Paul Marciano – Vice Chairman and CEO Dennis Secor – SVP, CFO, Principal Financial and Accounting Officer Carlos Alberini – President and COO

Jeff Klinefelter – Piper Jaffray Eric Beder – Brean Murray Todd Slater – Lazard Capital Markets Christine Chen – Needham & Company Janet Kloppenburg – JJK Research Chi Lee – Morgan Stanley Betty Chen – Wedbush Morgan Holly Guthrie – Boenning & Scattergood

Good day and welcome to Guess fourth quarter fiscal 2009 conference call. Before we get started, please note that the company will be making forward-looking statements during this call, including comments regarding future plans and outlook. The company’s actual results may differ materially from current expectations based on risk factors included in the company’s quarterly and annual reports filed with the SEC. Now for opening remarks and introductions, I would like to turn the call over to Paul Marciano, Chief Executive Officer of the company. Please go ahead.

Thank you. Good afternoon and thank you for joining us today to discuss Guess' financial results for the fourth quarter of fiscal year 2009. Also joining me are Maurice Marciano, Carlos Alberini, and Dennis Secor. I am pleased to report a very solid quarter today, where we once again set a new revenue record increasing our business by 9% in spite of a challenging consumer environment and strong currency headwind. This period ended the year of dramatic change. We entered the year with 20 consecutive quarters of positive comp, and continued delivering significant revenue growth and earnings expansion. We reported record revenue and record earning on each of the first three quarters of the year. Later, in the fourth quarter we saw rapid economic deterioration. At the very first sign of that market correction, we acted quickly and decisively to streamline operation, reducing inventory ownership, and limit our capital spending. Considering the speed and severity of the crisis and its impact on the competitive environment, our company performed very well during the fourth quarter. Excluding a non-cash charge that Dennis would describe, we exceeded our previously expected earnings for the period growing our fourth-quarter earnings by 12% and expanding our diluted earnings per share to $0.67, a 14% increase over last year fourth quarter of $0.59. With this performance, we close the year to set a new sales record at $2.1 billion and increase adjusted earning by 23% with EPS reaching $2.35. This result highlights the benefit of our diversified business model and the strength of our brand. It also reflects the experience and dedication of our management team during the challenging time. I want to thank every one of them for their continued commitment and for their hard work. Our retail business was the most impacted. We closed the quarter with a total revenue increase of 7% and a same-store sales decrease of 6.5%. Throughout the holiday season, consumers were more selective and certainly more price sensitive. These affected our (inaudible) concept most, but was also hurting our factory stores. G by Guess performed well in the quarter. These stores are performing better and we believe the concept can benefit as fashion conscious consumer are motivated by the stunning assortment and more attractive prices of the G by Guess brand. For the full year, we opened 57 new stores and ended with 425 stores for North America. In Europe, we are once again very pleased with our results in Europe, which performed well even as we faced adverse currency comparison, in that some European economies step into recession like Spain and the UK. Our business in Europe recorded a revenue increase of 31% in euros for the fourth quarter. We expanded our retail business in Europe, which generated positive comp in the quarter and its revenues increased in Europe by almost 50%. We ended the fiscal year with 61 stores. Our strategy to expand into international markets continued to be our top priority. For fiscal 2009, Europe generated almost half of our total operating profit for the company up from 38% in fiscal 2008. Our wholesale segment also grew during the fourth quarter driven by South Korea and China, where we continue to invest with new stores and gain market share. With respect to our licensing business, the current environment has affected our licensees as well. Nevertheless, it was an outstanding year, delivering a double-digit growth for the full year, and the increase was mostly made by watches, handbags and footwear again. Conditions today are unprecedented, but we believe that a company like ours with strong global brands, solid capital structure, strong cash flow and most importantly a seasoned management team are in a best position to (inaudible). Our strategy is very clear and simple, we will preserve our capital and resources. We will protect the integrity of our brand and our customers’ relationship, and continue to invest in key markets where we are under penetrated, specifically in Europe. For capital, we already saw the capital spending. Last year we spent $83 million, far below the $102 million we had planned. We are currently spending only committed retail deals in North America and Europe. Beyond that we will look for opportunities, excellent location with very strong economics that will be acquired. Regarding brand integrity, we continue to work hard to offer product consistency around the world. Our team of designers have been working together to develop a product that has one point of view. We have aligned our calendars globally, so deliveries are also consistent with all markets. With this collaboration, we will enjoy significant commonality for among assortment for certain product categories. Considering our brand position, our product assortment and our price points, we think we can benefit from customers who are already trading down from these other brands. Yesterday, luxury customers represent a good target for us today in most of the product categories we have, and of course customer feedback and service level will continue to be high priorities. Global expansion, as I mentioned before, remains our top priority. Distribution of our brand is still concentrated in only four major markets throughout the world. Countries like Germany, Russia, Spain, Holland, UK and many of the countries in Europe are all markets that we are very under penetrated. We also remain committed to grow our business in Asia. We are continuing to pursue expansion into China. We just began on January 1 of this year direct operation of business [ph] and see the potential to expand in all categories. In the end, (inaudible) that have served guest over our 27 years in business. We run our company prudently staying true to our brand and values, and overall using common sense in every decision we make every day. We have survived and expanded all these years precisely because we have never compromised our brands. In this point, I would like to have Dennis and Carlos to take you through the numbers and our view. Thank you.

Thank you, Paul, and good afternoon. During the quarter, we recorded a non-cash impairment charge amounting to $22 million or $0.15 per share. This was the result of an analysis we performed during the period of our store portfolio, in light of the current economic conditions and future expectations, and it reflects the write-down of the asset base for a number of our stores with the majority of that charge relating to our newer contract [ph]. This charge has being included in our reported GAAP diluted earnings per share of $0.52 for the fourth quarter and $2.28 for the full year. In our press release, we have isolated the charge in our income statement and have also provided a disclosure, which reconciles our GAAP results to adjusted results excluding the charge. During this conference call, all our comments for both the fourth quarter and the full fiscal year exclude this non-cash charge as we feel this provides a more relevant period-to-period comparisons that are consistent and more easily understood. In the quarter, we increased our adjusted net earnings by 12% to $62 million and increased adjusted diluted earnings per share by 14% to $0.67 from $0.59 in last year's fourth quarter. Total fourth-quarter net revenues increased 9% to $561 million. Except for licensing, all our segments contributed to this growth led by Europe, which delivered nearly 60% of the increase despite strong currency headwinds. Total company gross profit decreased 3% to $227 million for the fourth quarter. Greater promotional activity and occupancy deleveraging due to negative retail comp resulted in a 490 basis point gross margin reduction to 40.5%. This margin performance was in line with our previous expectations. Our SG&A expenses were $137 million, essentially flat with last year's fourth quarter, and the SG&A rate improved 240 basis points to 24.3%. We are very pleased with this great improvement as we benefited from infrastructure leverage and the cost reductions we executed in response to the current condition. We also reversed certain performance-based compensation accruals in the fourth quarter given the overall financial performance of the company. For the quarter, the company's operating profit decreased by 6% to $91 million, which includes a negative $8 million currency translation effect. Operating margin declined by 250 basis points to 16.2%. During the period, the volatility experienced in both the currency and equity markets impacted our non-operating earnings also. We reported other net expenses of $6 million in the current quarter or $0.04 per share. This includes mark-to-market charges related to our benefit plan investments, our US dollar-denominated liabilities and foreign businesses, and other non-operating assets. These charges were partially offset by mark-to-market gains in our foreign currency forward contracts. Our effective fourth-quarter tax rate was 26.6%, compared to 42.1% in the prior year fourth-quarter. We closed the year with a full-year tax rate of 32.9% versus a 39.8% rate last year. The decrease was attributable to the fact that this year a greater portion of our earnings have been generated in relatively lower tax jurisdictions. And now I would like to quickly review our revenues and earnings by business segment. In North American retail, during the quarter our comp store sales decreased by 2.8% in constant dollars. In US dollars, however, the decrease was 6.5%. Total retail revenues for the quarter increased by 7% to $289 million. Operating profit decreased to $34 million and operating margin declined 650 basis points to 11.8%. Gross margins declined 600 basis points, given the highly promotional environment and the deleverage of occupancy costs. For the full fiscal year, our same store sales increased 1%, and we increased total retail revenues by 13% to $978 million. Operating earnings declined 10% to $116 million and operating margin was 11.9% versus 15% for the previous fiscal year. Average square footage increased by 13% as we opened 57 stores and closed five. In our wholesale segment, fourth-quarter revenues increased 7% to $70 million. This revenue increase was driven entirely by Asia, with the most significant growth coming from our China business. Our business in Korea grew during the quarter though the stronger US dollar completely offset local currency growth. Wholesale segment operating profit declined to $9 million and operating margin decreased 450 basis points to 13.5% in the fourth quarter. This decline was driven by lower product margins in both North America and Asia due to higher mark downs. Lower quarterly SG&A expenses could not compensate for the lower gross margins and as a result quarterly operating earnings declined. In addition, the operating margin was also impacted by the continued business mix shift for Asia. For a full fiscal year, wholesale segment revenues increased 15% to $296 million, operating earnings declined 6% to $47 million, and operating margin declined 350 basis points to 15.8%. For the quarter, European revenues increased 18% to $180 million. Each of the our European businesses achieved solid local currency growth. Our fourth-quarter results were favorably impacted by our efforts to deliver products more evenly in the year. This occurred both in our apparels and accessory businesses, as more of the spring and summer collection was delivered in the fourth quarter. The favorable impact on this quarter’s revenue was $14 million and on earnings per share it was about $0.04. European gross margins were down slightly due to higher occupancy costs from a greater mix of retail stores. We achieved excellent performance in our management of SG&A expenses, but our spending rate improved by 440 basis points. We have now anniversaried our investments in our headquarters there, and our newer businesses are becoming more efficient. Despite the unfavorable currency environment, operating earnings grew 40% to $39 million, and operating margins improved by 340 basis points to 21.7%. For the full year, European revenues increased 34% to $719 million, operating earnings grew 40% to $169 million, and operating margins expanded 110 basis points to 23.5%, a remarkable performance. Licensing revenue decreased by 15% to $23 million in quarter. For the full year, licensing revenue increased to 11%. Operating margins for the fourth quarter was 86.5% and for the full year 86.2%. Now I will turn our attention to the balance sheet. Accounts receivable increased by $10 million to $264 million compared to the prior year, a 4% increase. In constant dollars, receivables increased 17.5%. Receivables grew primarily in our European business, where DSOs increased modestly. DSOs declined in North America and total company DSO was roughly flat compared to last year end. We are very pleased with our inventory management this quarter, particularly in light of market conditions. We ended the quarter with inventory levels at $240 million, an increase of 3% from last year's fourth-quarter. Our team worked very hard to reduce our inventory position by year-end. During the quarter, we invested $20 million in capital expenditures net of tenant allowances, primarily to support our retail expansion, including 8 new North American stores and 11 international stores. For the full-year, capital expenditures reached $83 million net of tenant allowances significantly less than our plan. Our Board of Directors has approved a quarterly cash dividend of $0.10 per share payable on April 17, 2009, to shareholders of record at the close of business at April 1, 2009. During the quarter, we repurchased 1.9 million shares under our share repurchase program at an average price of $14.43, investing $27 million. We ended the year with the remaining purchase authorization of $140 million. Our cash flow was very strong for the full year as we generated $229 million in operating cash flow. We invested $102 million of capital back into our business between CapEx and other investments. We paid $34 million in dividends, repurchased $61 million of our common stock, we paid $13 million in debt, and still increased our year-end cash reserves by $19 million, closing the year with $294 million in cash. And with that I will turn the call over to Carlos.

Thank you, Dennis, and good afternoon. Now I will give you an overview of our outlook. The current economic conditions have certainly limited our visibility. It would be speculative at best for us to predict how long the crisis will last and how deep and severe it will be. In this call, we will provide revenue, operating margin and EPS guidance for the first quarter. Given that limited visibility, we will not provide guidance for fiscal year 2010. Instead, we will discuss how our business has been trending and other factors that will affect our financial results in the future. Consumer behavior in the fourth quarter for our retail business was generally consistent with the expectations that we shared with you last December. During the period, we successfully reduced our inventory position through a combination of initiatives that involved additional promotions at the store level, and purchase order cancellations. Every promotional activity was planned to protect the integrity of our brand and benefit our most loyal customers. As expected, as a result of the promotional activity our margins were negatively impacted through the end of January. We closed February with a comp decline in constant dollar basis in the mid-single digits, which translated into a high single-digit decline in US dollars. We believe that conditions will remain challenging, and have planned our first quarter business assuming a same store sales decline in the low to mid-teens range, and a decline in total retail revenues in the mid to high-single digits. This includes the impact of the stronger US dollar. With respect to our wholesale segment, our US backlog is down 26%. In Asia, we expect to see growth in both our Korea and China businesses, however, the relative weakness of the Korean won should more than offset any local currency growth. Based on this assumptions, for the first quarter we are planning the wholesale segment revenues to be down in the low to mid-teens range. In Europe, our backlog in euros is at 15%. We expect first-quarter revenues in euros to be roughly flat, impacted by the sales shift that occurred in the fourth quarter. In US dollars, we expect revenues will decline in the low to mid-teens range due to translation. And finally in our licensing business, we expect first-quarter revenues to trend in-line with our fourth-quarter performance, down in the teens range. So to summarize, our revenues assumptions for the first quarter are significantly impacted by the adverse currency comparisons and the shift in shipments in our European business. Absent these two factors, our expected fourth-quarter revenues will be roughly flat compared to last year. Instead, we expect a total revenue decline in the range of 9% to 13% for the company resulting in consolidated revenues between $425 million and $445 million. We expect first-quarter operating margin to be around 9% and diluted earnings per share between $0.26 and $0.30, which would represent an EPS decline of about 40% to 50%. This guidance includes the impact of the $0.04 shift in our European business, and $0.01 reduction due to a change in the accounting for certain participating shares. It also assumes no further repurchase of shares of the company's common stock. With respect to gross margin, we are currently operating with less inventory than a year ago companywide, in line with our lower revenue expectations. We have strengthened our supply chain, and reduced lead times in many categories by securing fabric ownership, and strategic vendor partnerships. We feel that we can respond quickly to market demand protecting our business without taking undue inventory risk. While we feel these efforts will go a long way towards protecting our margin structure, we do anticipate that our product margins will remain under pressure, and will be slightly lower than what we experienced last year in the first quarter. We also expect that occupancy costs will continue to impact our margins negatively. As to our expenses, at the onset of the crisis we took aggressive actions and have made significant changes to our cost structure. For fiscal year 2010, we are planning our business with a cost structure in US dollars that is approximately 5% lower than last year's. Next, I will address income taxes. We are planning fiscal year 2010 with a tax rate similar to fiscal 2009 of 33%. Regarding capital spending, in fiscal year 2010 we're planning to invest $70 million net of tenant allowances to fund new store development, remodels and international expansion. We will also fund projects that will serve us well in the future, including infrastructure, IT, and key sourcing projects that will support our globalization efforts. Now let me address currency for the year. As we have said in the past, one of the ways that currency impacts our profitability is through translation. The stronger US dollar has impacted our fourth-quarter result and will certainly impact fiscal year 2010 negatively if today's prevailing exchange rates continue. As a point of reference, if we converted last year's results with today's exchange rate, the negative impact on revenues will be approximately 7%, and the negative impact on earnings per share will be about $0.20 for the full fiscal year. Most of this impact for both revenue and earnings would affect the first three quarters of the year almost equally. In the fourth-quarter, currency comparisons become less adverse and assuming a relatively stable consumer environment, the negative comps should begin to subside at the end of the third quarter and should stabilize in the fourth quarter as we face easier comparisons relative to the prior year. All things considered, we do expect that the first-quarter earnings comparison will be the most challenging this year followed by the third and second quarters respectively. Any opportunity for quarterly earnings growth will likely be realized in the fourth quarter. With that, I close my prepared remarks and I would like to open the call to your questions. Operator?

Thanks. (Operator instructions) Your first question comes from the line of Jeff Klinefelter with Piper Jaffray. Please proceed. Jeff Klinefelter – Piper Jaffray: Okay. Thank you and congratulations everyone on a strong finish to the difficult year.

Thank you. Jeff Klinefelter – Piper Jaffray: It is hard to limit to one question, but just to clarify something before my fundamental question is really Carlos on your Q1 guidance for comps, and if you could give us sort of the cadence of comp flow, as we came through the fourth-quarter, and then started the first quarter again kind of by month, and just to clarify, did you say Q1 comps would be down in the low to mid-teens, and how much of that is currency?

Yes, currency has been affecting us in the last couple of months by about four points. So that as a general rule; you can use that for now because exchange rates have been impacted during the first quarter almost consistently throughout the month. With respect to the trends, we were very pleased with our fourth-quarter. We ended with 6.5% comp decline, but that was including currency. Before currency, the drop was about 2.8% or it was promotional. And really we have a commitment to run the business in a less promotional manner for sure, and we have planned our inventories accordingly. We were very pleased with February because we were already running with an adjusted inventory position, and in spite of that our comps were negative but not as severely negative as we were planning. So that considered, we think that the months of March and April are a little bit challenging in terms of the comparison, because we have different spring [ph] rates, we will have relative to last year, and then Easter shifts from March into April. So that is also impacting the comparison. We're trying to be conservative and we think that planning the business in the mid-teens range is the right way to approach it now, and hopefully we do better than that. Jeff Klinefelter – Piper Jaffray: Okay. So you are planning mid-teens. You have been trending a little bit better than that and you have to see what happens in March and April.

Exactly, the good thing is that really in February we were pleased not only with the top line, but even as importantly or more importantly with the margin performance of the business, where we saw that the duration on production margin was almost negligible, and in many areas we had better performance than a year ago, where we were running full steam, and we think that that is great because obviously, with the kind of promotional market that we saw in the fourth quarter, that was a big question mark, but because our inventories good and the product assortment I think is terrific, it is definitely helping the top line (inaudible). Jeff Klinefelter – Piper Jaffray: Okay. Just one other thing on Europe, with respect to your performance there being concentrated still in a few major markets with opportunities in some others, Paul could you talk a little bit more about the trends that you are seeing in Europe coming out of the fourth-quarter into the first. There are still a lot of concern about the economic pressures, and I know your business in Italy has been very consistent. Are you seeing any trends that encourage you in some of these other markets, how much opportunity is there to expand given the pressures globally right now, and any other color – pricing color that you can provide would be great?

That would be a third question? Jeff Klinefelter – Piper Jaffray: Yes, exactly.

So, basically if you look at the number of stores we plan to open for this current fiscal year, it would be 126 stores outside US, and again I will remind you that it varies [ph] of size because we do accessories, we do footwear, we do kids, we do Guess jeans. So 126 and in America we plan only 15 stores for this current year. After that, outside US you have 66 stores we will open as a jeans store, which include all accessories full range. And we will have 36 stores opening also outside he US, which is a very important number for us in view of the current situation, it is still a very strong number. But our original number last year for this year was much higher, and we scaled down dramatically. So, we think that also for Europe the current crisis and recession has really started to hit slowly more and more, but I think because we don't have these issues we have here from sub-prime and heavy debt, and heavy credit card debts like the we do have here, we're less impacted there. And we see some negative comp, but nothing to compare like in America. And in fact this evening, we will be on our way to Europe, my brother Maurice and I, as soon as we finish our conference call, and spend the whole week to visit some countries talk to managers and managing directors all over Europe. And see with our own eyes what is the situation, but we think that definitely, positively what is happening for us is we are very blessed to have this potential to open on many, many areas of Europe. We have different concepts and without any problems. So that will help us a lot. Jeff Klinefelter – Piper Jaffray: Okay.

Regarding the price point, we look also at adjusting somehow the certain premium, which we discussed on many conference calls that we think premium as you can see now, what we said six months ago that it would be affected and it affected in fact that the right price in our opinion for good denim fashion is between 100 and 135 (inaudible), and then you have a little window really to evolve, and of course end up. But that is the price where we are in Europe and (inaudible). Jeff Klinefelter – Piper Jaffray: Okay, great. Thank you.

Thank you.

Your next question comes from the line of Eric Beder with Brean Murray. Please proceed. Eric Beder – Brean Murray: Good afternoon.

Hi Eric.

Hi Eric. Eric Beder – Brean Murray: I'm going to break the rule here for one small question that was last asked in the guidance. What is the share account you're looking for next year with no share buybacks, and could you talk a little bit in terms of the US. I know you just talked about there in denim, what should we be looking for, what do you think are some of the key trends for spring here, in the full [ph] process for spring?

Okay, the share account for next year is 93.5 million that is the number where we are using. With respect to the second question Eric, I am sorry, if you can repeat that. Eric Beder – Brean Murray: Yes, could you tell us kind of what – what you are looking at in terms of what you think is going to work here for Spring, and for summer, in the next two quarters in terms of product?

As a product? Eric Beder – Brean Murray: Yes.

I can answer you that. I think our position is very strong right now, especially if you visit our stores. If you have a chance to visit our stores, any of one of them, you will see an extreme strong presence of denim, everything denim related from T-shirt to jeans, fashion basics and fashion, and we do believe that we have an unusual assortment on that according to any competition you look at. Then you look at the accessory section, and you will see that all really match all the denim world and casual, and we have, again we believe outstanding products in handbags, watches, footwear, and eyewear as well. So this is where we see our core assortment for the spring and summer. Eric Beder – Brean Murray: Great, thank you.

Thank you Eric.

Your next question comes from the line of Todd Slater with Lazard Capital Markets. Please proceed. Todd Slater – Lazard Capital Markets: Thanks very much and congrats on your results.

Thank you Todd. Todd Slater – Lazard Capital Markets: Can you give a sense of how many renewals and kick outs might be coming up over the next couple of years, and also are you planning comps for the balance of the year as well as how you are looking at your inventory procurement for the balance of the year. Thanks so much.

Yes, Todd. We have about 34 leases that are expiring this year, and about 17 that have kick out provisions in addition to that. So – and hence if you look into the following year, the number is 46 expiring and about 25 additional that have kick outs. With respect to your second question, you know, the way we are planning first quarter is pretty consistent with where we are looking into the next 2 quarters as it relates to inventory and revenue opportunities. The great thing is that I think that we have a very flexible supply chain right now, and because we have a position in fabrics, we can react. We have left a lot open. So, if in the past we would have committed in the main collection, the original line about 70% or 80% or even more in some cases. Now that number is lower, and we're filling in with a lot of immediate and what we call laid outs, meaning styles that have been added after the line is approved. This gives us an opportunity to do two things. One, to protect inventory risk from inventory risk, and also the second thing is that it gives us an opportunity to go after sales that are selling better or that address the market needs more appropriately. We believe that that is where we are going to continue to run the business at least into the third quarter, and then we see some opportunities in the fourth. Todd Slater – Lazard Capital Markets: Great. It sounds like a good position to be in. Best of luck.

Thank you Todd.

Your next question comes from the line of Christine Chen with Needham & Company. Please proceed. Christine Chen – Needham & Company: Thank you and congratulations on a good quarter in a very tough environment.

Thank you Christine.

Thank you. Christine Chen – Needham & Company: Just wanted to talk a little bit more about Europe, on the last call you gave us some details on how the larger countries were performing, and I was wondering if you could share that with us again, because I think everybody sounded really hopeful, and then the fact that you were able to move up orders, spring orders up into the fourth quarter suggests to me that demand for your product in Europe continues to be pretty robust. So wondering if you could comment on that? Thank you.

Yes, Christine. It is Carlos again. I – with respect to Europe, part of the change and the shift that we experienced into the fourth quarter was also something that we have been working our team there for quite a long time now to try to change the business model, and make deliveries more evenly throughout the year. So some of these are the results of those efforts, and we are very pleased with that. But you are right, people definitely wanted the product, and that is what is enabling us to accomplish that. With respect to the breakdown by country, Italy, as you know, represented, used to represent more than 50%, much more than 50% of our business in Europe and now for the full year, last year, it represented exactly 50%. The great thing is that Italy continues to grow and, of course, we saw a pretty significant growth in the fourth quarter and even our backlog is up 15% in euro. So that is a pretty healthy business. A lot of the growth is coming from other countries like France, even Spain we are experiencing growth. The UK grew for us in both at the wholesale level but also in retail. Germany was another country where we grew our top line. And we are seeing many opportunities in many areas like Paul mentioned during his remarks. So, we feel that, you know, we have said this in the past, yes, many of the economies there are challenged, but for us it is a big part of gaining market share, going into countries where our presence is very, very low, and that the brand is very well known. So, we see opportunities to continue to grow as we planned. That being said, we are being more cautious about the second half of the year because you know, we're definitely aware of what is happening globally, and these economies will probably get some impact as we are reading. And based on that, we think it is more appropriate for us to plan the business conservatively, and then feed in if we see more opportunity. Christine Chen – Needham & Company: Okay, and then in the US, your promotions have certainly been more targeted unlike most of the mall, which is just – I think it is deep discounting, have you found that that is more effective for conversions in this environment with the Guess list?

Well, you know, actually I think I mentioned, we tried to plan every promotion to really benefit our most loyal customers, and the fact that we implemented this loyalty program has been a great tool for us to be able to do that. We have planned to continue to do some of those 10 events, but we are being very careful with the margin. We don't like to be on sale like the rest of the mall [ph] is , and because the product has been very strong, I think we have been able to do that. Now that being said conversion, when you see that the customer is much more price sensitive than he was is a little more challenging. So conversion has been challenged from that standpoint. Christine Chen – Needham & Company: And with the conversion of Marciano to Guess by Marciano, do you intend to maybe merge those customer list or do you intend to keep them separate?

Yes, we plan to merge these two lists, exactly that. Christine Chen – Needham & Company: Okay, thank you so much and good luck and the stores looks fantastic.

Thank you very much.

Thank you.

Your next question comes from the line of Janet Kloppenburg with JJK Research. Please proceed. Janet Kloppenburg – JJK Research: Hello everyone, and congratulations.

Thank you Janet.

Thank you Janet. Janet Kloppenburg – JJK Research: A couple of questions, it sounds like the trends in Europe – I was wondering if you could talk about the trends in Europe at the tail end of the quarter, and I think you said now you are planning them to be flat or down low-to-mid teens on a currency adjusted basis, and I am wondering if that is how it looks at the end of the fourth quarter or again like in America, you are being somewhat cautious, which I appreciate. But I was wondering if there was some caution in that outlook, and I was also wondering if you could discuss how the comps at the Guess business look ex the Marciano business, which I think because of price points may be under a bit more pressure. Thanks so much.

Okay, sure Janet, with respect to the European question, there are a couple of things that are impacting the comparison. One that is big is the shift that took place between first quarter into fourth quarter last year. Obviously – I am sorry. Janet Kloppenburg – JJK Research: Okay, I understand now, go ahead.

Of course that is the impacting the revenue. In addition to that there is a major impact of currency here because of the strengthening of the US dollar this quarter versus a year ago. So those two things are pretty impactful and, even when our backlog, as you know, when we released third-quarter numbers, at that time we mentioned that our backlog was up 15%, and we continued to see that type of growth in Europe, but because of this shift obviously, which lost some of that growth. And that is impacting the first quarter. The second quarter we haven't talked about it, but obviously when you see a 15% growth that gives you a pretty good idea. We normally run with about six months in the backlog depending on the time of the year. That gives you a pretty good idea of how the business is trending into the second quarter as well. Janet Kloppenburg – JJK Research: Is there a shift comparison from last year in the second quarter Carlos?

Well, it is all about the fact that we have been trying to change – how the business – it is delivered throughout the month. So any changes to that are just relative to the business model that we have been able to effect, and last year we had a couple of those. We also see that there is a possibility that some of the third-quarter shipments for Europe could fall into the second quarter. So we don't know that for sure, but that is something that we are anticipating right now. Janet Kloppenburg – JJK Research: Okay, and on the Guess by Marciano?

Yes, you are absolutely right. Our Guess by Marciano business has been impacted probably the most because of the price sensitivity of the customers today. And so if you exclude them, the comps will be better. Janet Kloppenburg – JJK Research: Okay, and excluding currency Carlos, could you talk a little bit about the margin trends in the European as well as Asian markets, the current trends, the way you talked about them in the American markets? Thank you. North American market?

I'm not sure I understand your question. You are asking about currency and what impact that has on the margin? Janet Kloppenburg – JJK Research: No, if you could talk about the margin trends in Europe and Asia that you talked about in the US, yes.

Okay, yes. Janet Kloppenburg – JJK Research: Okay, I think you said margins in the United States were holding up pretty nicely because your inventories were tight. I wondered if you could talk about that in the international market.

In Europe, in the fourth quarter Janet they were – the product margins were basically flat. We were a little bit down in gross margin, but that is because we have been investing in retail. So, Europe has a higher component now of occupancy costs, but product margins are product margins very consistent Q4 to Q4 last year.

And I would add to that that the good thing is that inventory is in a pretty good position, and that is across the board. You know, this effort to reduce inventory levels by year-end was a worldwide effort, and it was effective everywhere, you know, including Europe and Asia. So we do not have any issues with inventory, however, when you look at Europe, the fact that the Euro is trading at where it is. Last year we had significant benefits in our margin structure because the euro was so strong relative to the dollar. So we're up against those numbers. We want to protect our market share, so is not that we are going to increase prices in this type of market. So we may see some impact and challenge at the margin level, and that being said, especially with respect to the first quarter the fact that we lost a lot of those shipments in the first quarter, and now we have been have a larger retail base meaning we have 61 stores. So, occupancy is going to play a role in the first quarter as well. So first quarter we could see some impact on margin, but it is all embedded in our guidance. Janet Kloppenburg – JJK Research: Okay, many thanks.

I am sorry, to add to that, we also have hedged. So we got a lot of our purchases into next year already on the contract? Janet Kloppenburg – JJK Research: Great. I wanted to say I'm glad that your G by Guess is doing so well. Thank you.

Thank you.

Thank you.

And your next question comes from the line of Chi Lee with Morgan Stanley. Please proceed. Chi Lee – Morgan Stanley: Hi, good afternoon guys. Carlos, quick clarification question, did you say that your expectations for SG&A in US dollars would be down 5% for all of fiscal year ’10?

Yes, I did say that and that is our goal. You know, of course, that assumes a certain level of performance and operating and we think that we can do that. We have a structure in place that kind of accomplished that for us. Chi Lee – Morgan Stanley: And so correct me if I'm wrong, that would imply that constant currency SG&A would actually be up year-over-year?

But, if you – I don't buy exactly what the difference is but, because you have to take into consideration how much expenses are in foreign denominated currencies, but that could be the case. Chi Lee – Morgan Stanley: Got it. And as you look at that – at those expenses, are there opportunities for you to pull back if business were to trend a little bit worse than your expectations?

Well, we always find a way to do that, Chi, and I think you can see that in the fourth quarter performance where we picked up over two points in expenses, and we had very short notice to be able to accomplish that. So we're pretty flexible, and we will do whatever we need to do to protect the profitability of the company, but I think we have done quite a bit on the fixed cost part of the structure, and then we're very careful with how we spend the variable part. So the answer is yes, we will continue to look at the cost structure. We have gone through before the global cost structure again including every region and the way where we expect to meet this kind of goal, the lower 5% is through a global effort in every single region has to work hard on this. Chi Lee – Morgan Stanley: Got it. And as you guys look at occupancy costs for fiscal year ‘10, can you talk about any possibility of seeing actual rent reductions through those lease renewal that you talked about earlier on the call?

Well, you have to keep in mind that those least renewals, they relate to leases that were signed about 10 years ago. So the fact that there is a renewal doesn't necessarily mean that in the current market conditions will be lower than what we are paying currently for those leases. I wouldn't take that money and expect that is going to reduce occupancy costs. Now, of course, we do believe that the current conditions are much more favorable than what we were seeing up to last year, where every time that we renew one of those leases, we were seeing a pretty significant increase from what we were paying. That should subside. Chi Lee – Morgan Stanley: Got it. And last question is Dennis, can you just quantify for us what the impact of the comp accrual reversal was in the fourth quarter?

It was about roughly $0.03 a share. Chi Lee – Morgan Stanley: Okay, thank you very much.

Thank you.

Thank you Chi.

Your next question comes from the line of Betty Chen with Wedbush Morgan. Please proceed. Betty Chen – Wedbush Morgan: Thank you. And congratulations everyone.

Thank you Betty. Betty Chen – Wedbush Morgan: I was wondering Carlos if you can give us a little bit more color by concept, I know, you have already talked about how G by Guess seems to be outperforming the other brands. Could you give us a little bit more color on how may be the comp trends in the division trended in the fourth quarter, and so far in February, and you know, looking forward that in North America store openings. Should we also anticipate more G by Guess store openings this year or how should that breakout by brand.

Yes, you know, like Paul said many times that – like Paul mentioned earlier, our plan is to really just fund those deals that have been committed. So we're not planning right now aggressive openings other than the ones that we have in the books. And there's a fair distribution of those by concept. Now, we have not opened many of those stores. We plan to continue to support the factory business because it has been very healthy. Some key locations for the full price Guess business in North America, both US and Canada. Accessories stores, we see that as a big opportunity and of course G by Guess, but we don't have significant growth plans for either one of those concepts. With respect to G by Guess and its performance, yes it has been very, very encouraging. We are very pleased with talking about double-digit comps in the fourth quarter, and that in that type of environment I think it was remarkable. You know, that performance was much better than any one of the other concepts, and the performance was also better in the month of February as well. Betty Chen – Wedbush Morgan: Carlos, is there any way you can talk a little bit about some of the possibility trends for G by Guess and if there are any sort of long-term targets you have for that brand?

I can tell you that last year G by Guess lost less money than the year before, which I think was a remarkable accomplishment. We have a plan to lose even less money this year. Betty Chen – Wedbush Morgan: And Dennis, I was wondering if you can also gives us a little bit more color around the inventory position. It was obviously very clean for the overall company coming out of the Q4 timeframe, and it sounds like obviously a lot of flexibility for the spring season. Is there any chance you can tell us kind of how the inventory broke out between wholesale versus retail and sort of how is that being planned going forward as well?

If I can give you some color just on the way we ended, more regionally the growth was pretty consistently we were – with most of the growth, modest as it was, was in Europe. I think the Asian inventories were down and North America was roughly flat fourth-quarter versus fourth-quarter. The growth was pretty consistent and was obviously geared or shifted more towards the parts of our business that – where we have seen the recent growth. Betty Chen – Wedbush Morgan: And I guess the last question I have if I may is, it certainly sounds like Asia continues to be an opportunity. You’ve mentioned that while South Korea is expected to grow, some of that benefit will be offset by the won weakness against the US dollar. Could you comment a little bit about what you are seeing in China and maybe the growth of expansion into the secondary city? Thank you.

Yes. This is Paul. We have barely started in China, and I'm sure that (inaudible), we have expanded in China. The biggest challenge we encounter there is the size of the country. Nothing to compare to it anything anywhere else. So we, in fact are going to have another two visits in the next three months in China to reassess the secondary city, as you know there are more than 100 cities. We'll have more when I think 5 million people or something to that extent. I mean, huge, huge numbers, and we cannot of course cover that ourselves. We have our own stores there in key regions. We have some franchisees that we believe that we are going to need to go to the next step, which will be to secure not a franchisee, (inaudible) but to go joint-venture with some key partner to address this massive market on a prudent manner. We don't – we are not experts in that market, and we want to make sure that we don't make any mistakes once we pass the large cities like Beijing and Shanghai, and of course Hong Kong and all that. So definitely that's a project of 3, 5, 7, 10 years, but no question about that these region will be not today, not tomorrow, after tomorrow would be a massive source of income if we develop carefully our brand and image and consumer demand on that country. It means that we are having to go slow here than anywhere else. Betty Chen – Wedbush Morgan: That sounds like – thank you very much and best of luck.

Thank you.

Thank you.

Your next question comes from the line of Holly Guthrie with Boenning & Scattergood. Please proceed. Holly Guthrie – Boenning & Scattergood: Thank you and then you have my congratulations.

Thank you Holly. Holly Guthrie – Boenning & Scattergood: I just have a follow-up question on the SG&A, the 5% reduction, does that include also any assumptions for lower fuel costs or any sort of improvement in sourcing as well as cost reductions at the different headquarters?

Yes, Holly, this is Carlos. Anything that deals with sourcing for us is part of our cost of goods sold. So all that, you know, anything that we can do in terms of sourcing would impact our gross margin, and the same thing is true for trade. You know, if it is in inbound trade it goes into cost of goods, and if it is outbound, we reclass it into the cost of goods sold, when we close every month. That being said, you know, I think that we are very pleased with the progress that we are making in supply chain, because we believe that we will be able to protect our margin structures through IMU [ph], even when we have been, you know, careful with price points. Holly Guthrie – Boenning & Scattergood: Okay, great. Thank you. And then just one question with pricing in the stores, has there – you know, do you think there are any opportunities to enhance customer demand, given you know, the G by Guess, which is at a little bit lower price point seems to be doing better than the average, and there is so much talk about just prices coming down and consumers being strapped and being enticed a little bit lower opening price point. Do you think there is any opportunities there to pick up some comp points and just source it, given you know, with the knowledge that you will price it $10 below or something.

It's a great question. You know, really our merchants have been working diligently on this, and you know, trying to really sharpen price points where we thought that there was a need concerning the market demands, and this impacts both the full price Guess stores, and you're going to see in the stores that there are a lot of prices that are sharper within categories. Now we feel that there are many categories because we are so unique. There is no need for that type of change. It also impacts our Guess by Marciano business right now, and you know, in some cases it is not necessary to change prices overall, but to develop more into the lower price points within a product category and we are doing that. Holly Guthrie – Boenning & Scattergood: Great, thank you and good luck.

Thank you.

Thank you.

At this time there are no further questions. I would now turn the call back to management for final remark.

Okay, thank you very much. Thank you for all the questions. We do appreciate, and I hope we did answer you as much as we could, and to give you as much visibility that we could, except we have a little visibility right now, but we hope to continue to deliver some strong results for this current year, and especially in view of the markets as they are around the world, and we would talk to you in three months from now. Thank you very much and thank you again.

This concludes today's conference ladies and gentlemen. Thank you for participating. You may now all disconnect. Enjoy your day.