Rachel Schacter - ICR, IR Efraim Grinberg - Chairman and CEO Ricardo Quintero - President Sallie DeMarsilis - Chief Financial Officer Rick Coté - Vice Chairman and COO

Oliver Chen - Cowen and Company Eddie Yruma - KeyBanc Capital Markets Kristine Koerber - Barrington Research Associates Rick Patel - Stephens Incorporated Jeremy Hamblin - Dougherty & Company

Please standby, we are about to begin. Good day, everyone. And welcome to the Movado Group Fiscal Third Quarter 2016 Earnings Conference Call. Today’s call is being recorded and may not be reproduced in whole or in part without permission from the company. At this time, I would like to turn the call over to Rachel Schacter of ICR. Please go ahead.

Thank you. Good morning, everyone. With me on the call is Efraim Grinberg, Chairman and Chief Executive Officer; Ricardo Quintero, President; and Sallie DeMarsilis, Chief Financial Officer. Also in the room is, Rick Coté, Vice Chairman and Chief Operating Officer who will join us for questions-and-answers. Before we get started, I would like to remind you the company's Safe Harbor language, which I'm sure you're all familiar with. The statements contained in this conference call which are not historical facts may be deemed to constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Actual future results may differ materially from those suggested in such statements due to a number of risks and uncertainties, all of which are described in the company's filings with the SEC, which include today's press release. If any non-GAAP financial measures used on this call a presentation of the most directly comparable GAAP financial measure to this non-GAAP financial measure will be provided as supplemental financial information in our press release. Now I would like to turn the call over to Ricardo Quintero, President of Movado Group.

Thank you, Rachel. Good morning. And welcome to our Q3 conference call for Movado Group. We are pleased with our Q3 results, as it continued reflects strong execution of our strategic approach to growing our business and capturing the full potential of our brand portfolio, despite a challenging global environment. Sales for the quarter were up 2.1% on a constant currency basis and down 1.6% on a reported basis, with international sales increasing 5.7% on a constant currency basis and decreasing 2.8% on a reported basis. Operating income was also up 9.9% on a constant currency basis or 0.4% on a reported basis. As a recurring theme for this year, during the third quarter, global market has continued to present challenges, giving us who many referred to as a VUCA environment that is one filled with volatility, uncertainty, complexity and ambiguity. At Movado Group, we have taken a proactive approach to navigate in this environment, taking actions that positively impact the short-term, while at the same time leveraging our strength for sustainable profitable growth in an industry that still has growth potential. As discussed on our previous calls, foreign exchange and currency volatility is one of the big central themes affecting our business. But one of the proactive measures we took earlier in the year was a rollout of selective price increases, which we executed successfully. We have also been strategic in managing the other levers of gross margins, focusing growth on a more profitable mix of product, channel and sourcing improvements. To note, in the third quarter, our gross margin expanded to 53.9% of net sales, despite 140 basis points overall unfavorable currency impact on gross margins. One of our key strategic themes since then to put the consumer first in everything we do. By leveraging our powerful brand portfolio and create an innovative beautiful product with the right value proposition we have seen strong sell-through in some of our key markets as we continue to build market share. In Q3, we were particularly pleased with Europe, our largest international region. On a constant currency basis, our sales were up strong double digits, with the strongest growth coming from Germany, the U.K. and France. These positive results are partially driven by increases in traveling consumers, particularly Chinese, who are known to shift travel destinations in pursuit of attractive value from currency fluctuations. Although, our business in the Middle East continues to be impacted by the price of oil and regional issues, we continue to see positive results across our entire brand portfolio. Conversely, our shipment performance in Asia and Latin America were down impacted by a number of well-documented several factors in Q3, including shifts in currency and tourism travel patterns. Our shipment in the U.S. declined 0.6% in Q3 versus last year. Although, Movado was basically flat at 0.3% and our licensed brand were up 3.7%, the Wholesale number which declined 1.2% is affected by the absence of ESQ sales in the current period as compared to this period last year, as the brand was being phased out. Excluding the ESQ impact, Wholesale in the U.S. would have been up 0.7%. From a Retail perspective, our Movado company stores in the U.S. grew 2.8% in Q3. We are well-positioned in Q4, with compelling product assortments and attractive value propositions, while protecting our profitability metrics. Consistent with what we’ve seen throughout the year, our sell-through trends continue to outpace the market for most of our brands led by our Movado brand. In the U.S. where we were able to effectively track market share through NPD, in the $300 to $3,000 price category where we compete, our Movado brand market share rose to over 21.8% for the latest three-month period available of July through September, up 230 basis points versus prior year. In the same July through September period, Movado sales of Retail grew 5% on the market that declined 6%. Sell-through results in the U.S. for licensed brands were challenged by a difficult October for Retail in our main channels of distribution, but still at or ahead of market trends for all of our brands. In international markets our licensed brands were experiencing strong sell-through, with particular strength in the U.K., Germany, France, Brazil, Mexico and signs of recovery in Spain. As discussed in previous calls, sell-through continues to outpace sell-in globally, as retailer’s further rebounds their inventory and many are forced to apply more rigorous rico metrics. We expect this trend to continue in Q4. We're particularly excited about our innovation pipeline for our flagship Movado brand, where we have recently introduced two major new product introductions. First, we launched Movado Edge, an exciting new collection that is a modern, fresh interpretation of our Museum brand, raising it to the pinnacle of today’s design aesthetics. Movado Edge was design in collaboration with one of the worlds most inspiring and respected industrial designers, Yves Behar. He joined us to introduce this collection at Vanity Fair New Establishment Summit in San Francisco this past October. We are very pleased with the positive response from participants and reviews from the press have been outstanding. We only began shipping Movado Edge in the second half of October and the initial sell-through results indicate that consumers feel the same way we do. Some of our marketing efforts have initiated and it will be more [Technical Difficulty] including print and TV in the U.S. during the holiday season. Our second big innovation story relate to connected technology, where we have announced two important collaborations in creating two different collections in the Movado brand. Our approach has been to create beautiful timepieces first and foremost, while also providing new desired connected features such as subcount, notifications and sleep monitoring. We have learnt from the consumers through quantitative and qualitative research. And we know that our new introductions are well aligned around the consumers’ preferences. Simply intelligent, our Movado Motion collection merges Swiss made elegance into wearable technology segment for men and women. On sale on Movado.com since November 16 and now starting to appear in select retailers across the U.S. Powered by MotionX innovative technology platform, Movado Motion features two striking Swiss made design, Museum Sport for him and Bellina for her. These iconic Movado watch designs deliver 24/7 MotionX activity monitoring and offer new functions like steps activity tracking, sleep monitoring, sleep cycle alarms, get-active alerts, dynamic coaching, two-year battery life and automatic world clock with time and date setting through synchronization with a paired device. There are six timepieces in the collection with an opening price point of $995. Our second introduction is Movado BOLD Motion powered by HP. Infused with Movado's modern design aesthetic and harnessing HP's performance technology, Movado BOLD Motion notifies users of incoming phone calls and texts, manages time and priorities, monitors daily steps and tracks progress through app-enabled functionality. Movado BOLD Motion is offered in two unisex styles for $695. This illuminating design for the modern world maintains up to a full-week of smart module battery life. They will be available for sale in time for holiday shopping. We are excited about the possibilities wearable technology offers Movado Group and we have every intention to capitalize upon this market catalyzer across our entire portfolio and on a global basis. Our approach has been to collaborate and partner with best-in-class technology company, which is building our own. We believe our approach creates the greatest value for our consumers. We are starting to see the benefits of the strategic decision we’ve been making over the past year. We have invested and will continue to invest in innovation to deliver beautiful compelling product, partnering the top talent and technology. We believe that despite difficult Retail environment, great brands with great product and great execution can attract consumers to purchase. Although there are many unknowns in the fourth quarter given our innovation pipeline and given the continued momentum of our brands in key markets, we are maintaining our net sales and operating income guidance for full year. With net sales in the range of $590 million and $600 million and operating income to increase to approximately $72 million to $75 million, it shouldn’t no further worsen the global economic and Retail environment, significant fluctuations in exchange rates or other unusual events. I will now turn the call over to Sallie.

Thank you, Ricardo and good morning everyone. For today’s call, I will begin with a review of our financial results for the third quarter and first nine months of fiscal 2016 and close with our outlook. Before I begin, I would like to point out the special items included in our year-to-date results for fiscal 2016. Please refer to our press release for description of these items as well as the table of GAAP and non-GAAP measures. Our GAAP results for the first nine-months of fiscal 2016 include a $2.7 million pre-tax charge which equates to $2.5 million after tax or $0.10 per diluted share in connection with our operating efficiency initiatives and other items. The balance of my remarks will exclude this special item, which was recorded in the first quarter. Beginning with a review of our income statement, sales for the third quarter were $185.6 million, a decrease from the same period of the prior year of approximately $2.9 million or 1.6% as currency unfavorably impacted our sales by $6.9 million. In constant dollars, sales increased 2.1% primarily driven by our licensed brand business. Sales were down by 0.6% in the U.S. and in constant dollars increased 5.7% internationally. Sales in our Wholesale segment were $169.4 million, a decrease of 1.9% from $172.8 million for the same period of last year. In constant dollars, Wholesale sales increased 3%. By geography, our U.S. Wholesale business decreased 1.2% to $90.2 million compared to $91.3 million last year. Our international Wholesale business decreased 2.8% to $79.3 million compared to $81.5 million in the prior year. In constant dollars, international sales increased 5.7% led by a strong performance in Europe. Sales from the company's Retail business increased to approximately $16.2 -- I'm sorry -- $16.2 million compared to $15.7 million last year. At the end of the quarter, the company operated 39 outlet stores. Gross profit was $101.1 million or 53.9% of sales compared to $99.8 million or 53% in the third quarter of last year. The increase in gross margin was primarily driven by a 210 basis point favorable impact of channel and product mix, which includes selective price increases and sourcing improvement opportunities, partially offset by a 140 basis point unfavorable change due to foreign currency exchange rate. Operating expenses were $66.6 million above the prior year period by 0.2%. The increase as compared to the prior year was primarily the result of a $2.5 million increase in compensation and benefits including higher performance based compensation. This increase was partially offset by a decrease of $800,000 million resulting from the favorable impact of foreign currency exchange rates and $800,000 decrease in the churning of marketing expense and the remainder is due to reductions and other selling expenses. Operating income increased 24% to $33.5 million or 18% of sales compared to $33.3 million or 17.7% of sales in the year ago period. Due to the global nature of our business, fluctuations in currency impact all aspects of our P&L. On a constant dollar basis, our operating profit would have increased approximately 9.9% as compared to last year's third quarter results. Income tax expense in the third quarter of fiscal 2016 was $11.2 million or 33.9% effective tax rate, which was higher than the 30% effective tax rate plans due to the global mix of our earnings. This compares to an income tax expense of $10.9 million or 32.7% effective tax rate recorded in the third quarter of the prior year. Net income in the third quarter was $21.5 million or $0.92 per diluted share versus net income of $22.2 million or $0.87 per diluted share in the year ago period. Currency headwinds negatively impacted our earnings per share for the third quarter by approximately $0.10. The favorable impact of our share repurchase program was partially offset by our higher effective tax rate. Looking at the nine-month period ended October 31, 2015, sales were $451.7 million, a decrease of 0.3% from fiscal 2015. On a constant dollar basis, sales increased 4.1% as currency unfavorably impacted our sales by approximately $20 million. Gross profit was $242.3 million or 53.6% of sales as compared to $242.6 million or 53.5% sales last year. The increase in the current year gross margin percent was driven by a 200 basis points favorable impact of channel and product mix, which includes price increases and sourcing improving opportunities partially offset by 190 basis points unfavorable change uniform currency exchange rate. Operating income was $61.2 million compared to $61.4 million in fiscal 2015. On a constant dollar basis, our operating profit would have increased approximately 14% as compared to last year’s result for the same period. Net income was $39.7 million or $1.65 per diluted share, as compared to net income of $41.7 million, or $1.63 per diluted share in the year ago period. Now turning to our balance sheet. Our cash at the end of the third quarter of fiscal 2016 was $181.2 million versus $157.9 million at the end of the same period of fiscal 2015. At the end of the third quarter of fiscal 2016, we had $40 million outstanding on our revolver. Accounts receivable were down $4.2 million, as compared to the same period of last year. While sales were down 1.6% in the quarter, inventory was down approximately $3.7 million as compared to the same period of last year. Capital expenditures for the nine months were $5.8 million and depreciation and amortization expense was $9.4 million combined. We project capital expenditures of approximately $10 million for fiscal 2016. Now onto our guidance for the full year. We continue to believe there is uncertainty in the global economic environment. Our guidance for the remainder of the current fiscal year does not take into account a potential worsening in the global economy or Retail environment, and assumes no further significant fluctuations in foreign currency exchange rates. For fiscal 2016, we anticipate our sales will increase to a range of $590 million to $600 million. Gross margin rate is expected to be approximately 53.5%. Operating income is projected to be in the range of $72 million to $75 million and net income is now planned to be in the range of approximately $47.5 million to $50 million on a higher estimated effective tax rate. We continue to expect diluted earnings per share in fiscal 2016 to be in a range of approximately $2 to $2.10, reflecting the higher estimated effective tax rate of 32%, offset by a lower estimated activity share counts resulting from our share programs. The guidance we have provided assumes no additional unusual items for fiscal 2016. Now, I’d like to turn the call over to Efraim.

Thank you, Sallie. We're pleased with our results for the quarter and the nine months, especially given the Retail environment in North America, Asia and Latin America and the currency headwinds that we have faced. We went into this year, taking a proactive approach by casting well-thought-out selective price increases, focusing on supply chain costing opportunities and continuing to drive demand for our brands through strong marketing efforts and continued product innovations. The introduction of Movado Edge during the end of the third quarter solidifies Movado as the true design leader within the watch category. We are very proud of our collaborations with one of the world's leading industrial designers, Yves Behar. We are also pleased to have recently announced two collaborations in the wearable category, with Fullpower/MMT on the Swiss made front and Engineered by HP for our Movado BOLD Collection. Although it’s in its infancy, we believe that connected watches will have an important role across our brand portfolio. As we enter the important holiday seasons, we have strong marketing plans in place in each of our brands to help drive traffic and sell through. We are proud of how our teams have executed during the first nine months of the year and recognized that we need to continue to execute in a strong manner to be successful in an increasingly volatile Retail environment. I would now like to open up the call to questions.

Thank you. [Operator Instructions] And we will take our first question from Oliver Chen with Cowen and Company.

Hi. Thank you. We just had a question regarding Wholesale and this dynamic that's been happening. What do you think is a catalyst in the timing from which sell-ins will start to reaccelerate and are you seeing a fair degree of volatility within your Wholesale channel as you looked at reads to the customer?

Well, as I think, Ricardo mentioned in the call, our brands have been outperforming the watch category and Retail sell-through. So, we're very pleased with that. But as everybody has witnessed over the last quarter, the Retail environment went through a very challenging time in the third quarter. One of the important things is there is always Christmas in the fourth quarter. So, I think that’s going to be an important catalyst to how the retailers and the year. But I think given the continued volatility in environment, you are going to see a continued focus on inventory levels, not only in watches, across retailers overall.

Okay. And Efraim, on the long-term picture for connected watches, how are you feeling about your distribution footprint and how that might be different from traditional? And also over time, what percentage of your portfolio do you think will end up being within this connected discipline? And just related to this question, we wanted to know about new versus existing customers on the connected watch front and your thoughts there?

Yeah. I think our approach to the category and I said it’s very early on in the development cycle. So, I think there is going to be a lot of evolution in this category, but we are giving you beautiful wristwatches that are watches first. And whether they're connected or not, they are beautiful watches and I think that’s what’s important for us and the current type of offering that we have is being offered through current distribution channels. So, I think it would be way too early to predict how big a percentage of our businesses will be in the future. I don't know. Ricardo, would you like to add to that?

I agree with you. The other important point here is these are the early days as Efraim mentioned. And there is a big runway in front of this category than we think about the international markets. So, we are starting in the U.S. We have a pipeline of innovations with connected technology for next year that we're very excited about. As we get traction with this, we see opportunity in international markets as well. And our retailers around the globe are saying we are ready for this. So that’s the exciting part of this.

Got it. And Efraim and Ricardo, the price increases were impressive in terms of achieving some -- which parts of your portfolio could you have the most opportunity in and do you feel like you made the right decisions in terms of what prices as you kind of postgame elasticity?

So, we are very pleased. And as we have discussed previously, we are very thoughtful on how we did this. I would say that in the vast majority of all the increases, we saw the expected results. I would tell you there were a few here and there that we didn’t see the results. But in general, this is the right decision for us. The consumer accepted these pricing increases very well and now we're recalibrating some price points here and there. But generally speaking, this is a very positive decision, not only for the consumer but our retailers also of course benefited from expanded margins from this business as well.

Okay. And to the final question, it's a little hard to ignore just all the volatility and the things happening with tourism flow and the European crisis. Could you comment on your thoughts on how it will impact your business and any factors we should think about when we model the traffic flows globally?

I think you just saw what occurred, unfortunately the tragedy in France last week. There are 10 days to go now and I think it’s very early to see what the traffic patterns will be. It will obviously affect tourism to a certain level but you don't know if also people will be back shopping at home versus shopping overseas. So, I think it is very early to see what effects on the overall business that will have and when travel can break through to normal levels.

Great results in a tough environment and happy holidays. Thank you.

Thanks, Oliver.

Thank you.

We’ll go next to Eddie Yruma with KeyBanc Capital Markets.

Hi. Good morning and thanks for taking my question. I guess on the Edge, obviously great praise you’re receiving. Can you talk about the sell-in for that, and kind of what, are you getting incremental slotting, are you displacing an existing SKU?

So, basically in all the -- we have very limited distribution for Edge. We are launching it very similar to how we launched BOLD about four years ago. And at every retailer that we’re operating in, we’re obtaining incremental space for Edge. The whole collection today is 14 SKUs, it will grow. But we’re very pleased with the initial results and have gotten great reviews from our Retail partners, the press and even very early on also from consumers, so we’re pleased with that.

Great. And then regards to that follow-up on Oliver’s question, the Wholesale, are you guys were one of the first to identify the destocking that’s been occurring? Do you at least feel like the incremental pressure year-over-year is beginning to abate, or is it still too volatile of an environment to predict accurately?

So, I think it is still too volatile in environment. What we have seen is -- we’ve been talking about this, as you mentioned for quite a while now. We have been working with our Retail partners and they’ve been great partners for us. In some cases where we need to be other cases, given slow Retail that they faced in Q3, they’re making other adjustments. So this is a work in progress and obviously, Q4, the big sales for all of us. This will effect with the number ends up being. Like we said before, we’re very confident in our innovation pipeline. Our product offering for this holiday season is really very strong, not just because we’re saying it but our Retail partners are also commenting on the strengths of our product offering across our portfolio. And we believe that innovation and beautiful product will attract consumers to purchase. That is the thesis behind our success and that is something we’re focusing on for great execution in the fourth quarter.

Great. Thanks. Good luck. Best of luck for holidays.

Thank you. Happy holidays.

[Operator Instructions] We’ll go next to Kristine Koerber with Barrington Research Associates.

Good morning. A couple of questions. First, can you just give us a little more color on Europe and the brands that are driving the strong growth that you’re seeing in Europe?

So, in Europe, it’s mostly our licensed brands that are having great performance. And obviously, it’s our bigger brands that are driving it. HUGO BOSS has had spectacular results in Europe. And we’re particularly pleased because this is happening in big markets. So the U.K., France and Germany, as I mentioned are having spectacular results. We’re also seeing this on Tommy Hilfiger and there is different talks of growth for the rest of the brands but overall we’re very happy. We’re also very pleased with the results of the Movado brand in the U.K., which is one of our focus market, still very small but the sell-through is also really accelerating, so we’re very pleased with that.

Okay. And that’s helpful. And then just given the environment and all the uncertainty and what’s expected to be a highly promotional holiday season, do you have any concerns about the promotional cadence that people are talking about for the holiday season and impact on, possibly your business?

Well, we don’t operate in a promotional environment but obviously our retailers do.

All right.

And it’s been quite promotional over the last several holiday seasons. I think there is possibilities you’ll see is scaling back of that in the future. I don't think you'll see that this holiday season.

Okay. And then lastly, can you just give us some details on your marketing plan for the Movado Motion watches? How you’re going to be marketing those, the new collection?

Well, you’ll see a very strong newspaper campaign, as well as digital campaign on Movado Motion. In fact, this weekend, there was a full-page ad in the New York Times. There is a full-page ad today in the New York Post on Movado Museum Sport Motion. And most of that will be in newspaper and digital this fall.

All right. Thank you.

We’ll go next to Rick Patel with Stephens Incorporated.

Thank you. Good morning, everyone and sorry if I missed this. But question on your domestic performance, can you talk about how much of the growth was driven organically in terms of the sales through existing points of distribution as opposed to how much was driven by an increase in the distribution points themselves through new brands like Ferrari?

So we are not going to -- we can’t give you the breakdown but what I will tell you that our like-for-like growth was there for most of our brands and certainly for the Movado brand which is our flagship.

But our performance basically in the U.S. and I’ll add to Ricardo's point is a 100% in existing stores. We really did not open up any new distribution this fall, might be selective few doors for certain products but not any large distribution growth.

And then also a question on pricing, so you took up prices earlier this year and just given what FX is doing right now into some of the headwinds that they’re exerting on some competitors. Do you see an opportunity to take prices even higher as we think about the next few quarters in order to continue some topline momentum?

I think the opportunity now comes really more in newness where you focus on making sure that you’re able to protect your gross margins versus price increases. There maybe some opportunities in Europe down the road but it’s not built into our plans right now.

And I just want to build on that, I mean we are very committed to expanding gross margin. And there are other initiatives that I mentioned in my prepared remarks of managing other levels of gross margin in terms of product mix, channel mix and we have the same internally called the magic quadrant while we’re focusing on these categories of these products. And the entire organization embraces and we’re going to continue to see results coming from these initiatives, along with of course, supply chain improvements through this.

Great. And then just one more if I may. Have you noticed a difference in how department stores and jewelry stores are buying inventory versus the prior quarters? We seem to be going through a big shift in the watch industry, somewhere away from traditional watches more towards smart watches, obviously, some of your new lines as well as those of some competitor. So how are you approaching that shelf space opportunity? And have you noticed the big change in how they're planning for inventories versus prior quarters?

Well, the reality is we are fortunate to have -- I’ll speak of Movado first. This is very powerful brand in many of our retailers, benefit by having Movado in our stores. So I think they understand it very well and they’ve been supportive along these lines. Of course, there are -- some of them have even thought about connected technology. They made initial flow rates into creating either new sections or avoiding more inventory there and we’ll see what the result is. I mean, for the time being, they have been supportive of our connected technology initiative. And like I said in our prepared remarks, we are very confident that we’re offering is what consumers want for the Movado brand. So we’ll see it at the end of the quarter how we perform. But we’re very confident both in the design of the watch, the functionalities and the app is really fabulous. So we’re very confident.

Thank you very much. Good luck this holiday.

Thank you, Rick.

Thanks, Rick.

Thank you, Rick.

We will go next to Jeremy Hamblin with Dougherty & Company.

Good morning. Thanks for taking my question. I wanted to ask just in terms of the guidance for the fourth quarter, I think, if you look where currencies are, it implies that constant currency growth is going to be somewhere in the -- what’s call 6% to 12% range? First, do I have that about right? And the second part would be in terms of where you are going to see that acceleration in constant currency growth? Is that going to be driven by just a new product whether it would be Edge or the two smart watch collections? Can you just provide a little bit more color around where you are getting that confidence to guide to improve results in the fourth quarter versus what you are seeing the previous three quarters? Rick Coté: So, I will take the first part of that and then I will hand -- I will turn the currency part over to Sallie. I think, we are excited as Ricardo mentioned and I mentioned in my remarks about, the innovation pipeline that we have introduced in Q4 for this holiday season and both the connected initiatives, as well as major product introductions like Edge. But also new products and innovation across all of our brands, things like men’s assortments in our Coach brand that is performing very well. So I think there is -- it’s really driven by newness and marketing initiatives across our brand portfolio. And now I will turn the currency part over to Sallie.

Yeah. So, Jeremy, just quick one on the currency, obviously, we don’t guide to a constant currency number, we guide to an as reported number. But this year-to-date we had $20 million already in our topline related to currency and if you recall last year, during the fourth quarter is really when we had the big change in currency. So we will continue to have a few months where there is definitely a difference between this year and last, and take it through the end of the year, obviously, two and half months up three being somewhat different on our constant currency comparison. But even on an as reported basis, you could do the math with your models and you will see that there will be counting on some growth based on the initiatives that we have talked about in the fourth quarter.

Okay. And then just a follow-up on that, in terms of the wearables in distribution for the holiday season, is that purely going to be available online or are there going to be doors -- some of your traditional doors that it’s going to be sold through during the holiday season specifically? Rick Coté: So you will find that today in major department stores as well and on their website, as well as in major chain jewelers and buying jewelry independent. So it will be available in-store, as well as online.

Okay. And then, one other question… Rick Coté: We do …

We probably rollout. Rick Coté: Right. We are rolling it out. We are doing a lot of training in-store. We have special visuals for the product that highlight the technology and highlight the app that that’s on the phone, it’s available for Android and iOS, so and it’s a well-tested app, so we are really excited about that.

Thanks. And I just wanted to ask the follow-up on operating expenses, you mentioned opportunities that you had on gross margin moving forward, what about as we look at SG&A moving forward? I think in -- you mentioned there was a slight benefit from currency in the third quarter, but I think, SG&A is likely to be up year-over-year? How should we look at that? How should we think about that moving forward? Do you see additional opportunities to lever operating expenses moving forward or do you feel like this year has been somewhat of a leaner where its been contained and to expect maybe less opportunity to lever that moving forward?

I will address the few things and then I will see if anyone else wants to jump in Jeremy. So theoretically we are talking just about fiscal ’16 at this moment, we haven’t gone out with anything further going into next fiscal year and beyond. We’ve had the benefit this year in SG&A where currency has taken our numbers down. So we have continue to invest in -- this year in people, in marketing, then all the things that we need to do to support the brands and this year we have performance based compensation in our number where a year ago we didn’t. So we are very happy with the way that we invest. Although, as you know, we are very good here at running things lean and really watching how we spend our money. So it’s a combination of the two, but we are not giving anything up. We are definitely supporting what we need to further growth and the health of this business.

Sallie, could you quantify what the cumulative benefit has been to SG&A from foreign currency this year?

The Q will be out later today, Jeremy, a lot of that detail will be in there and if you have any further questions after that, I am sure we can help you.

Okay. Great. Thanks for taking my questions and best of luck this holiday season.

Thank you.

Thanks, Jeremy.

And that will conclude our question-and-answer session. I would like to turn the conference back over to management for any additional or closing remarks.

I would like to thank all of you for participating today on our call. I wish everybody a fabulous Thanksgiving and a great holiday season. Thank you again for being with us.

That does conclude today’s conference. We thank you for your participation.