Debra Abraham – Vice President Investor Relations Joseph Gromek – President, Chief Executive Officer Lawrence Rutkowski – Chief Financial Officer Helen McClusky – President Warnaco Intimate Apparel and Swimwear Frank Tworecke – President Warnaco Sportswear Group

Matt McClintock – Barclays Capital Todd Slater – Lazard Capital Carla Casella – JP Morgan Chi Lee – Morgan Stanley Omar Saad – Credit Suisse Eric Beder – Brean Murray, Carret & Co. Sean Naughton – Piper Jaffray David Glick – Buckingham Research Evren Kopelman – JP Morgan

At this time, I would like to welcome everyone to the Warnaco Group third quarter 2009 earnings conference call. (Operator Instructions). I will now turn the call over to Debra Abraham, Vice President of Investor Relations.

Joining me on the call are Joe Gromek, Warnaco's President and CEO and Lawrence Rutkowski, our CFO. Also joining are group presidents Helen McClusky and Frank Tworecke. Following our comments this morning, there will be an opportunity for you to ask question. Today's comments are based on Warnaco's adjusted results on a continuing basis, which excludes restructuring expense, pension income, and certain tax-related items. A reconciliation of actual results to adjusted results is available in the schedules accompanying today's press release. Consistent with previous practice, our operating results will be discussed excluding the allocation of shared services. These allocation amounts can be found in the tables attached to our earnings results released this morning as well as in our Form 10-Qs and 10-Ks. Additionally, today's call includes comments concerning the Warnaco Group's business outlook and contains forward-looking statements. Any forward-looking statements and all other statements that may be made on this call that are not based on historical facts are subject to risks and uncertainties. Information concerning a number of factors that could cause actual results to differ materially from the information that will be discussed is available in Warnaco's filings with the SEC including Warnaco's Form 8-K furnished today. Now let me turn the call over to Joe.

Our strong third quarter results validate our diversified business model and reflect the continuing success of our long-term growth strategies, namely, maximizing our Calvin Klein businesses, increasing our international presence, and expanding our direct consumer footprint. Our heritage businesses also continue to contribute positively to operating results and cash flow. We remain focused on operational excellence, aggressively managing expense, inventory, and working capital resulting in positive operating results and very positive cash flow generation. Achieving these powerful results in the midst of a most challenging economic environment is a testament to the quality of our brands and business model. In total for the third quarter, while reported net revenues declined 5%, we were down less than 1% in constant currency. Operating margins rose 210 basis points to 12%. Adjusted earnings were $0.75 per diluted share. We ended the quarter with approximately $230 million in cash on hand. Turning to the components of our growth strategy and beginning with Calvin Klein, local experience with Calvin Klein brand complemented by innovative product and marketing continues to be a powerful driver of revenue and profit. In constant dollars, Calvin Klein net revenues were up 2% in the quarter with operating margins increasing 170 basis points to 19%. Strength in our international business more than offsets domestic declines. Looking at our global expansion, in constant dollars, total international revenues were up 6%, accounting for 61% of our total company revenues. We achieved growth in new and existing markets with particular strength in Latin America, Europe, and Asia. In the quarter, we continued to advance our direct-to-consumer development. Retail revenues increased 10% and now represent 23% of total company. We opened 40 new points of distribution and ended the quarter with just over 1,040 shops. For the year, we remain on track to grow square footage by over 20% or more than 120,000 square feet. In addition to new store development, our comparable store sales were up 2% in the quarter. We were especially encouraged by our October results which validate the strategic decision we made last fall to continue to invest in our direct-to-consumer initiatives. While we did pull back from other capital spending projects in response to the economic environment, we continue to support retail expansion, and we are now reaping the rewards from that commitment. In October, revenues in our own stores grew by 31%, and we recorded double-digit comparable store sales. Going forward, we continue to project powerful revenue growth from this initiative. Turning to our heritage businesses, profitability remains our primary focus for Speedo, Chaps, and core intimates. While revenues, as expected, declined 13%, operating margin, excluding the one-time swimwear charge, improved 190 basis points to 12%. Looking at the fourth quarter, we are encouraged and optimistic about our prospects for growth. As we end 2009 and move into 2010. The power of the Calvin Klein brand, the positive benefits from our growth and profitability initiatives and focused execution by our team, have generated strong year-to-date performance and provide us with a platform to continue our success. Based on our solid year-to-date results and current business trends, we are raising our 2009 guidance. We are confident that we can leverage our global organization and infrastructure and strong financial position to continue to enhance shareholder value. Now I'd like to turn the call over to Larry to review our third quarter financial results in more detail.

Turning to our third quarter results on an adjusted basis, as Joe mentioned, net revenues were down 5% on a reported basis and down less than 1% on a constant currency basis. A 6% constant dollar increase in our international business was offset by a 10% decline domestically. Gross margin decreased 260 basis points to 44% of net revenues primarily due to the adverse effects of currency in the one-time swimwear charge. SG&A expense declined $34 million, or 17%, to $165 million. SG&A as a percent of net revenues decreased 470 basis points to 32%. The decrease reflects the ongoing benefits associated with our expense reduction initiatives as well as the benefit from foreign exchange rates. The prior-year quarter also included approximately $15 million of currency-related cuts. Operating income increased 15% to $62 million or 12% of net revenues, up 210 basis points from the prior-year period. Our normalized tax rate was 33.9% for the quarter compared to 31.9% in the prior year reflecting a higher mix of profits generated in higher tax jurisdictions. For the year, we are now anticipating an effective tax rate between 33.5% to 34.5%. Income from continuing operations was $35 million or $0.75 per diluted share, which included the $0.5 per diluted share related to the one-time swimwear charge. Turning to the balance sheet as of October 3, 2009, our efforts to manage expenses and conserve working capital have been successful yielding year-over-year reductions in inventory and $100 million in cash on hand. At quarter end, cash and cash equivalents were $229 million. Additionally, we had net borrowings on our revolvers, and we are net cash positive by $20 million. Inventories were $281 million as of October 3, 2009, an 11% decline compared to the $316 million in the prior year. We are very comfortable with the level and quality of our inventories and we continue to plan very conservatively. Accounts receivable were $326 million, virtually flat with last year. Our proactive response to last year's economic decline contributed to the strong financial position we are in today with net operational working capital down $45 million year over year. We said last year that we would focus on controlling things we could control, and that strategy has clear worked to our advantage. Turning to our fiscal 2009 outlook, based on our strong performance to date and our outlook for the balance of the year, we are raising our fiscal 2009 guidance. On an adjusted basis, excluding restructuring expense, certain tax-related items, and assuming minimal pension income, we now anticipate reported net revenues declining 3% to 5%. On a constant currency basis, net revenues are expected to rise 1% to 2%, and we now expect diluted earnings per share from continuing operations in the range of $2.70 to $2.80, exceeding last year's results. We are quite pleased with our third quarter and year-to-date performance. We believe the balance of the year will benefit from revenue growth together with our expense reduction initiatives in sustained inventory management. Our solid cash position and strong balance sheet affords us the flexibility to support our strategic initiatives and should position us to gain market share and create long-term shareholder value. Now let me turn the call over to Helen for a review of intimate apparel and swimwear.

Due to the calendar of new product shipments, fixture expansions in 2008, and projected declines in wholesale replenishments, the Intimates Division third quarter results were as expected. Revenue versus the prior year period was down 11% as reported, and down 8% in constant currency. Operating margin improved nearly 100 basis points to over 20% reflecting reductions in SG&A. Calvin Klein underwear revenues for the quarter declined 9% as reported and 5% in constant currency. Operating income was flat, generating a 200 basis point improvement in margin over the prior year period. Year-over-year revenue decreases were largely due to a planned reduction in new product shipments for the quarter and lower replenishment in department stores. Our international business declined slightly with increases in our direct to consumer business which was up 14% in total, and up 1% on a comp store basis offsetting shipments to wholesale accounts. The U.S. was down 11% due to the reduction in new products, lower department store replenishment and limited availability of excess inventory to ship to off-price accounts. The U.S. department store business continues to be difficulty overall, posting a double-digit decline in the men's underwear category, and a single digit decline in women's. While Calvin Klein underwear is not immune to this trend, we have seen improvement in sell through in recent [inaudible] and October replenishment was strong. Internationally, our Men's Steel United introduction is contributing positive results. We supported the program with a nine-country model search which is generated significant in-store activity and consumer interest. We've had nearly 3,000 entries to date. The launch of our new Perfectly Fit products is off to a very good start in all geographies and is helping us to build our importance in the bra category. As a result, we expect growth in the fourth quarter and we're currently seeing it in our owned retail. October retail sales increased by 29%, with comp stores up 10%. Looking beyond 2009 we've just completed presenting our spring 2010 initiatives, and I'm very excited to report that the initial orders for our men's launch are projected at over 1,000,000 units, twice the size of Steel, which you may recall was the big success story in 2008. Needless to say, we've had a very encouraging response from our customers. We're comfortable with the progress of the Calvin Klein business to date. We believe our momentum will accelerate as we move into 2010 with major launches and marketing initiatives planned in both men's and women's. With the strategies we've put in place and a continued high level of execution, we're optimistic about our potential to extend our leadership position in the designer underwear segment. Revenue and operating income were down for the quarter in core intimates as projected. The comparison includes Olga and Warner's expansions in 2008 and reflects a shift in new product timing in Warner's. The moderate bra market remains challenging, down 4% year to date but we are confident in our direction and Warner's and Olga continue to hold market share increases. For 2010, we've recently secured all door programs with two major mass retailers. In the department store channel, the Warner's launch of True Fit which will ship in the first quarter of 2010 has booked nearly 400,000 units and will likely be the largest single bra launch in our history. We continue our focus on offering innovative, differentiated products which we believe is key to achieving our goal of improved profitability. The third quarter is not a significant revenue quarter for the swim group. Revenue declined slightly at minus 5% due to reduced shipments to the sporting good channel which included Olympic themed merchandise in 2008. Year to date, considerable progress has been made in improving our operational effectiveness. As a result, even with the onetime $3.5 million charge, due to the FINA ruling banning certain suits, operating results were equal in 2008. To address the new FINA requirements, we have worked closely with our customers to exchange their existing inventory for current Speedo suits that meet the new guidelines. For future demand, Speedo's Aqualab has responded to the new requirements quickly and we will be in a position to launch a comprehensive line of new suits, LZR Elite and LZR Pro in 2010. We expect to gain market share as things begin to settle. With new systems and processes in place, we're increasingly confident that we can achieve our goal of high team profitability over time and sustain our leadership position in competitive swim. Despite challenges of a weakened economy, particularly in the U.S., the intimates and swim divisions continue to make positive progress toward their goals. We're satisfied with the results to date and optimistic that we're positioned to achieve our long-term objectives. Now I'll turn the call over to Frank to discuss sportswear.

We are pleased to report that third quarter results for the sportswear division were better than expected. While revenues did increase by 1% operating income improved by 150 basis points to over 17% of sales, net revenue and operating income for the quarter were negatively impacted by fluctuations and foreign currencies. On a constant dollar basis, the revenue for the sportswear group increased 3% with international sales growing by 11%. Beginning with Calvin Klein Jeans, revenues on a constant dollar basis improved by 6% with international sales growing by 12%, more than offsetting a decline in domestic sales. Sales outside the U.S. for the quarter represented 76% of revenue, up from 72% a year ago. International growth is being fueled by our direct to consumer initiative, new product launches, and the continued growth of the accessories category. In the quarter, direct to consumer revenues grew by 9% with comp stores improving by 2%. In the quarter, we opened a total of 15 new points of distribution throughout Europe, Asia, and the Americas. Our new store formats have been well received, and we continue to review real estate opportunities to maximize the growth potential of the Calvin Klein Jeans brand. The introduction of the new Body Jean, a body enhancing fit for both men and women and supported by an extensive international marketing campaign featuring Eva Mendez and Jamie Dornan achieved very positive sell-throughs. The new fall Calvin Klein Jeans apparel product, coupled with an expanded assortment of accessories has propelled the overall increase in international sales. Although the U.S. Calvin Klein Jeans department store business remained challenging in the quarter, we are beginning to see positive momentum at retail. Rates of sale are improving as new fall product flows to the selling floor. Sell-throughs on the new Body Jean, along with fashion trends in the Boyfriend and Skinny Jean silhouettes are in the high single digits. Better sell-throughs at wholesale coupled with our positive momentum in the direct-to-consumer channel are supporting our optimistic outlook for the remainder of the year. Turning to the Chaps brand. While revenue for the Chaps brand and constant currency was down $5 million for the quarter, operating income rate improved by 40 basis points to over 19% of sales. We successfully maintained our gross margin rate while reducing SG&A by 30 basis points. The new fall product deliveries are achieving better than expected sell-throughs in all channels of distribution, especially in the woven and knit categories. As we approach the holiday season, we are optimistic that revenues will increase and operating income will continue to outpace last year's results. We've just completed our spring '10 market for the Chaps brand and are very excited by the positive response of our customers to the new spring line. Bookings to our existing accounts are increasing year over year and we are adding over 300 new doors to our distribution base for 2010. We are reintroducing the Chaps brand in all Carson's, Bon-Ton doors and continuing our store expansion at Kohl's, according to their new store opening schedule. The Chaps brand is a well-designed, moderately priced, traditional lifestyle brand that has built significant brand awareness over the years and continues to outperform its peers on the retail sales floor. As a result, the Chaps brand will not only continue to generate significant operating income, but will reestablish itself as a revenue driver for Warnaco. We are confident that the new product offerings in sportswear, strength of the Calvin Klein Jeans and Chaps brands, and our ongoing focus on effectively executing on our operational initiatives will generate positive results for the future. This concludes our remarks.

(Operator Instructions). Your first question comes from Matt McClintock – Barclays Capital. Matt McClintock – Barclays Capital: So first question would be for Larry. Larry, can you elaborate more on the mix shift impact on gross margin? What exactly was that mix shift, and how should we think about that going forward?

I think a couple things on gross margin. As we reported that gross margin was impacted by currency. We said in our earnings release about $20.8 million. And remember, the swimwear charge was also taken through gross margin and that additional 3.5. So the gross margin excluding those items would be roughly flat. In terms of mix change, obviously as we look and show greater growth in international, as we continue to drive direct consumer, that is the mix change that over time should benefit our gross margin apples-to-apples. Matt McClintock – Barclays Capital: And the second question would be regarding comps. At the analyst day, you released a comp number of quarter-to-date improvement 3.3% through September 25 and then for the full quarter it came in at 2%. I just want to know, how bad was that last week? And Joe, when you talked about trends in October improving or getting better, I don't want to put words in your mouth, how should we look about that? Should we look at it towards the 2% or should we look at it towards the 3.3%?

I think what happened at the end of the quarter at the end of September was we had some anomalies in some parts of the world. And I believe in Asia there was some holidays that kicked in and in some cases shops were closed for three or four days. So that's what really impacted us. Matt McClintock – Barclays Capital: And in October?

October, I sit back and I look at the results here and we are really quite pleased with what happened here. And with comparable store sales up 10% and top-line growth up over 30%, this is the best performance that we've had probably since last year. And begin to equate that to the scale of our retail business, and the scale of our retail business now is approaching $500 million. If we can grow that by 30%, just think about what that does for our future opportunities.

Your next question comes from Todd Slater – Lazard Capital. Todd Slater – Lazard Capital: I just want to quickly go to intimates which was down 8% versus increase in the last couple of quarters on a constant currency basis. And I know that you said that there were some issues at Warner's but that's a pretty small piece. So I was just wondering if maybe Helen could give us some color on that and how we should be looking at fourth quarter and Spring '10 on a constant currency basis. And then after that, just sort of what are you hearing on the wholesale spring orders from the department store channel?

Looking at the third quarter on intimates, as I mentioned, Calvin Klein was down 5% in constant currency for the quarter, so let me focus on that since that seems to be sort of the root of your question. There are a lot of moving parts in the quarter, and before I go into the details, what I would like to say is as we laid out our plan for 2009 and flowed the monthly business and flowed the quarters, we didn't have any expectation that this quarter was going to be up year-over-year. What I would tell you is we actually came in significantly better than we had planned. So despite it was down, it was better than we thought because of timing shifts in new products. The black and white launch which was a very high-price, premium program we did not expect to be a big revenue driver. And in fact, we focused more on value packs in the U.S., recognizing that that's what was going to be more of a driver for the business than a premium product for this marketplace. So again, a lot of moving parts. Secondly, the international business, in particular in Asia, we have some distributors that were actually planning receipt flow down because we're planning for future takeover acquisition of those marketplaces, so that impacted the quarter as well. The U.S. was down 11%. International on a comp basis was relatively flat. Again, better than we expected. We did not plan the quarter to be up. So looking forward, we would expect a return to growth in the fourth quarter. And for 2010 in general or the first half in general, we're really pleased with the reaction we're getting from our new product launches. It has definitely exceeded what we had expected coming into the year, so we are really quite optimistic and encouraged going into 2010. The other comment I would make is October replenishment in the U.S. was quite strong, so I think that bodes well for some sort of increase in the fourth quarter. Todd Slater – Lazard Capital: Is that fourth quarter outlook sort of increased more like in line with what we saw in second quarter or higher than what we saw in the first quarter? How would you characterize what you expect there?

Todd, we don't usually go into that level of detail. Todd Slater – Lazard Capital: Maybe you could just quickly summarize what you're seeing on wholesale spring orders in the channels.

In general, we're seeing that things are better than they had been. Our accounts are still approaching the business. In the U.S. conservatively, but in fact, we're seeing positive movement over where they've been over the last nine months. Remember, the department store channel represents about 11% or 12% of our business today. It is an important segment obviously, because our brands are positioned nicely there. But it is a relatively modest part of the business. The mid-tier channel represents about 8% of our business with the heavy hitters in there and I think they're being much more aggressive at this point and time than they have been in the past.

Your next question comes from Carla Casella – JP Morgan. Carla Casella – JP Morgan: I have one housekeeping item and then one other question. On the housekeeping side, did you give depreciation amortization or CapEx for the quarter?

It will be in the Q that we expect to file within the next 24 hours, but on an annualized basis our amortization's around $9 million. Our annualized depreciation is just around $36 million. Carla Casella – JP Morgan: I don't think you've ever broken out quarterly rent expense, but can you give us a sense for with all of the retail you've been opening, how much your rent expense should go up year-on-year?

Typically, we disclose the full amount of operating commitments, and we do break out rent expense. So we had anticipated year-over-year that the rent expense would grow in proportion with the expansion of stores. We're expanding by 20%, but at the same time, we're finding that the market is a little more receptive as we open up new stores. And many of our Asia stores are a percent of revenue. Carla Casella – JP Morgan: And then on a business front, the Carson's Bon Ton, what is the timing of your reintroduction into the stores, and what number of doors is that in terms of expansion? Were you in any of their stores before this?

It was an interesting transition that has occurred over the last year to 18 months. If you can think back that far, and this business has been somewhat of a long year, there was a point in time where many department stores were focusing on the so-called better brands. And in the transition of what's gone on in the economy in the last year, there's an enormous amount of credence that's been given to the value channel or product that can give you great brand equity and give value to the consumer. We had been in the Carson's Bon Ton stores, but they had begun to move from the moderate priced product into better product, and we ended up being exited as a result. Given what's happened with the product, given the way the customer has responded to product, it's a moderate price traditional brand. The response by the consumer has been just phenomenal at retail. So Carson's is putting it back into all of its stores. That's 266 stores. Not only are they putting it back into all of their doors, but the businesses and the companies that we are in business with are beginning to give us more floor space and a bigger impact of the brand on the selling floor and making the investments in inventory accordingly. So as I said in our report, this will now become for 2010, we anticipate this being one of our brands' premier growth channels into 2010. So we're very excited about what's going on in the business.

Your next question comes from the line of Chi Lee – Morgan Stanley. Chi Lee – Morgan Stanley: As I look at your retail margin performance this quarter, can you guys break out what really drove, I believe it was, about a 350 basis point improvement in the margin this quarter, between what was really expense savings in gross margin?

I think, Chi, as we mentioned before, we've been investing in stores. They're impacted by the time of the rollout. As you point out, our revenue is up 10%; our operating margin is up over 65% operating profits. So, we're now at an operating margin of roughly 10% on the stores for the quarter on quarter basis. On a four-wall basis we add back the wholesale profits and also the admin expenses that we have. We're still targeting for the year a four-wall profit being around 20%. So for the quarter we're seeing that we are able to leverage infrastructure and in the investments year-over-year, and in terms of the growth, we plan to continue to drive to 20% plus, 23% growth. Chi Lee – Morgan Stanley: Now can you give us a little bit more detail in terms of what the gross margins sit within retail for the quarter?

The gross margins for our retail business are running just short of 70%, approximately 70%. Chi Lee – Morgan Stanley: But versus the year ago level?

We typically don't disclose that level of detail on this, but year-over-year the gross margins are somewhat comparable. Chi Lee – Morgan Stanley: Great.

Larry also indicated to me earlier that we've benefited from the revenue upside in our stores. And I think in constant currency basis are retail for this third quarter was up about 23%, is that correct?

Over 20%, yes.

Yes, so that helped us as well. Chi Lee – Morgan Stanley: Great, and then, Joe, just the comps up 10% October, can you talk about, regionally, where you're seeing the strength? I mean we've been hearing Europe was a little bit sluggish through a few of the summer months. Have you seen that trend reversed in October?

Yes, I really have. We've seen very positive results across the board. For October, Europe finished up about 7.5%. Asia, we're up almost 15% there. So we really feel good about both situations. Hong Kong, which had been a sluggish market for us is really one of the real weak links, we actually picked up 30% for the month of October in comparable store sales, so we're feeling good about things.

Your next question comes from the line of Omar Saad – Credit Suisse. Omar Saad – Credit Suisse: Wanted to go a little bit further on the international businesses and really focus on the two markets, Asia and Europe. It looked like Europe picked up a little bit on the constant currency basis whereas Asia might have slowed a little bit but got a lot more profitable. Can you help me kind of understand a little more of the underlying dynamics in those markets, what you're seeing from both kind of demand perspective and growth perspective in your business as well what's happening on the margin line there?

I think Europe's been very steady and if we look at our comparable store sales over the past four or five months, they've been in the mid to slightly high single digit area. So consistency jumps around by country a little but by and large, the revenue growth typically has been in the high 7% range. So we feel very good about the consistency there. In Asia, we've seen some inconsistencies. And I think some of this has to do with the way holidays fall. And so between Korea, China and Hong Kong we've seen some movement of holidays, the 60th anniversary of communism was a major event in both Beijing and Shanghai. So, that cost us quite a bit at the end of September. I believe now there's a good pent up demand, and in the month of October it was the best month we've had in 12 months. So we feel really good about that. Omar Saad – Credit Suisse: Great, and then just thinking about those kind of issues from a big picture perspective, I mean you mentioned earlier that international is now 61% of the business in the quarter. Do you expect this to accelerate over time the kind of mix shift away from the U.S. and overseas. How do you expect that dynamic to affect your profitability as that mix shift occurs?

Well, I think the 61% was higher than any quarter that we've experienced to date and it's not what we're projecting for an annual rate. So I think this is a one-off in the quarter. It had to do perhaps with doing less business in the United States than more internationally. We see the international business continuing to improve. The positive for us is that we are making more money in the U.S, that's a great thing, but the international business is the revenue driver and we're highly profitable there. So I think when you add up all those components, we're delivering on our strategic initiatives and we're growing our operating profit. And you know what we said our objectives at; we're now in the double-digit range and shooting for the low teens. We think that this strategy will get us there.

Your next question comes from the line of Eric Beder – Brean Murray, Carret & Co. Eric Beder – Brean Murray, Carret & Co.: Could you talk a little bit about in a domestic decline you talk about this membership club timing, how big of an effect was that in the Q3 results?

Eric, as roughly, in terms of the total membership, it was roughly a $4 million to $5 million dollar decline for the quarter. Eric Beder – Brean Murray, Carret & Co.: And if we go forward we are – you looking at 2010 and going forward where are you in terms of the international expanse opportunities? Where are your key focuses I guess for 2010?

Eric, I think they continue to be in Europe, Asia and Latin America. And I think the way we described it is 40% of the growth in new square footage would be in Europe, 40% in Asia and 20% in Latin America. Eric Beder – Brean Murray, Carret & Co.: And are you seeing any trends here in terms of rents or in terms of cost to expand that are changing kind of your thinking on the double-digit unit growth that you've been doing?

I think if you're thinking specifically about real estate and rents and availability, I think availability is probably a positive right now. And we are seeing things improve in that regard. In terms of the rents themselves, I wouldn't say we're seeing movement south but I think what we're seeing is flexibility and so that people are willing to listen, willing to negotiate. So that's a positive for us as well.

Your next question comes from the line of Sean Naughton – Piper Jaffray. Sean Naughton – Piper Jaffray: First on the SG&A line you had talked about $70 million in constant currency for the full year in terms of savings. You guys are obviously doing a great job on managing that line. Can you give us an update on how we should think about that for the full year?

Sure, basically as you know we had targeted $70 million in cost out of last year's actual spend. During the year, however, we started where we're planning to expand our retail roughly 100,000 square feet as you've heard Joe mention. We've now expanded that north of 120,000. So we are investing in what's called the SG&A primary selling expense in store in the rent expense. Offsetting that is the fact that the currency that we've been giving benefits net, not to cut to the chase, we're expecting SG&A on a reported basis to be around $70 million down full year despite the fact that we're adding over 120,000 square feet of retail. Sean Naughton – Piper Jaffray: And then on the gross margin front, you talked about that cost of goods was up 5% in the first half of the year but expected some reversal on that in the second half. Gross margins still coming under a little bit of pressure in the third quarter, obviously the comparison in the fourth gets much easier. How should we think about that in terms of the impact from FX and the potential cost savings for the fourth quarter?

Sure, as you know in our press release, our gross margin was unfavorably impacted by just over $21 million from currency, so currency continued to work against us. At this point as you know, for the fourth quarter currency should start to be a benefit. The fact is that most major currencies have appreciated versus the dollar which improves our result at current rates for the fourth quarter and beyond as well as well into 2010. In terms of the overall gross margin, yes there've been some pressures just in terms of the promotional environment that we've been in. We've been managing that, I think, very effectively. And finally in terms of cost of goods, I think we said that while we saw last summer when we were locking in goods for spring of 2009 on, we saw pricing pressure, and in the second half that that would reverse and bring us back to comparable levels to fall of 2008. And we definitely are seeing that as well. Sean Naughton – Piper Jaffray: Lastly on the retail business, obviously you guys are doing a nice job there with comps improving and 10% growth. Looks like the margin was down just a little bit in the quarter from Q2, are there some timing differences there, one. And then secondly what is the long term operating margin that you're expecting for that particular business?

Well, Sean, in terms of our margin, as I mentioned, where our revenues were up 10%, our profits were up over 65% year-over-year. Period-over-period [there is seasonality and the like], our revenues are still up I think close to 10% or double-digit and, as you said, just a tick, the difference in operating margins. So we're quite pleased. We looked at a store-by-store on an annualized basis, we still look at a four-wall profit that is going to achieve a 20% operating margin. That's, again, putting in the costs at FOB, not at wholesale transfer price that we reflect on our GAAP statements. And again, that's just looking at the four-wall excluding the admin to run the stores.

Sean, as we indicated to you in the past, as we transfer product from wholesale over to our retail stores, there is a cost to that that's imbedded in and it runs about 5%. So you could add 5% to the numbers that are reported, and on top of that we have a corporate overhead charge of another 4.5% or so. So taking those into considering we're right really where we want to be.

Your next question comes from the David Glick – Buckingham Research. David Glick – Buckingham Research: Joe, just a clarification on your guidance. You talked about the strength in October, I'm just wondering, I presume that your performance in October is factored into your implied fourth quarter outlook and annual outlook. But I just wondered what kind of assumptions you're factoring in for the balance of the year? And then I have a question for Larry on how we should think about the tax rate going into next year, should we think about it a little bit higher than it's been?

David, I think to answer the first part of that, yes October is factored into all of our beliefs moving forward. The only thing that we have not adjusted is the currency aspect, and we use the run rate for 10 months to apply it to the last two months. So there's probably a little bit of upside if the dollar stays where it is today. David Glick – Buckingham Research: I assume that your assumptions for November/December don't assume the same kind of run rate we saw in October?

It would be nice, but I don't think it would be very prudent for us to be planning at that level. David Glick – Buckingham Research: And then last question; based on these initiatives for spring in terms of new product in underwear and bras and exciting rollout at Bon-Ton in Chaps, I mean is it fair to say that we could see an increase in revenues in the U.S. business for the first half of next year?

I think, David, the thing to look at is we have just guided you to 2009 and constant currency. We're projecting an increase of 1 to 2%. So I think that given the state of the global economies over the last 12 months, the fact that Warnaco and our team could deliver on a positive constant growth is quite an accomplishment. I think as the dust settles and we move away from the difficulties that we've been living with for the last year, we feel very bullish about our growth opportunities moving forward. And I think that's the real story and we're going to get it from around the globe. David Glick – Buckingham Research: Including the U.S.?

As the U.S. improves, we will see our fair share of it. I think you've heard Frank talk about the Chaps initiative. Suddenly Chaps is going to be a revenue driver for Warnaco, and that's a real change. We'll have some one-offs, we'll have some pluses and minuses, but when you add it all up together I think we're positioned very, very positively for growth in 2010.

(Operator Instructions). Your next question comes from the line of Carla Casella – JP Morgan. Carla Casella – JP Morgan: Just a follow-up on your new product launches for the coming months and quarters, is that going to swing your ad spend cadence any differently this year than last? Is there any specific quarter where we should look to have increased ad spend that we didn't see a year ago?

It will swing the ad spend, but I would tell you what will happen is overall he ad spend on Calvin Klein underwear will actually increase. For the first time we have advertising campaigns planned on both men's and women's, men's in the first half and women's in the second half. So overall there will be a net increase in advertising spend.

Your next question comes from the line of Evren Kopelman – JP Morgan. Evren Kopelman – JP Morgan: My question is when we think about your international business longer term, as retail grows significantly given your square footage growth, how do you think about the wholesale business? What kind of growth rate do you expect and can you talk about merchandising as well between retail and wholesale?

Thankfully we've set our objective for the international businesses and totally retail, our retail initiative is to growth to 30% of our total revenue, and that's basically all international. So it is the big growth driver, it will be 50% of our total international business in three or four years. So that's a meaningful part of it. The reason behind that is that in certain geographies, the only way you can touch the customer is by being a retailer. So there is very little wholesale business to be had. And that's why we're growth as rapidly in certain geographies. In terms of the existing businesses in Western Europe where there is a significant wholesale business, we see that continuing to grow. There are pluses and minuses by market, but we see growth happening. And some of the launches that were talked about today, they've had tremendous success at wholesale as well at retail, and in our own stores we believe they will perform very well.

There are no further questions at this time, and we'll turn the call back over to Joseph Gromek for closing remarks.

Well we appreciate the time this morning and your thoughtful questions, and we look forward to chatting with you at year end.

This concludes today's conference call, you may now disconnect.