard Capital Markets LLC, Research Division Christian Buss - Crédit Suisse AG, Research Division

Good day, and welcome to the Coach Conference Call. Today's call is being recorded. At this time for opening remarks and introductions, I'd like to turn the call over to Senior Vice President of Investor Relations and Corporate Communications at Coach, Ms. Andrea Shaw Resnick. You may begin.

Good morning, and thank you for joining us. With me today to discuss our quarterly and fiscal year end results are Lew Frankfort, Coach's Chairman; and Jane Nielsen, Coach's CFO. Before we begin, we must point out that this conference call will involve certain forward-looking statements, including projections for our business in the current or future quarters and fiscal years. These statements are based upon a number of continuing assumptions. Future results may differ materially from our current expectations based upon risks and uncertainties such as expected economic trends or our ability to anticipate consumer preferences. Please refer to our latest annual report on Form 10-K and our quarterly report on Form 10-Q for the quarterly period ended December 31, 2011 for a complete list of these risk factors. Also, please note that historical growth trends may not be indicative of future growth. Now let me outline the speakers and topics for this conference call. Lew Frankfort will provide an overall summary of our fourth fiscal quarter and annual 2012 results and will also discuss our overarching strategies. Jane Nielsen will continue with details on financial and operational results of the quarter and year. Following that, we will hold a question-and-answer session where we'll be joined by Mike Tucci, North American Group President; Victor Luis, International Group President; and Jerry Stritzke, our President and Chief Operating Officer. This Q&A session will end shortly before 9:30 a.m. We will then conclude with some brief summary comments. I'd now like to introduce Lew Frankfort, Coach's Chairman and CEO.

Thanks, Andrea, and welcome, everyone. As noted in our release this morning, our double-digit sales and earnings gains in the fourth quarter capped another strong fiscal performance for Coach, highlighted by excellent top and bottom line growth. We were also very pleased with profitability levels in both the quarter and year, as we managed the business to balance productivity gains and margin improvement. We continued to diversify our supply chain, expanding our manufacturing base globally. Importantly, we made significant progress on all of our growth initiatives. Moving on to some key highlights of our quarter and fiscal year. Our performance in FY '12 was highlighted by increases of 15% in revenue, 17% in operating income and 21% in earnings per share. It was a year of several milestones. First, we continued to leverage the international opportunity for Coach, growing organically through distribution and productivity while accelerating the acquisition of key Asian domestic businesses to our direct control. In China, Coach sales exceeded $300 million, up 64%, ending the year with nearly 100 locations. Second, our Men's business doubled in FY '12 to over $400 million, as we continue to open dedicated stand-alone and dual-gender locations globally, while also rolling out a broader expression of men's to nearly 1/3 of our North American retail stores by year end. Third, we successfully expanded our digital initiative, driving double-digit online sales growth, while also exploring new ways to communicate with our consumer and grow our database. And fourth, we increased our quarterly dividend by 1/3, demonstrating our financial strength, cash flow generation and our commitment to shareholder return. This annual performance was capped off by a strong fourth quarter. Some key metrics were: first, net sales totaled $1.16 billion, an increase of 12%. Second, earnings per share totaled $0.86, up 27% from the $0.68 in the prior year. Third, direct-to-consumer sales rose 13%. Fourth, North American same-store sales for the quarter rose 2% on a comparable basis from prior year, while North American total direct sales rose 7%. Fourth, China sales rose 60% as we continue to generate distribution growth and significant double-digit comps in China. And finally, sales in Japan rose 18% in dollars and 16% in constant currency, anniversarying the 2011 impact of the earthquake and tsunami. During the fourth quarter, we opened 4 net new North American retail stores while also opening 7 factory stores, including 5 dedicated Men's stores. At the end of FY '12, there were 354 Full Price and 169 factory stores in operation in North America. This was an increase of 9 Full Price stores, including 3 Men's retail stores, as well as 26 factory stores including 16 Men's stores from the end of FY '11. Total square footage grew 10% for the year. In addition, as forecasted in our third quarter conference call, we accelerated the rollout of a broader expression of Men to an additional 50 locations in Q4. Therefore, at year end in North America, there were 30 Men's stand-alone factory stores, 50 stand-alone Men's retail stores and over 85 Men's retail shop-in-shops -- I'm sorry, 5 stand-alone Men's retail stores and over 85 Men's retail shop-in-shops. Moving to China. During the quarter, we added 11 net new locations, 9 net on the Mainland and 2 in Hong Kong. At the end of the quarter, there were 96 Coach locations in China, including 79 locations on the Mainland and 36 cities. Additionally, there were 14 locations in Hong Kong and 3 in Macau. In aggregate, there was an increase of 30 net new locations for the fiscal year for a square footage increase of 58%. In Japan, 3 locations were added, 2 Men's retail locations and a factory store. At year end, there were 187 total locations in Japan with 23 stand-alone Full Price stores, including 8 flagships, 122 shop-in-shops, 35 factory stores and 7 duty free locations. In total, a net of 11 locations were added in Japan during FY '12 and 3 were expanding, yielding total square footage growth of about 6%. Finally, I wanted to mention our 2 other direct businesses in Asia acquired this fiscal year. First in Singapore, we now operate 7 locations; 5 were acquired last July, and we've opened 2 additional stores during the fiscal year. And second, Taiwan, where we transitioned 26 locations to our direct control in January and opened a new store this quarter. Shortly after the fiscal year ended, we acquired our domestic businesses in Malaysia which included 10 locations, generating annual sales of about $30 million at retail. Indirect sales, which represent about 11% of Coach's sales annually, were even with prior year on a comparable basis, adjusting for the transition of Singapore and Taiwan. Sales were driven by international wholesale shipments, while shipments into U.S. department stores declined as we continued to tightly manage inventory in this channel given retail sales trends. At POS, international sales rose significantly, driven by both distribution and same-location sales gains. While in U.S. department stores, sales decreased moderately on a year-over-year basis in the quarter. We estimate that the addressable women's North American handbag and accessory category grew at least 10% in FY '12. Coach continued to participate in the market growth, performing similarly in our own direct channels. As you know, we're also continuing to drive our Men's business in North America through new stand-alone and dual-gender or side-by-side stores and by dedicating more space for a broader Men's assortment in existing retail stores. In FY '12, Coach's sales of Men's bags and accessories doubled in North America, driving the overall Men's premium category, which grew about 25% to nearly $800 million. Over the fourth quarter, the economic backdrop in the U.S. clearly softened as consumer confidence and sentiment declined. However, our research shows that our customers' intention to purchase Coach over the next year continues to be strong, with more than 2/3 of consumers surveyed noting they probably or definitely would purchase a Coach product in the next 12 months. Our revenues in North America rose 5% with our directly operated businesses up 7%, driven by a 2% comp. As noted in our press release, an increasingly promotional environment in North America led to slower growth than expected in factory stores, which was entirely responsible for the change in the overall retail comp trend from last -- from the prior quarter. As a result, we responded by reinstating our prior practice of in-store couponing in a cross section of factory locations late in the period. It's important to note that we have significant pricing flexibility and a variety of marketing levers available to us in this channel, which allows us to balance productivity gains and margin improvement. The primary driver of our overall retail comp gain was an increase in average transaction size. The trends in our Full Price stores and overall e-commerce channels were consistent with the prior quarter. Our factory store comp was impacted by the elimination of in-store couponing throughout most of the quarter and also by slowing traffic to factory malls. Outside of North America, we saw very strong growth in our international markets. We achieved our strongest top line growth in China, which remains our largest geographic opportunity, given both the size of the market and the rate of growth. During the fourth quarter, our sales again rose sharply, up nearly 60% year-over-year, consistent with the prior quarter and fueled by distribution and significant double-digit same-store sales growth. As I noted upfront, this took our full year sales to over $300 million, up over 60%. For the quarter, as mentioned, we posted a 16% increase in local currency in Japan and an 18% gain in dollars. As we anniversary the impact of last year's earthquake, Japan is a mature market where we are focusing on the Men's opportunity and gaining share in the women's category. Moving on to product. During the fourth quarter, as always, we maintained a high level of product innovation and newness, with the launch of the Hamptons Weekend collection introduced in April and update to Poppy and Madison throughout the quarter. Looking forward, we're excited about the distinctive new look you will see in our stores with the dual-gender Legacy lifestyle collection, which is being introduced over the next month globally. Inspired by our heritage, grounded in leather and featuring distinctive Coach elements, it is our largest product launch in many years. This iconic collection provides a new foundation for the brand, targeting multi-generational consumers who are both classic and stylish in their preferences. As we've discussed, the Legacy launch is driving new merchandising strategies including: first, presenting a bolder lifestyle story about our brand, incorporating categories such as outerwear, jewelry, small accessories, watches and scarves; second, presenting men's and women's together in a powerful store environment; and thirdly, driving major color stories in handbags and accessories to highlight key items. In support of the launch, we're rolling out new visual merchandising enhancements to about 100 of our leading stores in North America, as well as key international locations. This is providing a vibrant new backdrop for the collection, driving consumer interest. Legacy launched in North America just about 10 days ago. So with only a week's worth of sales results, we can tell you that we are pleased with the collection's performance. Thus far, the duffel and the canvas carryall are the top handbag styles, as planned. The vibrant colors are being very well received in both handbags and women's accessories, and prints and fashion styles are best sellers. Of course, we plan to support Legacy through a greater investment in integrated marketing communications, featuring bold new creative across print, digital and outdoor. These major marketing initiatives are timed to coincide with the publication of the September fashion books when they drop in mid-August. Naturally, I also want to update you on Men's, a key global initiative. As mentioned, Men's doubled again in FY '12 to over $400 million globally. And we're experiencing success across all concepts and store types including dedicated stores, shop-in-shops, dual-gender locations and expanded assortments in existing stores and across all geographies and channels. Outside of the U.S. where the male consumer tends to be more style-conscious, we've also opened a number of Men's dedicated stores as well as dual-gender stores. At the end of the year, an expanded assortment of Men's was available in about half of our directly-operated Coach locations globally as well as in many key distributor-operated locations. This performance underscores our confidence in Men's as a significant growth driver for Coach. We continue to believe it will continue -- it will contribute 25% or more of the company's growth over the next several years. As we enter FY '13, our overarching strategies remain largely unchanged; first, leveraging the global opportunity by aggressively growing our international businesses through both distribution expansion and product -- productivity gains; second, continuing to build our women's business in the North American market; third, tapping into the large and now rapidly growing Men's accessory category, which I've already touched on; and fourth, harnessing the growing power of the digital world. Starting with distribution, we expect that our square footage globally and across all channels will increase about 12% in FY '13, consistent with last year. Beginning in North America, we will open at least 30 new stores in FY '13, including about 10 new Full Price locations and at least 20 factory outlets, of which about 10 will be Men's stores. One of these new Full Price locations will be a concession shop-in-shop at Macy's Herald Square opening early this fall, the first of its kind for Coach in the U.S. We are very excited about this important department store location, which will feature a flagship face designed for us by renowned architect Rem Koolhaas, who will also be designing our Omotesando flagship in Tokyo next spring. In addition, we're planning to expand about 20 locations, 5 Full Price and 15 factory, to create side-by-side stores with a separate entrance and dedicated Men's shop. In total, we expect North American square footage growth of at least 10% this year, similar to last year, driven by our expanding Men's business. Turning to China. As you know, we're committed to open -- opening about 30 new locations a year. Finding the right people to manage and staff our stores to provide the right Coach in-store experience constrains us from more rapid distribution growth. In FY '13, we again expect to open about 30 new stores, bringing the total to around 125 locations at the end of the year. All of these openings are planned to be dual-gender stores due to the size of the Men's opportunity. In total, square footage in China is expected to grow about 35% in FY '13. And we expect sales to total at least $400 million, driven by both distribution and comparable location sales. In terms of our other direct markets of Singapore, Taiwan and Malaysia, our primary focus is driving productivity as we continue to invest in training, merchandising, store environments and systems, creating a brand-right experience. This will also be true of Korea, where we are acquiring the domestic retail business from our current distributor within the next few days. As a reminder, Coach's current annual sales in Korea are about $120 million, including global travel retail or about 5% of the $2.6 billion premium bag and accessory market. The domestic retail business generates about $60 million across 48 locations. In addition, there are 14 Korean travel retail locations, which will continue to be managed by third-party duty-free operators and are not part of this agreement. In Japan, the overall consumer market remains challenging and the category continues to be fairly stagnant, although fully back to pre-earthquake levels. Our focus continues to be on gaining market share, and we have done this quite well in our core women's business. During this fiscal year, we expect to open about 10 net new locations in Japan, most of them dedicated Men's stores. We are also particularly excited about our 5,000 square foot Omotesando flagship, scheduled to open next spring. In total, we expect that net square footage growth in Japan will increase by about 10% this year compared to about 5% in FY '12. Finally, beyond our directly owned international businesses in Asia, we do have significant and growing distributor-run businesses in other countries. Brazil, Kuwait and Vietnam were all new markets for Coach in FY '12. Finally, beyond our directly owned businesses in Asia, we're focusing on expanding through distributor partners in 3 regions: first, other emerging markets in Asia, such as Vietnam and Indonesia; second, Latin America including Brazil, Venezuela, Colombia, Panama, Chile and Peru; and third, the Middle East, where Kuwait has been our newest addition. These are in addition to the significant global travel retail opportunities that continues to exist for Coach. Touching on Europe, we’ve begun to build the foundation for long-term growth with 25 locations across the U.K., France, Ireland, Spain and Portugal. First in the U.K., we have started our multichannel model. We had 5 locations opened at the end of FY '12 including 2 London flagships. We're continuing to gain traction in this market as the U.K. consumer is embracing Coach and the majority of our business is domestic. Second in France, where we are partnered with Printemps, we've opened 9 locations to date. Importantly, our key Boulevard Haussmann women's and men's shop-in-shops are performing well with the global tourists as we build our brand awareness with the Parisian shopper. Altogether, we expect to add about 5 locations in Europe during FY '13. I've just reviewed our strategies to drive our growth at a double-digit pace, giving -- given the continuing strength of the Coach brand and our increasing global expansion. We have significant runway ahead of us both in North America, which remains a growing market and worldwide, while our focus on Men's and digital provide additional opportunities for growth. At this time, I will turn it over to Jane Nielsen, our CFO, for further detail on our financials and investment plans. Jane?

Thanks, Lew. Lew has just taken you through the highlights and strategies. Let me now take you through some of the important financial details of our fourth quarter and fiscal year results. As mentioned, our quarterly revenues rose 12% with direct-to-consumer, which represents about 89% of our business, up 13%; and our indirect segment [Audio Gap] with prior year. Net income for the quarter increased 24% and totaled $251 million, with earnings per diluted share of $0.86, up 27%. For the fiscal year, sales rose 15%, totaling $4.76 billion. We saw leverage to the bottom line with earnings per share at $3.53, up 21%, and net income of $1.04 billion, up 18%. For the quarter, operating income totaled $371 million on a non-GAAP basis, 19% above the $312 million reported in the year-ago period, while operating margin was 32.1% versus 30.3% for the prior year. During the quarter, gross profit rose 13% to $838 million from 748 -- $741 million recorded a year ago while gross margin was 72.6% versus 71.8%, primarily due to channel mix and sourcing cost improvement. SG&A expenses as a percentage of net sales totaled 40.5% compared to 41.5% reported in the year-ago quarter. We were pleased that we were able to gain 100 basis points of leverage in the quarter, as our primary direct businesses here in North America and in Japan provided leverage to the corporate P&L. During the quarter, we recorded certain items including a favorable tax settlement. As a result, we made charitable contributions which precisely offset the benefit of the tax settlement to net income and earnings per share. Therefore, on a GAAP basis, operating income for the fourth quarter was $352 million with a 30.4% margin and an SG&A expense ratio of 42.1%. On a non-GAAP basis, for the full year, operating income totaled $1.55 billion, 17% above the $1.33 billion reported in the year-ago period, while operating margin was 32.6% versus 32.0%. For the year, gross profit rose 15% to -- $3.47 billion from $3.02 billion a year ago. As expected, gross margin was 72.8% versus 72.7%. SG&A expenses as a percentage of net sales totaled 40.2% compared to the 40.7% reported in fiscal 2011. During both FY '12 and FY '11, we recorded certain items including favorable tax settlements. As a result and in both years, we made charitable contributions which precisely offset the benefit of these tax settlements to net income and earnings per share. Therefore, on a GAAP basis, operating income for the fiscal year 2012 was $1.51 billion, with a 31.7% margin and an SG&A expense ratio of 41.0%. This compared to fiscal year 2011 operating income of $1.3 billion on a GAAP basis with an operating margin of 31.4% and an SG&A expense ratio of 41.3%. Moving on to the balance sheet. Inventory levels at quarter end were $504 million, up 19.6% from FY '11 year end, consistent with our expectations. This inventory level allows us to support distribution growth and to maximize sales this summer and fall. Cash and short-term investments stood at $917 million, 31% above the $702 million a year ago, after $700 million of share repurchases in the interim 12 months. During the fourth fiscal quarter alone, we repurchased and retired about 2.5 million shares of our common stock at an average cost of $67.79, spending a total of $169 million. At the end of the year, 262 million remained under our present repurchase authorization. Net cash from operating activities in the fourth quarter was $283 million compared to $221 million last year during Q4. Free cash flow in the fourth quarter was an inflow of $210 million versus $164 million in the same period last year. Our CapEx spending was $73 million versus $57 million in the same quarter a year ago. For the full fiscal year 2012, net cash from operating activities was $1.2 billion compared to $1 billion a year ago. Free cash flow in fiscal year '12 was an inflow of $1 billion versus $886 million in fiscal year '11. CapEx spending totaled $184 million for the year compared to $148 million in the prior year. It's important to note that based on our current plans for FY '13, we expect that our CapEx for next year will be up in the area of $250 million, primarily due to new store openings and expansion across all geographies, elevating our store environments within our existing stores and investments in the technology and infrastructure necessary to enable global expansion. Consistent with our practice over the past several years, we are not giving specific guidance for FY '13. We're mindful of balancing the impact of a muted consumer environment in North America and a softening global macroeconomic outlook with our optimism around the launch of Legacy, Men's growth and the strong international expansion opportunities for Coach. As noted, FY '13 will be an investment year for us as we amplify our actions to drive long-term growth. Our most significant investment is accelerating our international growth through the acquisition of the domestic retail operation of our key Asian distributors and the further development of infrastructure to support this global growth. In FY '13, we will also distort our investments in the digital space to expand and deepen our engagement with consumers. In addition, we will increase our marketing spend toward strengthening our brand positioning with distinctive new product and elevated store environment across all channels and geographies. Some of these initiatives will be in the form of CapEx, as I mentioned, while others will result in higher operating expenses, such as those associated with the transition of the Asia retail businesses including Taiwan, which we won't anniversary until January 2013; and the Malaysia and Korea, which will be acquired in Q1. So while our core businesses are expected to continue to deliver modest operating leverage, we expect that together, these investments, along the with increased brand support, will result in some deleverage in FY '13 while providing a platform for -- to accelerate our earnings growth in the years beyond. Therefore, when you're thinking about the year, keep in mind the following: first and most generally, we do expect to achieve double-digit sales growth. Our sales will be driven in part by low to mid single-digit comps in North America where our comparisons will be more difficult in the first half. In addition, currency is likely to be more of a headwind early in the year. Second, our gross margin is planned to improve modestly, as channel mix and our sourcing initiatives continue to contribute to profitability. On balance, we expect gross margin to remain high and in the 73% range for the year. Third, on SG&A, international acquisitions alone will cause our expenses to rise at least 150 basis points. In addition, the in-store enhancements and marketing programs for Legacy will have a more pronounced impact in the first quarter. Fourth, therefore taken together, we would expect some compression in the operating margin to about 31%. Notably, we expect our core businesses to continue to deliver leverage. And fifth, our tax rate is likely to be in the area of 33% for the year as we further refine our international tax strategy. Therefore, when you're modeling out the quarters, I would like you to remember that the first quarter will be the most challenging in terms of both top line as we're up against very strong North American comp and a larger currency benefit, in bottom line due to the disproportionate impact of the investments and brand spend. In summary, FY '12 was an excellent year, demonstrating our ability to manage our business nimbly while advancing our key growth initiative. We're accelerating our distribution plan to leverage the emerging market opportunity with a particular focus on China, exploring new geographies and capitalizing on the increasing popularity and recognition of the Coach brand with discerning consumers, both men and women globally. Most importantly, our goals are unchanged. We remain committed to achieving double-digit top and bottom line growth over our planning horizon. We have a business model that generates significant cash flow, and we are in a position to invest in our brand while continuing to return capital to shareholder. I'd now like to open it up to Q&A.

[Operator Instructions] Our first question comes from Kimberly Greenberger. Kimberly C. Greenberger - Morgan Stanley, Research Division: Morgan Stanley. [Technical Difficulty]

Apologies, we seem to be experiencing technical difficulties. [Technical Difficulty] Kimberly C. Greenberger - Morgan Stanley, Research Division: Morgan Stanley. I wanted to see if you could help us understand the differential between the factory comp and the Full Price comp here in the fourth quarter and how that changed relative to third quarter. And then just looking forward, as you dynamically manage your promotions, how -- if you can just talk to us about the different strategies you're expecting to employ as you work toward that low to mid single-digit comp in the upcoming year, that would be helpful.

Mike Tucci will answer the question. Michael D. Tucci: Sure. [Audio Gap] remain steady. We did see a change in run rate in factory. And what we saw was the success of our pricing strategy in Q3 against a less promotional environment, with more robust traffic trends were successful. We were able to maintain higher rates of productivity and comps, and that changed late in the fourth quarter as we anniversaried a more promotional environment in factory. And we saw a change in factory tempo in terms of traffic levels in factory stores. We responded to it. We took action. We pushed a stronger value message into our stores. We revamped our signage and presentation programs in the stores to show a more pronounced level of newness and value, and we continue to do that as we enter into July. And the learning for us is that as we see a more promotional environment, as we are up against a heavier promotional cadence in factory stores, we have to be nimble. We have to use a variety of levers in terms of messaging and pricing, and we have to run the business for a balance of sales productivity and margin improvement. And that's the approach that we're taking going forward.

Our next question comes from Lorraine Hutchinson. Lorraine Maikis Hutchinson - BofA Merrill Lynch, Research Division: Bank of America Merrill Lynch. Just a follow-up on Kimberly's factory question. Did you find out once you change the promotional cadence, you saw the comp pick back up, and is that what the guidance is based on going forward? And just to follow up on Legacy, happy to hear that things are going well or according to plan. And just any more color you should give us on the outlook for the Full Price store comp? Michael D. Tucci: Okay, sure. The reality is that we did see an improvement in our factory business when we went back to a more aggressive stance in the stores. And it's a channel where we have to constantly find the right balance between pricing, value, newness and achieving the right levels of margin. I think long term, our objective is to continue to deliver growth in this channel, and that's our approach going forward. We do see in the front half of our FY '13 a fairly promotional compare, as well as an environment that we think will become increasingly promotional from a macro standpoint. So we have to be prepared, and we're working the business to drive results, hence our guidance for FY '13. I'm going to pass it to Lew to speak to Legacy on a global level, and then I can add some color here in North America.

Sure. We're just getting Legacy out. I mentioned it's in our North American stores for about a week, and we just launched it in China and in most Asian markets. In Japan, it won't be launched for another -- a few weeks even though we're in some presell activities. Overall, the collection is doing well and it's meeting our expectations. It's early days for us to talk to what it will mean overall globally for the business, and we are taking a more cautious approach, considering the macro environment.

Our next question comes from Erika Maschmeyer. Erika K. Maschmeyer - Robert W. Baird & Co. Incorporated, Research Division: Robert W. Baird. I guess to follow up on Legacy, could you talk about how big you expect it to ultimately be, how long do you expect the lifespan of the launch to be?

Sure. As we've indicated on, the Legacy collection is inspired by very -- great success of product from our archives. And what we've done is create a modern interpretation that is relevant and stylish today and we are confident will be relevant and stylish tomorrow. Our intention is for this to be a multiyear dual-gender platform that will allow us to more strongly differentiate ourselves against competitors since the branding materials detail on styling is unique and authentic to Coach. We have a real confidence that Legacy will be embraced by both women and men worldwide. Michael D. Tucci: I think to add to that, in terms of how we're planning the cadence of the launch, the marketing launch in the marketplace, both from a digital as well as traditional media standpoint, really begins to hit mid-August. We have just launched here in North America our first product flow across our department store channels and our retail stores. We are also refreshing with new styles and colors monthly. We have a significant investment in Legacy as part of our holiday gifting strategy in our Q2 strategy, which is our most important quarter. And then we will begin some nuance Legacy in the second half of the year, our fiscal year, with additional elements such as the weekend concept and additional expressions from a category standpoint to round out multi-category platform within Legacy. So it's ongoing, it's throughout the year and it's seasonally enhanced.

Our next question comes from Barbara Wyckoff. Barbara Wyckoff - Credit Agricole Securities (USA) Inc., Research Division: It's Betty, [ph] CLSA. How is the performance in Tier 2, 3 and 4 cities in China evolving as new store opens and as sort of the economy sort of changes a bit? Could you talk about last year and then how you think it's going to play out this year?

Victor?

Sure. As we talked about last quarter, we continue to have a performance in Tier 2 and 3 cities, which continues to exceed our expectations actually. We're now, as Lew mentioned in his remarks, in 36 cities, of which 15 locations now in Tier 3 cities. So really, a small percentage of the 79 total locations across China. So still tremendous opportunity ahead for us with approximately 120 cities as we know with a population of 1 million or more. So we continue to be very excited about the distribution opportunity. Barbara Wyckoff - Credit Agricole Securities (USA) Inc., Research Division: And how are the factory stores starting to work out?

Today, we still have a small number of factory locations. We are in 11 locations, including 2 in Hong Kong and Macau. So 9 on the Mainland. A tremendous amount of interest in the channel from developers, both domestic and international. And we are seeing the Coach proposition resonate extremely well, and we're very excited about the long-term opportunity for that channel in that market, especially as more and more traditional luxury brands as well become interested in the channel and helped to raise its awareness with the Chinese consumer.

Our next question comes from Omar Saad. Omar Saad - ISI Group Inc., Research Division: It's ISI Group. I wanted to ask you guys about, it sounds like the category still is very strong. I think you cited 10% category growth for the full year, and it's obviously is one of the largest players and the key players in the category. How are you guys thinking about this, the handbags, the accessories market in the cycle that we appear to be in? It's been so strong in the last few years, especially relative to fashion and apparel, which has been a much weaker segment. Do you think that the consumer spending patterns have changed? Are you confident that the category growth will remain strong? Obviously, a key question given that you're the category leader.

Well, first, Omar, the category has been growing disproportionately for nearly 15 years now. There's been a real shift in women's spending patterns as she has consistently distorted her spending away from apparel towards accessories as a way to update her wardrobe. We expect that to continue. At the same time, we believe that there's a very substantial opportunity globally and as well as here in the U.S. in the men's accessories area where the category is experiencing outsized growth. We mentioned that the category grew by about 25% this year here in the United States, and a majority of that growth came from Coach. So we do feel that while the category, like all discretionary consumer spending, is subject to change based upon consumer sentiment, we believe that the changes will be less pronounced than in other categories.

Our next question comes from Liz Dunn. Lizabeth Dunn - Macquarie Research: Macquarie. I guess my question relates to China profitability, men's profitability, some of the investment initiatives. Can you just update us on where those finished fiscal 2012 and what we should look for, for 2013 to just as sort of discrete items or in combination, what the dilution is? And when some of these investment initiatives should sort of turn into positive territory from a contribution standpoint to the bottom line?

Sure, Liz. First, when we think about China profitability, what we said and what we've seen is that China's four-wall profitability is in the 40% range. So the store contribution is in the 40% range. It is on a path as it achieves growth, and we scaled some of the investments that we're making in infrastructure to be one of our most profitable markets. We don't talk about specific market profitability, but we're very encouraged with the progress we've made on our four-wall profitability. Men's initiative overall is even with the rest of our business. So as we grow Men's, it's just as attractive and as profitable as our basic women's business. So we're very excited about that growth. Lizabeth Dunn - Macquarie Research: Okay. And then just as we think about Asia x profitability in total and some of the investment spending this year, like is this a multiyear thing or should we see some accretion from those businesses through 2014 and beyond?

So what you'll see, Liz, is in the year that -- and we called it out as a one-time impact, is the impact of our overall acquisitions of the distributors. So the half year impact of Taiwan and the impact of Korea and Malaysia will be a drag to overall operating profit and SG&A in the year. As we move through, we work through the inventory, which is written up, and we work through some of the SG&A and re-assort and get these businesses on growth, they are long-term value creating and growth enhancing.

Your next question comes from Brian Tunick. Brian J. Tunick - JP Morgan Chase & Co, Research Division: JPMorgan. Two quick ones. I guess, Jane, maybe some comments on the gross margin guidance this year and maybe beyond? Just trying to get an update on the sourcing initiatives and maybe how the couponing back in factory maybe changes your view of what you think the gross margin opportunity is? And then maybe someone on the product side can talk beyond Legacy. What does the product introduction cadence look like in the coming 12 months versus the previous, as you obviously invested in Legacy and talked about the newness opportunities to drive continued growth in the Full Price business?

Sure. Brian, let's start with gross margins. So first of all, let's take FY '12. We were very pleased in the fourth quarter. We had 80 basis points of expansion, largely driven by channel mix and our sourcing initiative. As we've guided to, we expect to see continued gross margin expansion next year in the 73% range. That is going to be driven by, again, our continued sourcing initiative as we continue to diversify our manufacturing base. It's going to be driven by favorable channel mix. And a prudent approach, as Mike called out, to promotion in the factories. Those 3 factors together are what are giving us confidence to give you the -- to give the guidance of an improved gross margin next year. Overall in newness, we see Legacy as a powerful collection. And its gross margin will be about consistent with our existing business. So we expect no material effect up or down with Legacy.

Our next question comes from Jessica Sean [ph].

I was wondering, as we think about the comp and the full-line stores in the fourth quarter, I was wondering if you could talk about the impact of the rollout of the men's assortment and what that had on productivity and ASP for those stores? And also what is your expectation for the impact as we look to next year? Michael D. Tucci: Sure. A couple of things. One, in the stores that entered the quarter with men's fully positioned, and that was about half of where we landed at the end of the quarter, Men's was a significant driver of comp and productivity. The overall comp impact for the Men's shops that we added in Q4 was less significant because they came in very late at the quarter. You'll see a bigger impact for Men's as the comp driver in FY '13 as we go into Q1 virtually fully established. There are a handful of very significant shop installations happening in the first half of the year based on lease timing. But the majority of our Men's work in terms of impact in shops and stores happened right at the end of the quarter and will have a bigger impact on FY '13.

[Operator Instructions] Our next question comes from Paul Lejuez. Paul Lejuez - Nomura Securities Co. Ltd., Research Division: Nomura. As you look at factory, how much of it was traffic versus a conversion issue? And Lew, as you just take a step back and look at that factory business, how much do you look at the issues there being macro versus maybe having a less inspiring product assortment versus maybe just simply coming up against a ceiling of how many dollars you can move through those boxes?

It's a great question, and it's something we think end about all of the time and work. First, there was a overall decline in the rate of traffic later in the quarter. And this is -- transcends Coach but has impacted us, particularly in June. And what we saw among other retailers starting really in May was an intensification of their promotional activities including the perennial in-store coupon to drive additional shopping. So we do see what occurred in our fleet late in the quarter heavily driven by the macro environment. And as Mike said, we were up against very strong promotional activities last year. In terms of product, certainly product is a factor. We actually introduced a strong platform in the second half of June. We sent deletes from our Full Price, Kristin, and that coupled with the reinstatement of coupons, reinvigorated factory performance. We believe that when we look at factory bricks-and-mortar, both on digital as the nominee channel, that we have huge opportunities to drive additional factory sales. That is basically buying discontinued or made-for-factory product at a discount. And the appetite, of course, among consumers to buy product at a discount is insatiable and growing. Michael D. Tucci: Lew, I think the only piece that I can add, on the operational side of things, we do not -- we work very, very hard on throughput, productivity, managing transactions in stores. In fact, we launched our first phase of mobile POS in factory stores on a pilot basis. We do not see a cap on productivity in our stores from a throughput standpoint. We've been through this for a number of years. We've been through multiple peaks around holidays, and we still see tremendous headroom in terms of productivity and operational efficiency in our stores.

And the only -- the last thing I'll add is that we are going through a project to elevate the in-store experience. And we are in the midst of developing prototypes which we plan to roll out during this year, that will show a much more integrated, broader Coach experience, which will focus off, in addition to bags and accessories, on other lifestyle categories such as sunwear, wearable jewelry, outerwear and -- to name several.

Our next question comes from Jennifer Davis. Jennifer M. Davis - Lazard Capital Markets LLC, Research Division: Lazard Capital Markets. First, let me say that the Legacy assortment looks amazing, so I can see why you guys are so excited about it. And then just a quick clarification, just want to make sure I heard correctly. Comps at Full Price stores in the fourth quarter increased around 6.7%, right?

What we said was that they remain consistent with their level last year. We do not -- last quarter. We do not disaggregate comps. And our overall comps were 6.7% in the third quarter. And what we went on to say was that the entire decline was due to a decline in performance within our factory channel during the fourth quarter. Jennifer M. Davis - Lazard Capital Markets LLC, Research Division: Okay, great. And then my question is for Mike Tucci. Just wondering what your thoughts are on the North American wholesale business, now that you're in charge of that business as well. Do you think that there are any changes to the strategy maybe that you could make there? Michael D. Tucci: I do. Quick learnings there for me. One, we have a strong team here with great relationships with our key partners in the department stores. The department store leaders are very committed to Coach. We're working extremely hard to create the same excitement around Legacy in department stores that we have in our retail stores. And so the investment that we're making around presentation, product assortment, training and development and marketing really carries over into the wholesale channel. That launch was timed exactly to the day with -- when we launched in our retail stores. I think the first major flagship in a department store that's going to be run by the Coach direct team in Herald Square as part of the accessories hall that Macy's is doing in New York is a tremendous opportunity for us and one that we may find some opportunities for a longer term in terms of the operating model. So we're working very hard on that channel to protect our position there as a market share leader and to deliver value to that consumer.

Our next question comes -- our final question comes from Christian Buss. Christian Buss - Crédit Suisse AG, Research Division: Crédit Suisse. I was wondering if you could talk a bit about the marketing investments and the cadence you expect there over the course of fiscal '13, and how that's going to impact the P&L?

Yes. So the marketing investments that we're talking about overall will be more front-end loaded. As we talked about we are distorting our marketing early in the year to support Legacy so you will see it, especially in the first quarter. And as we move through the year, we will be investing through the year. In aggregate, our incremental marketing investment we're expecting to be about $0.04 to EPS, a little more than $0.04 to EPS. Christian Buss - Crédit Suisse AG, Research Division: Okay. That's very helpful. Wondering if you could also talk about the concession shop with Macy's and what the thinking is there and whether that might become a model on a go-forward basis for North America?

Let me begin by saying that outside the U.S., all of our shop-in-shops are leased shops. These are -- they are all concession shops where we pay based on performance and, in some cases, a guaranteed minimum threshold. So this is really the prevailing model outside the United States, and we've enjoyed great success with that model. In the U.S., the situation is quite different, as department stores have maintained their direct operation of virtually all of their shops. We don't expect that to change materially. We see Macy's as an exceptional situation. We're partnering with Macy's to really create a global flagship for Coach that will attract tourists, both from the United States and abroad, to Macy's to see our spectacular shop.

Thank you. That’s going to conclude our conference call today. We went a little longer than usual to make up for some of early technical difficulties. But now, I'd like to turn it back over to Lew for a few closing words. Lew?

Let me begin by saying that we know there's a lot of interest in what we announced today. Obviously, some of the metrics were lower than what Wall Street expected. The reality is that we manage our business for the long term, and we have real clarity about what we're doing and where we're traveling and are very confident in our long-term growth prospects and our ability to drive our business at a double-digit pace. We have an exceptionally strong franchise. We have a seasoned and nimble management team and operating team, and we're driven to win. And I believe that you will find that in the seasons and years to come, we will prevail as we have over the years and decades. Thank you, everybody.

Thank you. This does conclude the Coach Earnings Conference. We thank you for your participation.