Paul Marciano - Chief Executive Officer Michael Relich - Chief Operating Officer Sandeep Reddy - Chief Financial Officer

Punal Bhavsar - Wunderlich Securities Eric Johnson - Piper Jaffray Randy Konik - Jefferies Krista Zuber - Cowen and Company Betty Chen - Mizuho Securities Dorothy Lakner - Topeka Capital Jeff Van Sinderen - B. Riley Janet Kloppenburg - JJK Research

Good day, everyone. And welcome to the Guess? First Quarter Fiscal 2016 Earnings Conference Call. On the call are Paul Marciano, Chief Executive Officer; Michael Relich, Chief Operating Officer; and Sandeep Reddy, Chief Financial Officer. During today's call, the company will be making forward-looking statements, including comments regarding future plans and financial 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. Please note, that this conference is being recorded. Now I would like to turn the call over to Mr. Paul Marciano. Paul, you may begin.

Thank you. Good afternoon and thank you for joining us today. We are pleased to report that our first quarter earnings per share were $0.04, which was above the high-end of our guidance. Earnings and operating margin were above the guidance we gave three months ago. We also expanded operating margin versus last year which is one of my key priorities. Before I update you on a progress of our strategic initiative, let me talk about our business. In our North America Retail business the early part of the quarter was impacted by the disruption of the West Coast port issue and extreme weather in all East Coast in Canada. Despite these two headwinds, we did not see a deterioration of trend compared to the first quarter and finished the quarter with comps down 4% in constant currency and down 6% in U.S. dollar. E-comm, which is one of our top priority had another strong quarter and delivered topline growth of 14% in the quarter, marking the 15 consecutive quarter of growth. In term of products, we were pleased with the performance of our Marciano product. We finished the quarter with comps up in the mid single-digit despite the daily disruption to products flow from the West port delay. We were also pleased by the overall performance of our women business as trend improved in the first quarter, driven by dresses, denim and woven top. Going in Q2, we are seeing the continuation of the first quarter trend in our women’s business. We believe that the design changes we have made are really starting to results. On the accessory side, we saw footwear continued to come positively, but we did see a slowdown in bag again as a port disrupted our deliveries. Our weather, as a new product we just sold where single return to positive comp trend for handbags again. Europe, our retail stores performed well and delivered positive comp in the lower single-digit during the quarter. Our product line is clearly resonating with our customers as we were able to deliver these results despite soft traffic. We are also encouraged by the trends so far in Q2 with comp in the middle-single digits. I have just returned from Spain, Portugal and Italy last week and was very pleased with what I saw during my trip with the product, the street and mall activity, but also the need of more products in the stores due to sell-through. However, Europe continued to be the bigger source of our foreign exchange headwind with the steep decline in value of the euro against the U.S. dollar and the Swiss Francs and that is beyond our control. Moving to our guidance for the fiscal year, we are pleased to be able to raise both the low end and top end of our guidance for the year based on our first quarter performance. We will provide detail on this later during the call. We are encouraged by the overall performance of our business so far this year and believe that it reflects the progress we have made on our four strategic initiatives outlined in last call. First, omni-channel, as we had said, we expect double-digit growth for the year in ecommerce and we are on track to achieve that in North America and Europe. Second, integration of Marciano and Guess? stores. The process here is ongoing and we are on track to double the number of sales that Guess? and Marciano represent by the end of fiscal year. The integration enabled us to expand the distribution of Marciano line and provide an upgrade the natural extension of the product offering within our Guess? stores. Third, the store realignment, we remained on track our projection to close underperforming stores. We planned to close up to 60 stores in North America this year and have already closed 11 of these in the first quarter. Finally, improve profitability of the company. This continued to be a key priority of mine, as well as the management team. Sandeep will provide more detail on the first quarter financial performance later, but excluding the impact of currency we already have made progress in Q1, where we were able to deliver operating margin level above our initial expectation above last year. In conclusion, I am encouraged by the performance of our business so far this year. I strongly believe this is a result of the product change we have made in the last few months, as well as a clear focus by management team to execute our strategy. I am confident these are the right step to increase the long-term of our brand and we would discuss more on the Q&A. Thank you. With that, I will pass to Sandeep to discuss the financial.

Thank you, Paul, and good afternoon. During this conference call, our comments may reference certain non-GAAP measures. Please refer to today’s earnings release for GAAP reconciliations or descriptions of such measures. Moving onto the results, net earnings for the first quarter was $3 million and diluted earnings per share was $0.04, compared to diluted loss per share of $0.03 in last year's first quarter. The impact of currency on our earnings per share in the first quarter was less than a penny. First quarter revenues was $479 million, 8% lower than the prior year and relatively flat in constant currency. Total company gross margin increased 90 basis points to 34.6%, due to less markdowns and higher IMU in North America retail, partially offset by effects of negative comparable store sales and currency headwind. SG&A, as a percentage of sales improved by 40 basis points versus prior year, mainly driven by a favorable segment mix. SG&A was slightly lower than expectations due to timing with the later part of the year. Operating earnings for the first quarter was $4 million. Our operating margin increased 130 basis points to 0.9%. Foreign currency negatively impacted operating margins by 40 basis points. Other net income was $3 million, and mostly consisted of net unrealized gains and realized gains on other assets. Our effective first quarter tax rate was 41.5% and up from 32% in the prior year’s first quarter due to the mix of earnings distributions between different taxable jurisdictions. Moving to segment performance. In North America Retail, first quarter revenues dropped 6% to $214 million, including the unfavorable impact of the weaker Canadian dollar compared to the first quarter of last year. Negative comps in brick-and-mortar stores were partially offset by 14% growth in our e-commerce business. Overall, comp store sales including e-commerce declined 6% in the U.S. and Canada and 4% in constant currency. E-commerce sales improved overall comps by two percentage points. Operating loss improved by $1 million to a loss of $7 million and operating margin improved 30 basis points to negative 3.4%. Compared to last year's quarter, gross margins were higher primarily due to less markdowns, higher IMU and lower occupancy costs, partially offset by negative comparable store sales and currency headwind. The gross margin expansion was partially offset by a higher SG&A rate due to negative comparable store sales. During the quarter, we closed 11 stores ending the period with 470 stores. In Europe, first quarter revenues were $137 million, down 14% in U.S. dollars and up 8% in constant currency. The constant currency revenue increase was driven by shift of wholesale shipments from the fourth quarter of last year as well as productively improvement in our retail stores. Operating loss improved by $3 million to a loss of $4 million, including the favorable foreign currency translation impact. Operating margin increased by 150 basis points to negative 2.7%. The increase in operating margin was primarily driven by the shift of wholesale shipments into the first quarter. In Asia, revenues in the first quarter declined 9% to $64 million and declined 6% in constant currency mainly driven by negative comps. Operating earnings increased 38% to $5 million and operating margin increased 240 basis points to 7.2%. The increase in operating margin was primarily driven by lower SG&A expense, due to the phasing out of the G by GUESS business in Korea. In North America Wholesale, which includes our businesses in the U.S. and Canada as well as in Mexico Brazil, first quarter revenues were down 5% compared to the prior year at $37 million and up 1% in constant currency, driven by a shift in the timing of shipments. Operating profit decreased by 13% to $7 million and operating margin decreased 160 basis points to 18.1%, primarily due to the unfavorable impacts of business mix and currency on gross margin. Royalties generated from sales by our licensee partners were up 1% at $26 million. Now, moving on to the balance sheet, accounts receivable in U.S. dollars was 10% lower than last year at $196 million and was impacted by the strengthening of the U.S. dollar compared to the euro. In constant currency, accounts receivable was up 5%, driven by the shift in timing of European wholesale shipments. Inventories were down 12% versus last year at $327 million. In constant currency, inventory was down 2%. We ended the quarter with cash and short-term investments of $459 million compared to last year’s $478 million. Free cash flow the first quarter was a use of $2 million, compared to a use of $17 million in the prior year first quarter, driven by changes in working capital, higher earnings and lower capital expenditures compared to the same quarter last year. In summary, excluding the impact of currency, we have a quarter where we were able to improve our gross margins, SG&A rate and operating margin on the P&L while improving our free cash flow. As Paul mentioned earlier in his remarks, this reflects a key priority for the management team, which is improving profitability. We are pleased with our start to the year and will continue to maintain the focus on all these metrics through the year. Additionally, our Board of Directors has approved a quarter cash dividend of $0.225 per share on the company's common stock. The dividend will be payable on July 3, 2015 to shareholders of record at the close of business on June 17, 2015. With that, I will pass the call over to Mike who will take you through the outlook for the second quarter and full fiscal year 2016.

Thank you, Sandeep and good afternoon. As discussed on our previous call, we expect currencies to be a significant headwind for fiscal year 2016. Excluding the impact of currency, we expect a topline that is roughly flat. We plan to manage our inventory tightly, leverage reductions and input costs and execute targeted price adjustments where appropriate in order to offset some of the foreign exchange headwinds on gross margin. Excluding currency impacts, the top-end of our guidance reflects over 30% EPS growth and operating margin expansion of over 200 basis points. As a reminder, currencies impact the results in two ways. First is the translation of our foreign entity’s results. Second, the impact on transactions denominated in the currency other than the local ones, for example, the inventory purchases made by Europe in U.S. dollars. Our outlook for fiscal 2016 assumes currencies will be a headwind on sales growth, gross margin, operating margin and EPS. We estimate that the currency headwinds will really start to build in the second quarter and impact full year EPS by roughly $0.45. Over 80% of that amount is being driven by impact on the transactional side. In order to give better visibility to the underlying trends in our outlook, we will also provide constant currency metrics when applicable. In North America Retail, we are focusing on optimizing our retail store portfolio and executing on our omni-channel strategy. We will stay very opportunistic with our store openings and plan to open roughly 10 stores in the U.S. and Canada during the year, primarily in the factory concept. We plan to close approximately 60 underperforming stores in the U.S. and Canada through lease expirations and kick-outs. As a reminder, roughly half of our leases have lease exit options coming up over the next three years. So far in the second quarter, comp store sales have been down in the low-single digits in constant currency and we expect comp sales for the full quarter to range from a decline low-single digits to an increase in the low-single digits in constant currency. Revenues in constant currency are expected to be down in low-single digits to flat in the second quarter. In U.S. dollars, we expect second quarter comp sales to be down in the low-single digits and for revenues to be down in the mid- to low-single digits. Looking forward, we believe that the improvement in our product offerings will positively impact trends in the back half of the year. For the full year in constant currency, we plan for the comps to range from down in the low-single digits to up in the low-single digits and for revenues to be down in the low-single digits to flat. For the full year in U.S. dollars, we are projecting comps and revenues to be down in the low-single digits. So far in the second quarter, retail comps in Europe are up in the mid-single digits. For the full quarter, we are planning for comps to be up in the low- to mid-single digits as some holidays in Europe have occurred earlier in the quarter compared to last year. For the full year, we expect comp sales to increase in the low-single digits. In Europe Wholesale, our fall/winter order book is down 10% versus prior year mainly driven by softness in Russia and Eastern Europe combined with the decline in France, a key wholesale market for us. Our expectations for the back half of the year do not include any material improvement in our wholesale business in Europe. Considering these factors as well as some timing in wholesale shipments, we expect Europe revenues for the second quarter to decrease in the low-single digits in constant currency and to decline in the low-20s in U.S. dollars. For the full year we expect revenues to increase in the low-single digits in constant currency and to decline in low-teens in U.S. dollars. At prevailing exchange rate, we estimate that the impact of currency headwinds on Europe revenue growth will be approximately 19 percentage points for the second quarter and 16 percentage points for the year. Now turning to Asia. The overall environment remains soft in South Korea where comps have been negative so far in the second quarter and we are assuming the environment will remain soft in our guidance. For the second quarter, we expect Asia revenues to decline in the low-single digits in constant currency and to decline in the mid- to high-single digits in U.S. dollars. For the full year, we expect Asia revenues to decline in the low- to mid-single digits in constant currency and to decline in the mid-single digits in U.S. dollars. In our North America Wholesale business, we expect second quarter revenues to be down in the mid-teens in constant currency and down in the low-20s in U.S. dollars. For the full year, we make some recent trends on U.S. wholesale business. We are now planning for revenues to be down in the mid- to high-single digits in constant currency and to be down in the low-double digits in U.S. dollars. In our licensing business, we are expecting royalties to decline in the low-single digits for the second quarter and the full year. For the second quarter, we expect overall gross margins to be down slightly as we start getting more severely impacted by currency headwinds relative to the first quarter. For the full year, we now expect gross margins to be up slightly due to lower planned markdowns, targeted price increases, and lower average unit costs, partially offset by the currency headwind. With respect to operating expenses, we expect a higher SG&A rate for the second quarter, partially due to timing of expenses. For the full year, we expect the SG&A rate to be slightly down to slightly up. We are planning the full year with a 34% tax rate and our guidance assumes foreign currencies remain roughly at prevailing rates. Considering all these factors, for the second quarter of fiscal 2016, we expect consolidated revenues to decline between 3.5% and 1.5% in constant currency. At prevailing exchange rates we estimate that the impact of currency headwinds on consolidated revenue growth will be approximately 9.5 percentage points for the second quarter. We are planning an operating margin between 3% and 4%, including the impact of currency headwinds of roughly 170 basis points. Earnings per share is planned in the range of $0.12 per share to $0.16 per share. The negative impact of currency on earnings per share in the quarter is estimated at $0.12. Excluding the negative impact of currency, operating margins and earnings per share are projected to be up versus prior year for the quarter at the high end of guidance. For the full year we expect consolidated revenues to be down 1.5% to up 0.5% in constant currency. At prevailing exchange rates, we estimate that the impact of currency headwinds on consolidated revenue growth will be approximately 7 percentage points for the full year. We are planning an operating margin between 5% and 6%, including the impact of currency headwind of roughly 130 basis points. Earnings per share is planned in the range of $0.86 per share and $1.02 per share. The earnings per share guidance includes a currency headwind of roughly $0.45 per share. For the full year, we plan to manage our CapEx carefully and opportunistically by investing between $55 million and $65 million in capital expenditures, net of tenant allowances. With that, I will conclude the company's remarks and open the call up for your questions.

[Operator Instructions] And now our first question is going to come from Eric Beder from Wunderlich Securities. Please go ahead.

This is actually Punal calling for Eric Beder. My first question actually regards to the Gumball 3000 partnership. Is it working and is it flowing with your marketing plan?

Yes, this is Paul. That event just finished last two days ago. So it’s our first time and it was a good event all over Europe. We just came last weekend in Los Angeles and Las Vegas, but unfortunately I was not able to attend for family reasons. But we don’t know yet about the impact.

Okay. Great. Also my second question, could you provide any color on the changes the economy in Italy?

In Italy, we see -- I have just come back from Italy last week and I have to tell you that I was quite pleased about what I see right now. In fact, across the country in Italy our stores have been positive and the last 2.5 years were not exactly easy for us in Italy. Now I am very encouraged by what I see.

Thank you. Our next question is going to come from Erinn Murphy from Piper Jaffray. Please go ahead.

Hi, this is Eric Johnson for Erinn. Thanks for taking my question. I just had a -- I was wondering what was specifically driving the women’s improvement denim. Is that any type of fashion you have going on? Or are you seeing broad-based traffic increase toward it or conversion or anything you can say that would help us out?

Well, looking at denim, we have to really bucket it into two buckets. Our basics are still remaining a little bit soft, but we have been putting a lot of investment in our fashion or our premium denim. So we have some new fits and new fabric technologies. One of them it’s like denim which is a very soft like pajama type fabric, it’s very comfortable. We’ve seen really great sell-throughs on that. We also have a new fit called the Curve X which is very technical fabric and these are at the higher price points $128 to $138, $148 and we’re seeing a really, really good response from our customers.

Thank you. Our next question is going to come from Randy Konik from Jefferies. Please go ahead.

Yeah. Great. Thanks a lot. I guess my question is, first on the comps driver or are you seeing improved conversion in the business? And then as you related to product trends, on the product trends that you’re seeing domestically the same type of product trends you’re seeing in Europe and Asia in terms of trends -- in terms of trending product? And I guess, lastly, how should you -- are you thinking about like that we finally reached a point in a cycle where you got more visibility in the business and you reached highly margin trough in the business, just wondering your thoughts there? Thank you.

Well, looking at the comps driver, in Q4, from Q4 to Q1. In Q1 we were able to -- the trends were very much the same, but we were impacted by the increment weather and the port delays. So but even despite those headwinds, we’re able to actually still maintain at same constant currency. And one of the big drivers there was that AUR improved from Q4 into Q1 and also year-over-year. And looking into Q2, we see that basically traffic and conversion, we see sequential improvement. Now as talking about the product and the relative performance in the region, I’ll turn it over to Sandeep.

Yeah. Randy, this is Sandeep. And just to follow-up of what Mike was talking about and what was happening in North America. In Europe also in Q1 traffic was a definite headwind for us. The great news for us though was AURs were up pretty significantly and also our conversions improved. And between those two factors we were more than able to offset the traffic headwind that we saw and we were up in the low-single digits and up in almost all the markets expect a couple. And so what we had saw was the only market that decline were Europe which was down -- it was France, which was down in the mid-single digits and Italy was just down in the low-single digits, but Italy having a stack comps, because of very difficult comparison last year which is still positive. So we are pleased with what we see in Europe so far on retail. And I think moving onto your next question on operating margins. I think what you’ve seen so far in the first quarter is a result of all the initiatives we try to talking about since the back half of last year, the tighten up on our inventories, manage our product launches very closely, tighten our operating expenses and that’s why you’ve seen an operating margin expansion in the first quarter and from a free cash flow perspective this is really a good quarter for us. We’ve actually improved over last year by $15 million. So as we go forward, just remember exchange is going to be a headwind and that going to affect our operating margins. We’ve called this out in our guidance and we’ll talk more about it later.

Thank you. Our next question is going to come from John Kernan from Cowen and Company. Please go ahead.

Good evening. This is Krista Zuber for John Kernan. First, could you provide us some visibility into the pace of store closings for the balance of fiscal ‘16 and kind of insight into what concept will be affected? Thank you.

All right. This is Sandeep again. So for the fiscal ‘16 we’ve announced that we’re going to be closing within 50 and 60 stores this year. And the store closure is really are more heavily backend loaded. And so what we did see also in our previous calls was it really goes across all the different concepts and the criteria that we using is whether stores are unprofitable or no longer by the appropriate locations, we think...

Extension.

Yeah. Exactly. So I think that -- those are the drivers of how we decide to what stores to close and that’s what’s -- that’s a visibility we have so far this year.

Thank you. Our next question is coming from Betty Chen from Mizuho Securities. Please go ahead.

Thank you. Good afternoon. Congrats on the nice progress in the first quarter. I was wondering just to follow-up on that question regarding the store closures? Can you remind us whether is the productivity difference between the closures versus the rest of the chain and whether you’ve been able to sort of project what is the margin list that we could see at the end of the program and then I had another question as well.

Hi, Betty. This is Sandeep.

Hi, Sandeep.

How are you doing?

Good. How are you?

Yeah. So I think when, from a profitability perspective of the unproductive those relative to the other ones. I think what we are looking at is taking the total flexibility in our portfolio because we have almost half of those coming up over the next two years. And what we did see was look in the next one year about 50 to 60 stores are coming up with a productivity of those stores when we meeting our financial requirements and we will be exiting those stores. Closing these stores will be margin accretive, but remember that these stores are been closed more towards the backend of this year. So the impact of this year is quite limited but it’s already bin our guidance. The more of the impact will come in the coming fiscal year but we’re not ready to give guidance for next year.

Okay. Okay. That’s helpful. And then my other question if I could is regarding the timing of investment. It sounds like maybe some items or projects moved out of the first quarter into the balance of the year. Is that somewhat included in the second quarter guidance with the SG&A rate up year-over-year or should we expect that more in the back half and if you can just remind us what those investments are please?

Yeah. Betty, if I’m not mistaken, you’re referring to our expense timing in what your question refers to. So what we are seeing is there was some timing benefit in Q1. Some of that’s going to impact us in Q2 and that’s reflected in our guidance. But the way I would really think about SG&A is across the full year and across the full year, we are roughly flatten from an SG&A perspective on a rate perspective.

Thank you. Our next question is going to come from Dorothy Lakner from Topeka Capital. Please go ahead.

Thanks and good afternoon, everyone. A couple of questions. One, the impact from the port delays, is that -- are we kind of through that at this point, or is there any residual impact that you’ll see in the second quarter? And then just in terms of trends, what you’re seeing in terms of dress trends? I mean it’s been a pretty long dress cycle so and I know you’ve been quite successful with that and with some of the lower price points. So wonder what’s going on there. Knit tops, you spoke about success in the wovens business, but are you seeing any resonance on the knit top side? And then the handbags seem like they are improving but then pulled back, I just wondered what’s going on there? And then lastly on AUC, what we should expect in terms of direction of AUC over the next couple of quarters? Thanks so much.

Hi. Dorothy, this is Mike, so definitely is a long question. Anyway, looking at the impact of the port delays, we actually were impacted in Q1. In Q2, the impact has subsided. It’s not across the board. It was on various, on several categories. One was handbags. We were comping positive in Q4 in handbags. We were negative in Q1 due to product flow issues. We are now back to positive in Q2 as the product begins to flow. MARCIANO was another category. We buy very, very lean there and the port delays did impact that product. We are still comp positive in the mid-single digits of the product category but now we’ve returned to the high-single digits, now that that’s product is flowing. So now moving onto the trends on dresses. Dresses, we continue to do well. Actually, we do better in MARCIANO on the higher price points. So, we’ve taken and we’ve doubled the number of stores that MARCIANO Denim, primarily is the category of dresses and our merchandise dress is good-better-best. MARCIANO is still the best part of that strategy. And the GUESS dresses ends at $148, MARCIANO starts at $148. So, we’re seeing positive comps there. And customers, when the products rise, they definitely respond to it. And so next part of your questions with respect to knit, so knit is the category both in men’s and women’s, which is actually trending positively. We are moving into a knit cycle and moving into Q2 actually. We saw improvements from Q4 into Q1. And into Q2, we are actually comping positive in knits. So that’s a good story. Handbags, we did discussed...

If I can add on that, this is Paul. So, in particular where we didn’t discuss is the footwear. Footwear for women has been picking up across the world in every region. And watch has remained soft in general for the last few quarters now. So, we are seeing still some -- we are looking for some stability in watches but it’s still kind of soft.

And handbag is something that we are doing -- we are doing well and now that the port headwinds are gone, there is a number of categories and our focused lines doing very, very well and selling to the piece. Our dealing intends to be strong. So we are doing well above those categories. Last is AUCs. We see cotton price decreases so the input costs are actually lower AUCs in the back half of the year. So thank you.

Thank you. Our next question comes from Jeff Van Sinderen from B. Riley. Please go ahead.

Good afternoon. You called out the women’s business is improving. I’m just wondering if you can talk a little bit more about what you are seeing in the men’s business. And then also I think you said not sure if you actually said North American comp or traffic was down, but I’m assuming traffic was down. Were transactions in North America up or they still down?

Okay. So men’s actually has softened. We saw basically the acceleration from Q4 into Q1. And I think we had some missteps there. Back in last fall we were little bit casual, then we swung probably a little bit to addressee and a little bit more towards woven. We’ve seen this working. We’re chasing into it and that’s casual that’s going okay. But overall, we are working right now to balance the entire assortments to be even going into summer. So we feel good about the direction that we’re going. Now in North America, yes, traffic was a headwind. With the headwind definitely it’s a Q4 and those caused by weather and the port strike. We see a sequential improvement into Q2, but it’s still a headwind. But the driver of comps there was our averaging at retail actually was higher in constant currency both in Q1 and Q2.

Thank you. Our next question is going to come from Janet Kloppenburg from JJK Research. Please go ahead.

Hi, everybody. I was wondering if you could talk a little bit about the performance in the outlet business and the trend that you are seeing there. I was also wondering if you could talk about the denim inventories for women. Mike, are they balanced? Do you have the fashion assortments that you need the investment there? I’m sorry, yes, I think it’s the fashion that’s working. And how should we think about AUR trends for the back half in light of you owning or investing more in the higher AUR denim? And I think that’s probably enough. Okay. Thank you.

Okay. Thanks, Janet. It’s Mike. The outlet business basically is really performing kind of inline with the chain in general. Now, we are facing some headwind with tours traffic. Right now, if we look in the Q1, basically the gap between our tour stores, our non-tour stores, the gap is increasing. So we’re definitely seeing headwinds from the strong dollar there. But even despite that, factory still is performing basically the same as the chain in general which we’re pleased with. And in terms of denim inventory, we’ve done a really good job managing our inventory and I think we have the right balance between fashion and basics. So inventory levels are inline and going into back-to-school, we are actually making a denim statement. And like I said earlier in the call, we’ll be some introducing new cuts and some new fashion styles. And we feel pretty good that we will have the right mix in terms of the basics and versus fashion.

Thank you. And that concludes the question-and-answer session. We have no additional questions at this time. And thank you, ladies and gentlemen. This concludes today’s conference. Thank you for participating. You may now disconnect.