Allison C. Malkin - Senior Managing Director Kosta N. Kartsotis - Chairman and Chief Executive Officer Michael L. Kovar - Chief Financial Officer, Chief Accounting Officer, Executive Vice President and Treasurer Jennifer L. Pritchard - President of Global Retail Division

Ike Boruchow - JP Morgan Chase & Co, Research Division Amanda Sigouin - Jefferies & Company, Inc., Research Division Anna A. Andreeva - FBR Capital Markets & Co., Research Division Rick B. Patel - BofA Merrill Lynch, Research Division Omar Saad - ISI Group Inc., Research Division Neely J.N. Tamminga - Piper Jaffray Companies, Research Division Oliver Chen - Citigroup Inc, Research Division Dorothy S. Lakner - Caris & Company, Inc., Research Division John D. Kernan - Cowen and Company, LLC, Research Division Lizabeth Dunn - Macquarie Research Barbara Wyckoff - CLSA Asia-Pacific Markets, Research Division

Good morning, ladies and gentlemen, thank you for standing by. Welcome to the Fossil, Inc. Third Quarter Fiscal 2012 Earnings Conference Call. [Operator Instructions] This conference is being recorded today, Tuesday, November 6, 2012. I would now like to turn the conference over to Allison Malkin of ICR. Please go ahead. Allison C. Malkin: Thank you. Good morning, everyone. Before we begin, you should be aware that during this conference call, certain discussions will contain forward-looking information. Actual results could differ materially from those that will be projected during these discussions. Fossil’s policy on forward-looking statements and additional information concerning a number of factors that could cause actual results to differ materially from such statements is readily available in our Form 10-K and 10-Q reports filed with the SEC. In addition, Fossil undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise, except as required by law. If any non-GAAP financial measure is used on this call, a presentation of the most directly comparable GAAP financial measure and reconciliation of this non-GAAP financial measure to GAAP will be provided as supplemental financial information to this release under the Earnings Release section under the Investor Relations heading on Fossil’s website. Please note that you may listen to a live webcast or a replay of this call by visiting Fossil’s website and then clicking on About Us at the bottom of the home page, and then on webcast under the Connections heading. Now, I would like to turn the call over to FOSSIL's Chairman and CEO, Kosta Kartsotis. Kosta N. Kartsotis: Thanks, Allison. Good morning, everyone. And joining me today to discuss our third quarter results are Mike Kovar, our CFO; and Jennifer Pritchard, our President of Retail. First, we want to thank and to express our thoughts and support for all those impacted by Hurricane Sandy. We wish a speedy recovery to all those affected. Our third quarter net sales of $684 million represented a 10% increase from last year in constant currency. These sales results were a bit lower than we had projected as our overall sales in Europe ended the quarter down year-over-year. However, we were able to surpass our earnings guidance due to strong double-digit growth in both our direct-to-consumer business and our Asia-Pac wholesale business and support it with strong expense management and an improved gross margin versus our expectations. Our adjusted earnings per share of $1.28 represents a 17% increase over the prior year quarter. Globally, watch sales increased 15% in constant currency, including SKAGEN, which represented 5% of the increase. This marks our third year of double-digit increases in Q3 watch sales, following a 20% increase in 2011 and a 49% increase in 2010. Solid gains across our FOSSIL and multi-brand watch portfolio resulted in increased market share and showed the strength of our brands and the resilience of our operating model. Our non-watch related sales decreased 3% in constant currency. The different sales was primarily the result of our relaunching of the FOSSIL jewelry business and some challenges in our leather business. As we have discussed in prior quarters, we are repositioning our global jewelry assortment to align this offering with the brand aesthetic of the overall FOSSIL brand. While the results of the reintroduction of the line in our own stores this quarter are very positive, we are still transitioning in line in our wholesale accounts during Q3, as we prepare to relaunch this into the channel in Q4. As a result, our wholesale sales continued to diminish during the majority of our third quarter and negatively impacted sales. With early sales results positive, we expect to see sales growth improving in the category as we continue our global rollout at wholesale in Q4. On the leather side of our business, as we identified earlier in the year, we missed on leather sales by not moving quickly enough or deep enough into the trend towards color. Our vintage offerings, with strong earth-tone colors, have played well for us in the last couple of years. However, we did see a significant shift toward color in the spring this year, and we missed some opportunity here. We also noted a drop-off in sales as we increased overall pricing, resulting in not enough depth at our operating price point levels. We have addressed these -- both of these issues and are expecting improving trends in our wholesale channel in early 2013. With growth in our global watch sales and a slight decline in our alarm watch categories, overall wholesale sales increased 7% in constant dollars and just under 3%, excluding SKAGEN-branded sales. In North America, constant dollar sales increased 6% or 1%, excluding SKAGEN, primarily on the strength of our watch business. Across geographies, U.S. sales rose 5%, Mexico grew 26% on a small base, and Canada was essentially flat against the prior year. Negatively impacting our U.S.-based wholesale sales during the quarter was a tendency from some of our wholesale partners to push inventory receipt out of the third quarter and into the fourth quarter. As a result, our October wholesale shipments in the U.S. were up 20% over last year. While we don't expect this type of growth for the balance of the quarter, we do believe we will see a much improved performance compared to our third quarter results. Also, in early October, we purchase the remaining 47% interest in our Mexico joint venture, which will enable us to fully maximize the opportunities we've seen in this rapidly developing region. In Europe, a further weakening of the macro environment, combined with our non-watch category issues, left sales flat in constant currency and down 5%, excluding SKAGEN. We are not expecting improvements in our performance in Europe wholesale for Q4. However, we do believe our performance this year has left some sizable opportunities for us next year, assuming the macroeconomic -- the macro environment does not further weaken. And on top of these opportunities, we believe the SKAGEN business has a significant growth ahead of it in this region. Our wholesale business in Asia increased 27% in constant currency, 2% of which was attributable to SKAGEN. Our business in China nearly doubled again during the quarter. And while still small in scale, our growing management team and infrastructure in the region is continuing to advance the position of our offerings in the market. Japan also continued a strong double-digit growth, which bodes well for continuing growth throughout Asia. We continue to invest in the concession store model within Asia, opening a net 31 new concessions this year, ending the quarter with 247 operating concessions. And we are planning to open another 15 to 20 locations in Q4. While our investments in infrastructure in Asia have resulted in some expense deleveraging, we believe we will experience operating leverage in the back half of 2013 as we accelerate our concession growth and comp our expenditures in the region. Direct to consumer sales were up 19% for the quarter. The comp store sales increased 2% globally, following a 14% quarter -- 14% gain in the quarter last year and a 20% comp gain in 2010. While a decline in Europe comps weighed down our comp growth overall, it was overcome by solid growth in Asia and in the United States, allowing us to post our 18th consecutive quarter of comp store sales increases. Mike will take you through the details of the store count, because as we've said before, we are placing a greater emphasis on building out our global outlet store network, with 57 of our 81 new store openings this year being outlets, both FOSSIL and watch station outlet stores. We are very pleased with the performance of the stores and compared to other companies in our industry, our current outlet business represents a much smaller percentage of our total revenue. We believe there's an opportunity to expand this business globally in a balanced way that would enable us to improve the customer experience and to improve our ability to efficiently liquidate obsolescence as we continue to grow our overall sales. This will be very positive for the company and have the impact of making our entire business model more robust. Turning to SKAGEN. The brand contributed $25 million in sales and was accretive to our third quarter operating earnings. During the third and early fourth quarter, we successfully completed the integration of SKAGEN's distributor business and now operate almost all activities related to the brand through our 23 owned subsidiaries. With this process behind us, it will allow us to accelerate the growth potential we believe exists in the FOSSIL -- in the SKAGEN brand name. During 2013, in addition to benefiting from the higher sales and profits related to our direct control of the operations, we are planning to unveil a new global jewelry line and to remodel some of our existing 13 store locations. Long term, we believe SKAGEN can become a sizable brand with a unique positioning in accessories, given its rich Danish design heritage. As to our financial position, our balance sheet remained strong. We ended the quarter with $143 million in cash, even while acquiring SKAGEN earlier in the year and after spending $262 million on our stock buyback program since the third quarter of last year. Since we announced the $750 million buyback in August of 2010, we have purchased approximately 8.8 million shares of common stock at a cost of approximately $672 million, principally financed through our operational cash flow of the company. During the fourth quarter, we believe our cash flow will significantly increase in comparison to the last couple of years, based on the projection that our year-end inventories will be flat to last year's level. In summary, we are pleased that we were able to achieve double-digit earnings growth, beating our previous estimates and overcoming some of the challenges we encountered in the quarter. We believe this reflects the tremendous advantages and the strength of our diversified business model. We are optimistic as we begin the fourth quarter and are ready for the holiday selling season, with an excited assortment of product and compelling stories at the point-of-sale. We believe we are well positioned to gain market share globally and to move our many initiatives for growth down the field. Before I turn the call over to Mike, I would like to take a moment to speak to our recent management changes. Mark Quick, who has left the company, has been with the company since the mid-90s, retired late last month. Mark made significant contributions to the company and we look forward to continued insight and advice as he joins our Board of Directors. Over the past few months, we have been transitioning Mark's various responsibilities, some to Tom Kennedy, who was recently promoted to EVP; some to Jennifer Pritchard; and some to John White, who recently joined us as our Chief Operating Officer. As part of this restructuring, we have aligned the management of the company to be even more brand driven instead of by category or channel. We believe this structure is more appropriate for a global life sale -- lifestyle brand in today's world and aligns us to communicate the most compelling and consistent stories to our customers. We have also added significantly to our management ranks over the past few years, with both internal promotions and external hires in the United States and around the world, and most notably, in Asia. It is quite inspiring to see the depth of our talent globally and their ongoing growth and development. In closing, as we announced a few weeks ago, Mike Kovar has decided to retire from Fossil in the next few months. We expect to be announcing Mike's replacement within the next week or 2. I think you will all agree that Mike has done a terrific job winding us through our journey over the past 12 years, and we wish him all the best. Mike? Michael L. Kovar: Thanks, Kosta. Good morning, everyone. I'll start off by highlighting our reported third quarter 2012 versus 2011 results from this morning's press release. Net sales increased 6.4% to $684 million compared to $643 million. Gross profit rose 6.1% to $382 million or 55.8% of net sales compared to $360 million or 55.9% of net sales. Income before income taxes increased 1.8% to $114 million or 16.6% of net sales compared to $112 million or 17.4% of net sales and diluted earnings per share rose 15.6% to $1.26 on 61 million shares outstanding compared to $1.09 on 63.8 million shares outstanding. From the sales mix perspective, both our direct-to-consumer business and our Asia wholesale business increased their share of the sales mix by about 210 basis points, with the decrease coming principally from our European wholesale business. Specific to our wholesale operations, North America based sales, which include our operating activities in the U.S., Canada and Mexico, as well as sales to third-party distributors in South America, grew by $13 million or 5.6% to $254 million. Excluding approximately $1 million from unfavorable currency comparisons to Q3 last year, North America Wholesale sales increased by 5.9% and included about $12 million in sales related to SKAGEN. Sales from our Europe Wholesale operations decreased by $15 million or 8.3% to $163 million. Excluding currency that unfavorably impacted sales by $16 million, Europe Wholesale sales grew by 0.4% and included about $10 million of sales related to Skagen. Sales from our Asia wholesale operations increased by $19 million or 24.2% to $98 million. Excluding currency that unfavorably impacted sales by $2 million, Asia wholesale sales grew by 26.6% and included approximately $2 million of sales related to the SKAGEN brand. Relative to our concession business in Asia, we added 25 new locations during the quarter and closed 4. And as Kosta mentioned, we ended the quarter with 247 total locations. We expect to open an additional 16 locations in the fourth quarter of the year and close 2. For the third quarter, concession sales increased by 23.5% with comp sales growing 4.9%, which is a marked improvement from the comp increase of 1% during the second quarter of this year. Specific to our direct-to-consumer business, sales increased by $24 million or 16.3% to $169 million. Excluding currency that unfavorably impacted sales by $4 million, direct-to-consumer sales grew by 19%. Cost of dollar comps in our retail stores were 1.8% in Q3 and, our e-commerce sales increased about 1% for the quarter or 4% on a constant dollar basis. Globally, we ended Q3 with 450 stores, 217 of which were outside of North America, and we occupied 811,000 square feet compared to 669,000 square feet at the end of Q3 2011, an increase of 21.2%. This included 250 full-priced accessory stores, 145 of which were outside of North America; 138 outlet locations, including 50 outside of North America; 33 closing stores with 2 outside of North America; 15 full priced, multi-brand stores, including 12 outside of North America; and 14 SKAGEN-branded stores, with 8 of those outside of North America. This store count at the end of Q3 compares to 379 stores, 173 of which were outside our North America at the end of Q3 last year. And last year store count included 236 full-priced accessory stores, 100 outlet locations, 32 closing stores, 11 full priced multi-brand stores. And during the first 9 months of this year, we opened 53 stores and closed 15. We are currently on track to open an additional 28 stores by the end of the year, while closing 1 additional location. Q4 openings will be evenly split between U.S. and international locations. From a watch and non-watch category perspective, total watch sales increased $53 million or 11.3%, 14.8% x currency to $517 million and included approximately $25 million related to SKAGEN product. On the non-watch side of our business, leather product sales decreased by $2 million or 1.5%, however, up 1% x currency to $107 million. Leather sales growth was primarily driven by our direct-to-consumer segment and partially offset by sales decreases in our wholesale business. Jewelry sales decreased $7 million or 14.8%, 9.4% excluding currency to $40 million. While the continued launch of MICHAEL KORS jewelry benefited North American sales, this favorable impact was offset by a decline in our global FOSSIL jewelry business as a result of the repositioning of the assortment. Gross profit increased 6.1% to $381.5 million in the quarter in comparison to $359 million in the prior year third quarter. Gross profit margin declined 10 basis points to 55.8% compared to 55.9% last year. Foreign currency exchange rates negatively impacted gross profit margin by 185 basis points. However, excluding the impact of currency, gross margin improved as a result of favorable product channel mix, select price increases across certain watch businesses and an improved input cost environment. While we are still seeing pressure on labor rates in China, our SKU rationalization and automation initiatives have increased our production efficiencies. Additionally, we are benefiting from lower component cost as well, primarily due to recent reductions in the price of stainless steel. For the fourth quarter of 2012, we expect gross margin to continue to benefit from these positive influences. Also with the growth of outlet doors during the year, we will be able to clear more discontinued product through our own outlet channel versus lower margin liquidators. Currency will also be less of a headwind in Q4 in comparison to the first 9 months of this year. And as a result, we currently expect gross margins to exceed 57% in Q4 in comparison to the 56.1% level in last year's fourth quarter. As a percentage of sales, operating expenses increased to 39.3% in the third quarter compared to 37.4% in the prior year quarter. For the third quarter, operating expenses were favorably impacted by approximately $7.8 million as a result of the translation of foreign-based expenses into U.S. dollars. Nonrecurring costs associated with SKAGEN acquisition amounted to $2 million during the third quarter. On a constant dollar basis and excluding nonrecurring expenses related to the SKAGEN acquisition, operating expense increases were primary related to the addition of SKAGEN operating costs, expenses associated with the increase in the number of company-owned retail stores, as well as expense increases across our Asia wholesale segment. Increased expense levels in our Asia wholesale segment is primarily attributable to the continued strategic investments in the region, primarily related to headcount additions and concession-related costs. For the first 9 months of 2012, we incurred SKAGEN-related acquisition and transition costs of $7.4 million, partially offset by $3.6 million favorable gains resulting from the mark-to-market valuation adjustments on the contingent purchase price liability. For Q4, we expect SKAGEN acquisition and transition cost of approximately $2 million or $0.02 per diluted share. As a percentage of net sales, operating income decreased to 16.5% of net sales in Q3 compared to 18.5% last year. Operating income was negatively impacted by approximately $17.7 million as a result of the translation of foreign-based sales and expenses in the U.S. dollars. However, while excluding the impact of currency, our operating margin remained relatively unchanged at the 18.5% level we achieved in the prior year quarter. Other income and expense improved favorably by $8.8 million during the quarter, primarily the result of hedging gains versus hedging losses last year. At prevailing forward currency rates, we're estimating that outstanding forward contracts with scheduled settlement dates in the fourth quarter of this year will result in hedge gains of approximately $0.5 million. Our effective income tax rate was 29.8% for the third quarter. And post-Q3, we were able to release certain tax reserves and record benefits for additional tax refunds related to closing prior year tax audits. This will result in an approximate $10 million reduction to Q4 income tax expense, lowering our Q4 effective tax rate to an estimated 25%. Third quarter net income increased by 10.3% to $76.8 million or $1.26 per diluted share, inclusive of an unfavorable $0.10 per diluted share decrease related to foreign currency. And excluding certain nonrecurring expenses associated with our acquisition of SKAGEN, adjusted diluted earnings per share were $1.28 for Q3. Now turning to look at the balance sheet. At the end of the third quarter, we had cash, cash equivalents and securities available for sale totaling $143 million, compared to $240 million at the end of the prior year quarter. We also ended the quarter with $185 million of debt. The decrease in cash and increase in debt over the last 12 months was principally related to the acquisition of SKAGEN during the second quarter and the continuation of our stock repurchase plan. As of today, we have approximately $78 million left under our $750 million buyback that was authorized in August of 2010. And based upon the current stock price and the historical parameters within our 10b-5 plans, we anticipate closing out this authorization by early 2013. The inventory at the end of the quarter was $589 million, an increase of 15% in comparison to $512 million at the end of Q3 last year. The increase was larger than we expected based upon our sales shortfall during the quarter. However, we believe we have adequately adjusted our fourth quarter receipt plan and project year-end inventory levels on an absolute dollar basis to be flat to last year. Accounts receivable increased by 6.4% to $291 million at the end of Q3 compared to $273 million at the end of the prior year quarter. And days sales outstanding for our wholesale segments for the third quarter was 50 days in comparison to 49 last year. During the first 9 months of 2012, we had capital expenditures of approximately $75 million and are expecting fiscal year 2012 CapEx of approximately $120 million. Depreciation and amortization expense for the first 9 months totaled $44 million, and we estimate full year 2012 depreciation and amortization slightly north of $60 million. Now turning to our outlook. As a reminder, we provide guidance based upon the current prevailing rate of the U.S. dollar compared to other foreign currencies for countries in which we operate. As Kosta mentioned, we are not expecting an improved performance in Europe for Q4. As a result, for the fourth quarter, we currently expect reported net sales to increase approximately 12% with constant dollar net sales increasing 13%, down about 400 basis points from our previous guidance. In comparison to $1.87 diluted earnings per share in Q4 last year, we are estimating fourth quarter reported diluted earnings per share in the range of $2.41 to $2.44. And this is inclusive of a $0.17 benefit related to the expected lower tax rate. And excluding the tax benefit and additional non-reoccurring costs related to the SKAGEN acquisition, we expect adjusted diluted earnings per share in the range of $2.26 to $2.29, which is in line with our previous guidance. We believe higher gross margin levels will offset our reduced sales growth expectations. We also expect operating expenses to deleverage by approximately 100 basis points in Q4, primarily due to a higher mix of sales attributable to our direct to consumer and concession businesses, both of which carry a higher SG&A component. Additionally, we did delay some marketing initiatives originally planned for Q3 into Q4. Our operating margins were expected to be relatively flat to last year's Q4 level of 21%. We estimate fiscal year 2012 reported diluted earnings per share in a range of $5.53 to $5.56. Adjusted full year diluted earnings per share, again which excludes the tax benefit in Q4 and cost related to SKAGEN acquisition, are expected to be in a range of $5.42 to $5.45. Our adjusted full year guidance represents an 18% increase to last year's diluted earnings per share of $4.61. And now, I'll turn the call over to the operator to begin the question-and-answer portion.

[Operator Instructions] Our first question comes from the line of Ike Boruchow with JPMorgan. Ike Boruchow - JP Morgan Chase & Co, Research Division: I guess could you walk us through the European wholesale channel? What you kind of saw over the last couple of months by geography, by product? And I guess, if you exclude the SKAGEN benefit you got in the region, it looks like the organic growth was down around mid singles. Is that something that we should expect for Q4, and is that -- any color there in that region? Michael L. Kovar: Ike, yes, I'll take that question. This is Mike. As we said, we don't expect really any change in the direction of our Europe growth in terms of Q4. We're obviously being cautious relative to the overall environment. From a country level, we did see a bit of the situation spread in some of the Northern markets that we operate in. As we've said, on the previous quarter call, we were still seeing significant growth in terms of France in the U.K. And while the U.K. has held up relatively well over Q3, we did see a deceleration in terms of the France business and also a slight deceleration in terms of the Germany business. From a product perspective, it is across the board, but heavily influenced by the fact that the jewelry business is down quite substantially as we kind of relaunched or regear for the launch of the new FOSSIL jewelry line in the wholesale channel in Q4. We have seen a marked improvement in our retail stores in Europe. In fact, our comps in Europe in Q2 were high single-digit declines. And over the last 6 to 8 weeks, we've seen that improve to anywhere from flat to minus 1% or 2%. And we attribute that to additional traffic that we believe the new jewelry assortment is driving in our own stores. Again, we don't have that assortment fully launched in the wholesale channel there, so there could be some upside in terms of the jewelry business in Q4. Kosta N. Kartsotis: Also looking at some of the market share information we got from Europe shows that even though our sales were less than last year, that we still are gaining market share in the market. So we're taking this as an opportunity to be very aggressive in the market and continue to gain share. We've got a lot of momentum behind some of our brands, including the addition of SKAGEN, SKAGEN jewelry. We just launched a new watch, the Britain -- the BURBERRY brand is doing very, very well and penetrating pretty well in the market. So we remain very positive about the long-term prospects for us to continue to gain share and grow in Europe, and we'll continue to move forward with that. Allison C. Malkin: And Mike, if I can add one last thing. In the European market as well, we've seen nice improvement in terms of their selling KPIs and conversion, which I think is also supportive of the changes that we've made in the assortment and the addition of jewelry. Ike Boruchow - JP Morgan Chase & Co, Research Division: Okay, great. Secondly, on the FOSSIL brand, could you guys kind of talk about the trajectory there? And then specifically, by geography, are you seeing different responses by the customer in Europe versus the U.S. versus Asia? Any color there? Michael L. Kovar: I would say on the wholesale business, we're seeing a little bit of deceleration in terms again, of Europe and even somewhat in the U.S. Although, we think a part of the U.S. deceleration in Q3 was related to the shift in a lot of our large customers delaying holiday receipts into Q4. In fact, as Kosta mentioned, our October shipments were actually up over 20% in the U.S., and obviously, FOSSIL plays a big part in that. In Asia, we're still seeing the brand grow nicely. I think a testament to the brand growing is the continued comp performance on our own stores for the brand. We were up 1.8 in the quarter with the U.S. growing at low singles, Asia still growing in the high singles. And as I mentioned, Europe down in the high singles. So we think that's something that obviously is kind of the essential place for consumers that are aware and knowledgeable about the FOSSIL brand. And we continue to see a nice performance in our own environments. Kosta N. Kartsotis: And on the product side, if you look at our most recent catalog, which is online right now, you'll see a great compelling offering in the gift items. We, obviously, are in a transition somewhat on our handbag business and also in our jewelry business, but we've identified some ideas and categories and items that we think are going to get us to a better place. So in addition to that, in watches, we've identified a couple of new trends that are showing very positive results that I think bode well for the back half of this year and through next year. So all in all with the brand and the directions moving, especially with our realignment of the company, we're going to focus more on a brand-driven merchandising company. We think we're going to have some very strong growth over the next couple of years. Ike Boruchow - JP Morgan Chase & Co, Research Division: Great. Last one, quickly. I guess on the SG&A, you're expecting a little more deleverage in Q4. Could you talk about the first half of next year? Do you expect those Asian investments to kind of continue for the next 6 to 9 months and then start to see a little leverage in the back half of next year? And kind of, how you frame up those -- the spending over there in Asia? Kosta N. Kartsotis: Yes, as I mentioned, Ike, the Asian spend is an ongoing situation, but obviously, we do think that we have an opportunity to see some leverage created from anniversary-ing a lot of that spend that's transpired over the last 15, 18 months in the back half of next year. So with the run rate we have this year, it's still going to impact the leverage situation in the first half of the year, but we do see some opportunity to start leveraging those investments against continued solid sales growth as we expand our concession footprint in the region.

[Operator Instructions] Our next question comes from the line of Randy Konik with Jefferies & Company. Amanda Sigouin - Jefferies & Company, Inc., Research Division: This is Amanda Sigouin on for Randy. Just wanted to ask a little more about the North American wholesale segment, the shift that you talked about from 3Q into 4Q. Is there any more -- I know you talked about October being very strong, at up 20%, but could you help us kind of understand the impact to 3Q and how we should think about the benefit to 4Q overall, as far as the top line there? Michael L. Kovar: I think if you look at the absolute increase in shipped dollars, in October, we're talking in excess of $20 million. So we don't know specifically what portion of that could have shipped in Q3 versus what is shipped in Q4, but we obviously do know, based upon how the delivery dates were established, that a significant portion of that business did ship out of Q3 into Q4. We also talked about, in the last call, that we were expecting that to be impactful as well relative to the calendar, excluding a couple of days in September this year in comparison to last year. But I would say, a solid portion of that improvement that we saw in October was just the shipped in terms of the order patterns. Kosta N. Kartsotis: I would say also, part of this reluctance on part of some retailers globally, actually, to take less inventory is just a matter, I think, of global visibility. Companies tend to be more conservative when they don't have a lot of visibility on what's going to happen, so they're taking deliveries later. And I think we're seeing that, not only in United States, but somewhat globally. As far as our metrics go, looking at our inventory is at the point of sale relative to sales. We look like we're in a very good situation going forward, and we're expecting some strong sales in the fourth quarter. And we've got inventory staged and ready to flow, and we think we're in pretty good shape.

Our next question comes from the line of Anna Andreeva with FBR Capital Markets. Anna A. Andreeva - FBR Capital Markets & Co., Research Division: Not sure if I missed that, but did you call out what was the total of FOSSIL watch sales during the third quarter? I'm just curious how the FOSSIL brands take out versus the licensees. And maybe any comments how MICHAEL KORS is doing for you guys, as well as just the portfolio of other brands? Are there any licenses out there that are lagging that you could potentially call out? I was also curious on SKAGEN. Looks like top line came in a little softer, at least, compared to what we were modeling. What was SKAGEN's contribution in the third quarter? Michael L. Kovar: First, starting with Skagen, as we said, sales were a little softer in the quarter than we expected, mostly because we're in transition from their distributors to our own subsidiary. So there's kind of a lag in shipment there, but we think we're -- having gone through that change, we think we're right now in a position to really turbo charge sales globally to really give the full impact of our distribution power globally to the SKAGEN brand, especially going through our own subsidiaries. In some cases, direct to our own concessions is a huge uplift for that. As far as the other brands, we are still continuing to see very strong growth globally in the quarter. And it's broadening out around the world, that remains. We're seeing very strong results from the FOSSIL brand. As the nature of the portfolio, we do have some brands that are a little weaker, and we've got some opportunities, I think, to fix some of the brands in some categories. That's part of the portfolio effect that are on balance with the diversification and our innovation and the design and our execution. We think we're in pretty good shape to continue to gain market share globally with the portfolio that we have. Anna A. Andreeva - FBR Capital Markets & Co., Research Division: So Kosta, was the FOSSIL brand positive then, during the quarter? Kosta N. Kartsotis: Yes. FOSSIL was actually up 3% on a globally constant dollar on the quarter in watches. Anna A. Andreeva - FBR Capital Markets & Co., Research Division: Okay. And just curious, what was the bottom line contribution from SKAGEN? I think it was $0.02 in the second quarter that you guys called out? Kosta N. Kartsotis: $25 million in sales and about $0.02 of earnings.

Our next question comes from the line of Rick Patel with Bank of America Merrill Lynch. Rick B. Patel - BofA Merrill Lynch, Research Division: Just a question on your outlook business. Can you talk about the differences that you see in margins for selling a product through the outlet channel versus using liquidation channels? And as you think about that business longer term and you scale that business -- and you scale that segment, do you see the potential to create made-for-outlet products? Kosta N. Kartsotis: Well, actually, as we've said before, the operating income of those outlet stores is one of the highest business units we have on the company. And we actually are able to sell obsolete products through that channel at a much higher rate. And as you look at, over the last couple of years, the company's almost doubled in the last 3 years, and it's created -- obviously, as we've gotten better at managing inventory on an overall basis, just the sheer size of the increase means that we had increasing amounts of liquidation. So to build out a larger, global outlet network that can handle larger quantities that will have a, we think, a pretty strong impact on the overall profitability and just flexibility of the company. So in addition to that, the outlet stores, obviously -- increasingly, as that market changes quite a bit and seeing a lot more traffic. And it's becoming one of those issues where you can really kind of build the brand with the right customer experience, which means long term, I think it gives us the opportunity to make product for that channel that will give us a better customer experience at the point-of-sale. In some markets, you can imagine we're -- we are in an outlet center with liquidation mostly, and we're competing with the guy next door that's 100% made for -- their assortment sometimes and our customer experience looks better than ours. So we think we have an opportunity, on a very balanced way as we've said, to open up that channel. Again, the one thing to remember is that we have, in our total company, if you look at the amount of product that we sell that's not at regular price, and that includes both in our wholesale channel and also just to our regular customers, and most of what we sell is a regular price, which as opposed to most brands typically apparel, even at wholesale level through retail channels, most of the products they sell is on sale. In addition to that, they have huge outlet operations. When we look at that, and we measure against our peer companies, we were a very, very tiny percent of our total sales are actually off-price. So we feel like we have an opportunity to expand that quite a bit even after doing that for a couple of years going forward, building our global network. We think even after this project, we will still be a very small percent of our total overall sales will be through outlets, but it will have the impact of making the entire company's business model more robust. Michael L. Kovar: I can -- on the margin question. Our outlets operate at somewhere between a 55% and a 60% margin versus when we're returning product to the liquidation channel, that's usually somewhere in the 15% range. And last year, as we got heavy on discontinued product, I think our contribution margin from liquidation sales was less than 10%. I will also remind folks that, of the 81 stores that will open this year, I think 57 of them will be outlet stores, and more than half of those, I think, are outside the United States. So there was also a logistics issue on having to clear a lot of discontinued products historically out of our European and Asian warehouses and getting it back to the U.S. where you had a larger outlet base. Now that we're growing our outlet base in those regions, there's some compromise of cost to move the product around, which will also bode well for the overall margin. Rick B. Patel - BofA Merrill Lynch, Research Division: Great. And then just a question on merchandising. There's some previews out there for the Karl Lagerfeld line. And the product looks very different than anything else you have in terms of the aesthetics and technology. Do you plan to keep these design elements exclusive to the Lagerfeld brand or do you plan to roll out that technology to other brand if they prove to be successful? Kosta N. Kartsotis: Well, the technology that we use for Karl, I think the one watch you're referring to was in the press quite a bit, which is the one that Karl specifically mentioned is the -- use the new technology is where we -- actually, it looks like it has a chain embedded in the side of the case. Actually, it was done through laser technology through some of our automated equipment, some of the factories we use in China. And that same technology, we're using in other places and we'll continue to do so. It has the impact of us being able to make even more detail or even looks more like even finer handmade watches through some of the technology that it kind of dovetails into our entire technology we use in our design offices here in Dallas and also in Switzerland that is a 3D design, CAD technology that goes all the way to the factory floor and is produced by automated equipment that's pretty high tech. It just enables us to open up, not just for Karl, but across our entire spectrum, just unique and different details that are more attributable to each brand than we have.

Our next question comes from the line of Omar Saad with ISI Group. Omar Saad - ISI Group Inc., Research Division: Mike, just wanted to say congratulations on your pending retirement. Michael L. Kovar: Thanks, Omar. Omar Saad - ISI Group Inc., Research Division: Kosta, we'd love to hear you kind of expand upon some of the comments you made in the opening remarks about the shift. I think you were making it in the context of Mark's change in his role. But the shift from more of a product focus, the continuing shift from our product focus to a brand focus, could you elaborate on that a little bit? Where do you see the opportunities? Is it just within the FOSSIL brand, or is it across the entire set of businesses of the company? Kosta N. Kartsotis: So basically what we've done is, really we've been working on this for several years, is becoming more brand driven instead of channel or categories. So if you go back and look at the history of the company, which is typical, is that we had different categories run by different managers really -- being really adaptive to the market they sell through in creating product, which the net result was the brand was more fragmented than it should be. So over time, what we've done is migrated more towards this model and this last restructuring we did, really made it, so that we're a brand-driven company. So that -- all the product engines and the branding and the PR, et cetera, all comes from one place. There's fewer people involved in the initial part of that, which gives it a stronger point of view. And we think when we go-to-market and give a more compelling, more consistent brand message through our stores, through all our marketing on the media, et cetera. We think we're in a really good position to turbo charge the brand and move it forward. There are several initiatives going on also, regarding the globalization of the company. As you know, we are working on really kind of regionalizing through our Hong Kong office and our Basel offices. It's really changing the company from a U.S. company with subsidiaries to a global company. So channeling all of our efforts around brand and going globally, not just on FOSSIL, but all other brands, we think is a big change, a big global initiative for us that's going to give us really benefit for many years to come and really put us in a different position long term. Omar Saad - ISI Group Inc., Research Division: Okay, great. And then just one clarification on Europe. Can you talk about -- are you seeing differences in the European businesses in terms of the wholesale shipments in sell-in versus the sell-through in the department store channels and the third party retail channel, specialty store channel. Are you seeing retailers really just trying to cut back on inventories or kind of limit the inventory growth and reduce their orders, but the sell-through is still okay on some of those channels? Or is it kind of a coincidence, the shipments are weaker as well as the sell-through? Michael L. Kovar: Yes. I think we're seeing the same thing in Europe, especially as a lot of what we sell-through in Europe are small mom-and-pop stores. And they're somewhat reluctant to take inventory, especially when they don't see the environment getting better. So it hits them in their own pocket books, so it's not as -- in the United States, it's all -- I think most of the stores are looking at -- they can take deliveries later, but if the trend changes and they're playing it that way, I think it's very similar to the small stores they sell in Europe is that they just don't feel like there's an upside for them taking a bunch of inventory in September and August if they're not going to sell it until December. So as it plays out, we think long term, we will be in a good situation because of our automated warehouses and our infrastructure enabled us to move pretty quickly and get positive point-of-sale very quickly. But when we look at globally, sell-through rates in the amount of inventory at the point-of-sale, it looks very healthy to us and looks like we're in good position to have a strong sell-through in the fourth quarter.

Our next question comes from the line of Neely Tamminga with Piper Jaffray. Neely J.N. Tamminga - Piper Jaffray Companies, Research Division: I do want to also pass along best wishes to Mike into his next chapter. Michael L. Kovar: Thank you. Neely J.N. Tamminga - Piper Jaffray Companies, Research Division: So I have one clarification question and then a question for you, Kosta. The clarification first is on this watch business, overall, globally, is it still about 50-50 licensed to FOSSIL or owned brands in terms of the contribution? And excluding the distribution increases, obviously, you opened up more stores, would have FOSSIL-branded watch sales actually been down, not up 3%? We're just trying to understand that complexity. And then a big picture question for you, Kosta, is it seems to me on the margin, tastes are shifting back towards leather? Am I crazy for observing that? And just, if that's the case, what would the potential impact to margins and pricing be for you? Michael L. Kovar: Neely, on the question of the FOSSIL performance on the wholesale channel, we would have seen a decline there. Obviously, our store growth benefited overall FOSSIL watch business being up 3%. But I would say that, that performance was also negatively impacted by the fact that we've seen a downturn in Europe and also the shift in some of the wholesale business shifting out of Q3 into Q4 in the U.S. Kosta N. Kartsotis: As far as this shift in handbags, we always have been a very strong player in the leather category, and that remains so. I think there's been a slight shift in taste in leather and some of the changes I mentioned earlier in that the customers are now looking for more lighter weight, maybe even smaller bags. And some of it's more modern vintage than vintage, and that's moving forward. I think that's going to be a big opportunity for us. In addition to that, I think we, as a company, have a kind of large opportunity in fabric and even a signature-type fabric. As you know, some of our competitors in handbags do a rather large percentage of their total business is done on a signature fabric. And we have some of that -- we've been testing in the market -- over the last several quarters, it's doing pretty well. And we think we have an opportunity long term to do more of that, and we think it's going to be a good thing for the overall brand and our overall handbag business long term. Allison C. Malkin: Just one clarification on that. I was actually referring to watch band on the leather side. Could you comment about the taste shifts that are occurring actually in the form of watch bands right now? Kosta N. Kartsotis: Yes. We have seen -- we're seeing a lot of different nuance changes in trends in different brands and categories. We really don't want to comment too much on what they are because we're just now feeding inventory turn. But if you go in our stores, you'll see a different mix in there, and you'll see -- generally, what you see in the store is kind of reflective of the type of stuff we're selling. So I would just comment -- say it that way.

Our next question comes from the line of Oliver Chen with Citigroup. Oliver Chen - Citigroup Inc, Research Division: We do think it's a good decision for the long run with the jewelry reposition, but how long should we see this headwind for sustained, and why did it happen this quarter? We thought it would be over by 3Q. Also, could you remind us the percentage of mix in Europe, that's jewelry, is it around low double digit? Michael L. Kovar: Yes, Oliver, this is Mike. I think what we said on the Q2 call was that we were talking about relaunching the jewelry line in the third quarter, but more prevalently, within our own environment than in the wholesale environment. And the wholesale equipment, we'd still be cleaning up the old line in advance of a much broader launch in Q4. We do expect the business to tick up in terms of the performance against Q3 in Q4. We still feel that Europe's kind of a softening environment, and we're really not sure how the relaunch will play there. But based upon what we've seen happen in our own stores in Europe, we're viewing that as a positive. In total, the jewelry business in the Europe wholesale segment is over 10%, slightly more than it is on a consolidated basis. Consolidated basis, it runs about 7% to 8% of total sales. Oliver Chen - Citigroup Inc, Research Division: Okay. And regarding next year, it seems like you're speaking to positive to the gross margin. Does that mean that next -- you're very encouraged for next year in terms of the cost side and the business mix evolution for 2013? Michael L. Kovar: Well, as we understand and as we've seen in the last year, the cost side can be a very dynamic situation. And while we still continue to expect labor rate increases, as I said, we are seeing a nice progression of SKU rationalization, automation, not only within our assembly facilities, but also within some of our component vendors, that is helping offset the need for labor. We're also seeing certain material costs come down relative to last year. So those things bode well for us in the near term. Should those influences stay the same as we move in the Q -- in the 2013, we do feel like there's definitely some upside in terms of the gross margin performance, especially as we continue to see Asia on our own direct channel as being a larger part of the growth as we continue to move forward. Oliver Chen - Citigroup Inc, Research Division: Okay. And the follow-up is regarding the shift that you saw in North America. Could you clarify, are you seeing that in Europe as well? And was this unexpected? It feels like your inventories are inflated relative to your expectations. Kosta N. Kartsotis: No. We are seeing it globally, as we mentioned before in Europe and in U.S. Asia, of course, is mostly around concession, so we haven't really seen it there. And it was somewhat unexpected. It's out of the normal cycle that we've normally shipped to, so it was somewhat of a surprise to us. Oliver Chen - Citigroup Inc, Research Division: Are you worried about markdown risk on your inventories being elevated? Kosta N. Kartsotis: No, actually, Oliver, just going through and looking at our inventories and the health of them and the currency of it, it's in very good shape. As we've talked about before, we actually have a lot fewer SKUs in the company than we've had in the last couple of years, and that process is ongoing. The benefit of that has been that we have fewer SKUs globally in the warehouse. We're able to ship better, our fill rates are better. We're telling a more compelling, more iconic story at the point-of-sale, and the sell-through rates had been better. So in addition to that, it's had the impact of making our lead times somewhat shorter because we're manufacturing fewer SKUs, which has put us in a position where we think we can get our inventories to last year's level at the end of this year. A part of the increase that we had at the end of Q3 is 15% was just due to a miss in sales plan. But all in all, the inventories are in pretty good shape. Michael L. Kovar: Yes, I would also add our anticipation of inventories being flat year-over-year, in terms of absolute dollars, is on a substantial increase in our store base and the acquisition of SKAGEN. So we're very comfortable with our projections for where inventory balances are expected to be at the end of the year.

Our next question comes from the line of Dorothy Lakner with Caris & Company. Dorothy S. Lakner - Caris & Company, Inc., Research Division: Let me also offer best wishes to Mike. Wanted to just make sure I understood on the leather side of the business, and by that I mean, the handbag and small leather goods. But principally, whether in terms of the missed opportunity on color, are we not expecting any improvement on that until 2013? Is that the case? And then I also had a question on the Britain watch, just what the distribution is like for that product? And also on the Karl Lagerfeld product, what the distribution initially would be there, too? And finally, just wondered if Jennifer could elaborate a little bit on her comments on conversion and efforts to improve conversion in stores? Kosta N. Kartsotis: Okay. First of all, on the leather question, we have -- if you look at our fall -- our holiday catalog that's online right now, you'll see a lot more color, and you'll see a lot more small pieces, small elegant [indiscernible]. So we think in our own stores, we're going to see in the holiday period, an improvement in that overall leather business. It won't fully manifest itself for the wholesale until first quarter next year. And when we look at our spring offerings, they look even more exciting and compelling. So we think we're in a pretty good shape as far as that goes. Now, the Britain watch was actually launched in September globally. And a relatively small number of doors, mostly through their stores and a lot of the better jewelry stores, jewelry and watch stores around the world. And that's gotten a very strong response both in sell-through and just the watch press, in general, on it has been very, very good. It's a very unique and special product, and we think it's going to continue to be a big driver for us over the next couple of years. Karl Lagerfeld was actually launching in February, and it's going to launch in 500 doors all in the same day. So it's kind of a staged launch, which will be online and in 500 doors globally all in the same day. There's kind of a limited-edition approach to the launch. The initial products will be marked with the launch addition on the case back. So it's going to be kind of a special launch, there's going to be a lot of PR. Karl himself has been very gracious and very involved in the project. And it's kind of, we think, started off with a bang. Jennifer? Jennifer L. Pritchard: And relative to the store-selling KPIs, we've been very focused on our KPIs within our direct environment. And in Europe, when we launched the new jewelry line and took a marketing position on it, we saw an immediate change in the traffic patterns and the conversion rate. So we believe that this is a big opportunity for us to continue to build upon the strength of the new jewelry launch.

Our next question comes from the line of John Kernan with Cowen and Company. John D. Kernan - Cowen and Company, LLC, Research Division: Just want to go back to the inventory theme again. With the themes flat at year end, are you worried that, that could constrain your potential top line into next year? Kosta N. Kartsotis: Well, we are watching it very closely, but the big driver of this is, as we said, we had a lot fewer SKUs, and it's more consistent globally. Now, if you go back 3, 4 years ago, we had somewhat a different product assortment in different countries, et cetera, and it's a lot more fragmented. That's been a big part of it. And as also, as I mentioned before, is just the fact we have fewer SKUs, it's enabled us to have our lead times to be faster, which is also giving us the ability to respond quicker, et cetera. And we do think that there's opportunity ongoing for us to even get a shorter lead times. So we have a number of initiatives in place to do just that. On our supply chain side, we're installing a project life management system, PLM, that we think can help us globally scale the company and with a smaller or lesser increase in inventory over time and really, I think, has a huge amount of advantages for us. And just our overall operating model being quicker is obviously a big advantage. We're focused on doing just that. Michael L. Kovar: Hey, John, this is Mike. I would also add, if you look at last year, our inventories were growing at a faster pace than sales. So on a 2-year basis, the flat to last year at the end of this year, it's just more the normalization of where we need to be going forward. John D. Kernan - Cowen and Company, LLC, Research Division: Okay, great. That's helpful. Then one final question. The infrastructure investments in Asia, obviously, you're earning high returns. Can we expect more unit growth within that concession store base into next year? And has there been any change in your conviction towards having 1,000-plus concessions from Southeast Asia over the long term? Michael L. Kovar: So I think from what we're seeing on the existing store locations, we feel like there's a lot of productivity improvements that can be made. In fact, Jennifer and her organization has been working closely with the folks in Asia to bring a lot more of the metric-driven analysis into the concession environment. Because we don't operate our own point-of-sale systems, we're obviously leveraging the point-of-sale systems in the department store. The information is not as readily available to us as it is in our own stores. But in terms of the KPI measurements that Jennifer talked about earlier that's going on in our own environment right now, we are starting to export a lot of that into the concession management area as well. And we're focusing on training. We've got DMs and regional managers out there that fully understand how we're doing things in a direct model. And they're, obviously, bringing that insight into our concessions in that environment as well. Kosta N. Kartsotis: And in terms of the upside, we do think there's an opportunity for thousands of these concessions. The market is relatively ripe for that. It's a -- there's a huge amount of white space. There's a huge interest in watches and the global brands that we have. There's a follow-on opportunity in the Swiss area, which we'll be penetrating, not only with the Britain just recently, but in addition, we have a FOSSIL Swiss watch coming in. And we'll be doing some EMPORIO ARMANI, Swiss next year. So the sheer size of the market and the potential and the number of concessions is ongoing and very large. We are in discussions with several potential partners to help us accelerate our process over there, so that can be a part of it. We also are working on a potential franchise or partnership arrangement that could be done with -- through some of our stores. But the biggest initiative in the company is building out this distribution in Asia. The team is doing very, very well. There's a lot of momentum and excitement over there. And they're basically on a mission, and there's a massive opportunity that we're coming into, so we continue to be very excited about that.

Our next question comes from the line of Liz Dunn with Macquarie Capital. Lizabeth Dunn - Macquarie Research: I guess, first question, can you give us some sense of sales at point-of-sale in the wholesale channel? The reason I'm asking is just because there's a surprising lack of visibility and some inconsistency in the trends. And obviously, there are shifting patterns that play into it. And so, is there something you could point to in terms of the sales at POS that give you some confidence that the business is healthy? Kosta N. Kartsotis: I would say it's a -- the watch area continues to be one of the strongest areas in the stores. I mean they continue to give it more space and resources and people. I think that just from them looking at their overall situation and looking and saying, "Well, we can take deliveries later and slow it later," and it's not going to impact our sales. Especially in October, sales were relatively slow, traffic slower. So I think they're just making a call that's somewhat conservative. If the trend gets worse, they can lower the amount of inventory, but the practical matter, the watch category continues to be one of the fastest growers in the stores, and also probably, one of the most profitable as well for them. So it's a very favorable category, and we think that's going to be an ongoing situation. A lot of the stores are very optimistic about it. And they're continuing as they remodel stores or as they get capital, they're adding additional space. And we've seen some of the stores adding additional watch counters in their men's department as well, and it's one of the categories that they sell. It's very high sales per foot. And virtually, all of it are regular price, and relatively, high average unit price relative to the rest of the store, and certainly, relative to apparel. We think it's an ongoing opportunity. Lizabeth Dunn - Macquarie Research: So is it fair to say that the sales at POS in the wholesale channel are better than your reported wholesale sales? Kosta N. Kartsotis: Yes. Lizabeth Dunn - Macquarie Research: Okay. And then just one follow-up on the gross margin, if I may. It seems like a pretty significant inflection from where you have been running, what you're guiding to for the fourth quarter, and we're still working through the model. But can you just talk about the magnitude of some of the factors influencing the fourth quarter? How much impact are you expecting from currency as a drag? And then channel mix and raw materials, if you could just sort of quantify what are the biggest factors influencing the improvement in trends? Michael L. Kovar: The most significant would be currency. In Q3 last year, the average euro rate was about 1.43 compared to around 1.26 this year. As we move into Q4, the average rate last year was around 133 and right now, there euro's trading at about 128, 129. So that 185 basis points of headwind that we saw in Q3 will be seriously mitigated in terms of Q4 as the rates have kind of come back to each other. Across all the other influences, we're talking 10 to 20 to 30 basis points as it relates to the impact of higher sales prices. We took prices up on certain watch lines in early first quarter this year or in the first quarter this year. We're continuing to see an influence in more efficient production activities. And as I said, albeit labor rates continue to move up, we're moving a lot of the need for labor out of our environment by focusing on automation. And as Kosta mentioned also, the fact that we can produce a lot fewer SKUs than we have in the past helps in terms of the production lines. On average, our SKU counts this year over last year, probably down about 30%. And then the stainless steel prices, that's something that kind of transpired this year. They're down about 15% year-over-year, and that's also contributing to the betterment and the expectations of the gross margin for Q4.

Our last question comes from the line of Barbara Wyckoff with CLSA. Barbara Wyckoff - CLSA Asia-Pacific Markets, Research Division: Can you talk about the impact of the floor move in Macy's Herald Square in third quarter? The dynamics of when the move was made versus now. What do you expect to happen during the holiday? And then, Mike, could you talk about the percentage of styles and the key accounts that are on EDI replenishment? Kosta N. Kartsotis: Actually, the Herald Square store and the move that's going on there, which is, I think, the watch department's not really going to move to its permanent home until next year, maybe third quarter or so like that. But the overall sales in the area that we're in right now has actually been very similar to what we've had in the past. I think there's -- it's still a very good location. It is actually near where the permanent home is going to be. And there's been, I think, a lot of excitement in traffic in the store, in general, and I think that's -- we benefited from that as well. And I think we're in pretty good shape. It hasn't really impacted, I think, our wholesale business at all basically. Michael L. Kovar: So the key, of course, is newness, are you seeing any significant shifts there? Kosta N. Kartsotis: I think our -- as we've gone to fewer SKUs, I think we've gotten the ability to increase the amount of our business on QRS. I think it's slightly up, and I think that will be an ongoing situation as we get even fewer SKUs and fewer stories. I think it gives us the ability to even drive more sales through that QRS channel.

At this time, I would like to turn the conference back to management for any closing remarks. Kosta N. Kartsotis: Thanks. Should you want a replay of this conference call, it has been recorded and will be available from 10:00 a.m. Central Time today until 12 midnight Central Time tomorrow. And you can call (303) 590-3030 or 1 (800) 406-7325, and enter passcode 4567535, followed by the pound sign. The conference call has also been recorded by StreetEvents and may be accessed through StreetEvents' website at www.streetevents.com or directly through our website at fossil.com by clicking on About Us on our homepage and then on webcast. Finally, should you have any questions that did not get addressed today, please give me a call. Thanks again for joining us today. Our next scheduled conference call will be in February for the release of our 2012 fourth quarter and full year operating results.

Ladies and gentlemen, this concludes the Fossil, Inc. Third Quarter Fiscal 2012 Earnings Conference Call. Thank you for your participation. You may now disconnect.