Emanuel Chirico - Chairman and Chief Executive Officer Dana M. Perlman - Senior Vice President of Business Development & Investor Relations and Treasurer

David J. Glick - The Buckingham Research Group Incorporated Omar Saad - ISI Group Inc., Research Division Christian Buss - Crédit Suisse AG, Research Division Erinn E. Murphy - Piper Jaffray Companies, Research Division Kate McShane - Citigroup Inc, Research Division Howard Tubin - RBC Capital Markets, LLC, Research Division David Weiner - Deutsche Bank AG, Research Division Jay Sole - Morgan Stanley, Research Division

Good morning, everyone, and welcome to the PVH Corp.'s Third Quarter 2013 Earnings Conference Call. This webcast is being recorded on behalf of PVH and consists of copyrighted material. It may not be recorded, rebroadcast or otherwise used without PVH's express written permission. Your participation in the question-and-answer session constitutes your consent to having any comments or statements you make appear on any transcript or replay of this call. The information being made available includes forward-looking statements that reflect PVH's view as of December 9, 2013, of future events and financial performance. These statements are subject to risks and uncertainties indicated in the company's SEC filings and Safe Harbor statement included in the third quarter press release. These risks and uncertainties include PVH's right to change its strategies, objectives, expectations and intentions and its need to use significant cash flow to service its debt obligations. Therefore, the company's future results of operations could differ materially from historical results or current expectations. PVH does not undertake any obligation to update publicly any forward-looking statements, including, without limitation, any estimate regarding revenue or earnings. Generally, the financial information and guidance provided is on a non-GAAP basis as defined under SEC rules. Reconciliations to GAAP are included in the third quarter earnings release, which can be found on www.pvh.com, and the company's current report on Form 8-K furnished to the SEC in connection with the release. At this time, I am pleased to turn the conference over to Mr. Manny Chirico, Chairman and CEO of PVH.

Thank you, Heather. Good morning, everyone. Joining me on the call this morning is Dana Perlman, our Treasurer and Head of Investor Relations. She'll be pinch-hitting for Mike Shaffer this morning, who is on a business trip. Ken Duane is also joining me, our CEO of our Heritage Brands, and responsible for all of our North American wholesale businesses. We were quite pleased with our results for the third quarter. We beat our third quarter revenue and earnings guidance. We saw a strong outperformance against our projections in both our Calvin Klein and Tommy Hilfiger businesses despite the overall promotional environment that we experienced in the quarter. Let me start with the Tommy Hilfiger businesses. The Tommy business continued its strong performance during the quarter, posting a 10% revenue increase. Revenues in North America were up about 10%, driven by strong performance at both retail and wholesale. Our retail business showed a 3% comp store increase, while we grew square footage in the high single-digit range. Our wholesale business has posted strong double-digit sales increases. Internationally, revenues are up 11% for the quarter. Strong wholesale and retail revenue growth in Europe was partially offset by the continued weakness in our business in Japan. Our retail comp store sales in Europe posted a 4% increase in the quarter, while our European wholesale revenues recorded a double-digit revenue increase in the quarter. Operating income for the Tommy Hilfiger business grew 6% in the quarter. The sales outperformance in our North America and Europe businesses was partially offset by the continued weak performance in Japan, coupled with gross margin pressure caused by a higher promotional selling environment in order to drive traffic. Moving to our Heritage businesses. Sales and earnings for our wholesale Heritage businesses came in on plan for the third quarter. The performance in our retail Heritage businesses for the third quarter was disappointing. Comp store sales were minus 3% and were particularly weak in the Bass division, which we sold on the first day of the fourth quarter of this fiscal year. Operating earnings were down in the quarter and were negatively impacted by increased markdowns and promotional markdowns in order to drive sales and keep inventories clean. Moving to our Calvin Klein businesses. All of our Calvin Klein businesses exceeded our sales and earnings estimates in the quarter. We posted strong sales gains and higher-than-estimated operating income. By region, we saw the strongest results in South America, Asia and North America, while our European business continued to underperform. In our South America business, we had a very strong business, particularly in Brazil, where we continued to see sales growth of about 10%, driven by the performance of the Calvin Klein Jeans business. Comp store sales were up about 5% in the third quarter. Our order book for the fourth quarter is also running up about 10%. So there continues to be good momentum in Latin America. Asia, overall comps in our Asia business were up about 1% for the quarter. We saw strong sales in China and Southeast Asia, where comp sales were up about 5%. The only difficult market in Asia continues to be Korea, where comp store sales trends have improved somewhat running down minus 5% in the quarter. As I said, our European Calvin Klein business continued to be under pressure, particularly the jeans component of that business. Comp store sales came in at minus 5% in Europe, and margins were impacted by markdowns in order to move through goods and position the business properly for the new spring deliveries that we have a lot of optimism about as we go forward. In North America, our Calvin business continued to perform strongly across all product categories with the exception of jeans. We have seen very strong performance in our wholesale men's sportswear and our men's and women's underwear businesses. In addition, our North American retail business posted a 3% comp store sales increase and higher operating margins due to better sell-throughs and higher average unit retails. The Calvin Klein Jeans business in North America, as well as Europe, continues to be the only difficult business within the Calvin Klein franchise. We have planned these businesses down mid-single digits and are anticipating a continued pressure on margin in order to move through goods. In the licensing area, ongoing royalty revenues were up 15% in the quarter due to the strength in our global handbags and accessory businesses, and our women's apparel businesses, which are operated by G-III in North America and Club 21 in Asia. Let me speak a little bit about fourth quarter holiday sales trends. In the fourth quarter, our sales to date are on plan globally. In North America, we continue to see low-single-digit comp store increases with Tommy and Calvin, while our Heritage business continues to post mid-single-digit negative comps. Internationally, our Calvin businesses in Asia and Latin America continue the strong sales trends we saw in the third quarter, while our CK Europe business continues to underperform. The Tommy Hilfiger Europe comp store sales trends also continue at positive mid-single-digit rates. As we've previously mentioned to you, our Tommy Hilfiger European spring order book is projected to be up 1% for the spring 2014 season. The spring wholesale season begins to ship in December and that is all anticipated in our fourth quarter guidance. From a margin perspective, the global environment has been more promotional to date than last year's fourth quarter. We have been cautious with our projections and are planning for the promotional environment to continue throughout the fourth quarter. Just to give you a quick update on the integration of the Warnaco businesses into PVH. We continue to review our plans and are on track with all our processes and conversions. Over the last 3 months, we have successfully converted a number of systems in North America, as well as Europe. We also made strong strides in our merchandise planning systems throughout Asia. There have been no surprises in this area since the last time we updated you, and we are very comfortable with our integration time line. We are also comfortable with our projected expense synergies, and they continue to be on track. From a people perspective, we have our senior management teams in place across the globe and have had some key hirings across the globe with the announcement of the new Calvin Klein President in both Europe and Asia. And with that, I'm going to turn it over to Dana to quantify some of the fourth quarter trends. Dana M. Perlman: Thanks, Manny. The comments I'm about to make are based on non-GAAP results and are reconciled in our press release. Revenues for the third quarter were $2.259 billion, a 38% increase or $616 million increase over the prior year. Driving our revenue increase over the prior year was the Warnaco acquisition, which accounted for approximately $503 million, our Tommy Hilfiger business, which increased $87 million or 10%, and the pre-acquisition Calvin Klein businesses, which increased $55 million or 19%. Overall, our pre-acquisition Heritage business was down to the prior year, as our ongoing wholesale businesses performed well for the quarter but was offset by a continued disappointing performance in our Bass and Izod retail businesses, in addition to the loss of sales from exiting the Izod women's wholesale business. As a reminder, we sold the Bass business the first day of the fourth quarter. Versus our guidance, revenues were up as a result of strong performance in Calvin Klein North America, China and Brazil businesses, coupled with strong revenue growth in our Tommy Hilfiger North American and European wholesale businesses. Our earnings per share for the third quarter was $2.30 as compared to our previous guidance of $2.25. Driving the earnings per share beat was a revenue increase which was slightly better than planned. Our revenues for 2013 are projected at $8.24 billion. Calvin Klein revenues are planned at approximately $2.79 billion. Tommy Hilfiger revenues are planned at approximately $3.44 billion, up around 7% to the prior year. Our Heritage revenues are planned at about $2.01 billion. Year-over-year comparisons for our Calvin Klein and Heritage Brands revenue are significantly impacted by both the Warnaco acquisition, as well as the sale of Bass. I wanted to put some color around our 2013 operating margins for the company and our individual businesses. Operating margin for the year is expected to be approximately 11.8%, a 60-basis-points reduction to 2012. Driving this overall reduction is a switch from running a licensing model to direct operations for our Calvin Klein jeans and underwear businesses, combined with our expenses associated with rebuilding and investing in our acquired Warnaco businesses. For the year, we're projecting our Calvin Klein operating margin to be approximately 15%; Tommy Hilfiger operating margins are planned at approximately 14%; and our Heritage Brands operating margin will be approximately 8%. We are planning the full year tax rate at approximately 26%, and full year interest expense at approximately $190 million. For the fourth quarter, we're projecting revenues at approximately $2.08 billion, with earnings before interest and taxes in dollars planned to increase in excess of 15%, and earnings per share for the quarter of $1.40. When comparing to the prior year, earnings per share for the fourth quarter is impacted negatively by approximately $0.10 due to the loss of the 53rd week and the calendar shift associated with this lost week, coupled with a $0.10 decline due to an increase in the tax rate over the prior year. Lastly, we have raised our debt paydown estimate by approximately $50 million from our previous guidance to $450 million for the year. And with that, I'll turn it over for questions. Operator?

[Operator Instructions] We'll take our next question from David Glick from Buckingham. David J. Glick - The Buckingham Research Group Incorporated: Manny, just a follow-up on the Warnaco acquisition and the potential shareholder value creation from that deal. It sounds like it's very much on track from a systems and a people perspective, and making some progress on the product. Obviously, when you guys gave the 15% to 20% sort of forward-looking growth goals in terms of EPS, the environment was different than it is today. You made some references in your press release about investments in 2014, which you certainly had already planned to make. I don't know if there are any incremental investments. But I'm just wondering how you're thinking about 2014 relative to '13 as a sort of a transition year? Is there a point next year where you can start to make some progress and grow within that range, perhaps in the second half of the year? I just want to know how you're thinking about it today and whether that's changed at all.

Sure, thanks, Dave. I think you have to think about it in a couple of ways. On the investment spending side, or rebuilding the jeans and the underwear business, the infrastructure and people point of view, a lot of those expenses are going into the third -- those investment spending, hiring of people, is happening in the third and fourth quarter of this year and will continue into next year. So we're going to have to deal, with -- particularly in the first half of next year, with some of the annualization of that expense. We're also making investments from a shop and a presentation at retail point of view. The plan to do that is in coordination with the new product that's being shifting into 2014. So some of that expense starting a little bit in the fourth quarter of this year, really gearing up into the first half of next year and then annualizing as we go forward. So really trying to make those investments at retail. At the same time, we're going -- as we feel very good about the kind of sales reception that we've gotten with our wholesale customers both in North America and Europe, with our regular accounts in department stores, we're also cleaning up and rationalizing the off-price distribution that we've talked about that was just, it was just overweighted in both jeans and underwear. So bringing balance to that in North America, the United States, Canada and Mexico, doing the same in Europe to get that right, while we're growing the regular price business. So we're not seeing -- we're seeing some really strong increases in sales from a regular price point of view, but at the same time, we are reducing pretty profitable sales that are going into the off-price channel or the warehouse club channel. And then just to continue with some of the issues that 2014 is dealing with, we're dealing with the dilution impact of Bass, which will happen next year, it's worth about $0.15 a share, and the Tommy Hilfiger European spring order book, as I mentioned in my comments, is up about 1%. We expect the fall book to be stronger as the second half of the wholesale business in 2013 has shown some strength. So all that put into balance, I think, to amplify your question, is we're really seeing next year being a tale of 2 halves. We think the first half will continue to be an investment and transition point of view, integrating the Warnaco business. And we'll start to really see some more improvement in second half of the year, particularly with the new fall product in jeans and in underwear that is being presented to the market as we speak and goes on sale now into January, February. We'll have a better sense of how that order book shapes up when we discuss year-end results in March. So I think we are well positioned. The integration continues to move well. We still feel very strongly about how the growth will come together in the Calvin business long-term, into the second half of 2014 and beyond. But the first half of the year, I think, will put pressure on our earnings as we continue to make these investments to rightsize the business from a distribution point of view and also make the appropriate investments in the business.

[Operator Instructions] We'll take our next question from Omar Saad from ISI Group. Omar Saad - ISI Group Inc., Research Division: So can you talk -- there has been some management changes since the last time, your last conference call, Fred Gehring is stepping into a little bit of a new role. Can you talk about where the management stands today? It sounds like you feel like you're in pretty good shape, the roles of the key different leaders, and maybe also just if you could extrapolate and talk a little bit more about Fred's new role.

Sure. Thanks, Omar. I think, just to clarify, first and foremost, Fred's role, and I'll talk about some of the other positions then. Fred will be working full-time throughout 2014. So his transition out of -- from CEO of the Tommy business and our European business and our International PVH business will really take place in the second half of next year, end of the third quarter, beginning of the fourth quarter is the kind of plan that we've talked about. But even when that occurs, he'll still be working full-time through 2014. The plan is that in -- beginning of 2015, he'll transition to a 50% role; become Chairman, really be available from a strategic planning point of view from the business both Tommy and in the overall PVH business, will continue to be a Director of the company and be Vice Chairman of -- become Vice Chairman of PVH. So still a very active role, still very much involved in the business and in developing the strategy, as we go forward. In the Tommy business, Daniel Grieder, who's been with us for over 10 years, has been with the Tommy Hilfiger brand, and has been the CEO in Europe operating the business for Tommy, both for Calvin and Tommy, will now move into the global role for Tommy Hilfiger worldwide. And I think that's just a natural transition that's been planned for, for a number of years. We've just tried to be as transparent about that transition as possible, but it's really been something that's been on the table for the last 3 years. And it was discussed as part of our acquisition plan that after 3 or 4 years that Fred would transition into more of a role as we go forward -- more of a strategic role and Daniel would step into the CEO role. So I don't think a transition could be better orchestrated than we've had there. We also announced that Tom Murry will be staying through the next 3 fiscal years, this year and the next 2, as CEO of Calvin Klein. And then he will, during that period of time, provide a transition as we go forward and will step into a chairmanship role for a period of time as the Chairman of Calvin Klein. So I think we have that key position covered as we go forward from a succession planning point of view. And then the 2 key positions that we really -- that we filled over the last couple of months have been the President of the Calvin Klein Europe business, which is Iris Epple, which is an internal promotion from our Tommy business. Iris has been with us for over 10 years. She's been a key player throughout the Tommy development, so we think she's a natural to step into the presidency role in Europe. And then Frank Cancelloni comes to us from the Lacoste group with 20 years of experience in Asia as the President of the Calvin Klein Asia group. So we think that positions us very well. So we feel really good about how we're positioned now, some of the key hires that are in place, and I think it is very much on plan, and we think it's really going to help our execution going forward. Omar Saad - ISI Group Inc., Research Division: That's really a helpful explanation, Manny. And then if I could ask quickly on the -- your commentary about the tale of 2 halves for next year and the investments necessary to continue to position the Calvin Klein brand and the Warnaco integration. How much of this is functions and processes that were never in place, and then how much of this would you say is, you mentioned rightsizing the distribution, are there a lot of Calvin Klein stores that Warnaco opened that you need to get out of, things like that, of that nature?

Yes, I think -- let me take the second one first. The first part is about distribution. We talked about it. In Europe and in North America, in those 2 markets, the jeans and underwear, the distribution was skewed above 50% into the off-price and club channel, and that just has to change. None of our other Calvin businesses are anywhere near those percentages, usually half at most in some of those markets. So our plan is over a couple of year period, to rightsize that. A combination of shrinking some of that distribution and, more importantly, growing the regular distribution of jeans throughout Europe and North America. And I think both of those are under way, that I'm very satisfied with what's going on. We've also, in Europe in particular, have targeted to close 15 to 20 stores. 15 will close by the end of 2013 and another 5 to 7 closing in 2014. Those are unprofitable doors that are really closing the end of this year into next year. So I think that will also be a positive as we go forward. As far as -- some of these investments are by choice -- our choice to do what's right for the business. And I would just say in the -- I guess I would describe it as in the zeal to deliver earnings growth, there were areas that just were under-invested from when Warnaco operated the businesses. Marketing being a key place and people the other place. And we just feel so strongly that these are the 2 largest apparel categories that we operate, jeans and underwear. And that the growth prospects are so strong here that to continue to starve them for talent and marketing dollars is a major mistake. So there, we're clearly making those investments. And when I say marketing dollars, it's not advertising in glossy magazines. This is at point of sale, this is investments in shops and presentation. This is investments in signage at point of sale, that we put up once a year when all of our competitors are doing at least 4x a year. It's about making the investments in people at the store level, merchandise coordinated with sales support. Those programs were eliminated for jeans and underwear, where we have significant programs in all of our sportswear businesses throughout Tommy and Calvin businesses that we operated directly. So reinstating those were critical, we feel, for the right presentation of the brand and in order to meet the competition head-on and to take back our market leadership position in jeans and to grow our market leadership position in underwear.

And we'll take our next question from Christian Buss from Credit Suisse. Christian Buss - Crédit Suisse AG, Research Division: I was wondering if you could talk a little bit about where you are from a systems integration standpoint from the former Warnaco business? And any time line for any major changeovers would be helpful.

Sure. North America will be completed in the -- Calvin Klein will be completed the end of the fourth quarter this year. The rest of the Heritage North American businesses will be completed by the first quarter of 2014. The European business is completely converted systemically, and all the processes and integrations will be completely consolidated by the end of the fourth quarter. The plan for Asia is to begin the transition country-by-country beginning in 2014. That should be completed by the first quarter of 2015. And then Latin America will follow second half of 2014, first half of 2015. So we feel pretty good about how all that is moving and don't see any major issues. The warehouse distribution in North America will be completed by, for Calvin, in the fourth quarter, and the first quarter of '14 for 2014 for Heritage in North America, and Europe is already complete. Christian Buss - Crédit Suisse AG, Research Division: That's very helpful. And how are we feeling about the $100 million cost savings target or synergies target?

We are on track to what we said back 6 months ago, and there's been no change to that.

We'll take our next question from Erinn Murphy from Piper Jaffray. Erinn E. Murphy - Piper Jaffray Companies, Research Division: Just 2 questions for you, Manny. One, how are you feeling about inventory in the channel in Europe? I mean, it clearly is very promotional there, but it sounds like you guys have been actually converting with your European wholesale business up double-digits. Can you just speak a little bit more about what you're seeing there in the channel? And then just secondly, structurally, is there any reason, if you think about Tommy Hilfiger's International business, why the margins over time shouldn't be higher than North America? Could you just help us kind of think through some of different puts and takes there?

I think, Erinn, the -- let me take the last part first. On the margin question, European margins are slightly higher than the U.S. margins. What you see is the International margins, and that's being taken down probably almost 200 basis points or more, slightly more than that, by the business in Japan, which is just marginally profitable. So $250 million, $270 million business in Japan, marginally profitable, showing that the International segment of Tommy is slightly, I think, 50 basis points below. Don't hold me to that number, but obviously, you have it in front of you as you asked the question. So I think that's what's really driving the change. I think the International business should operate at a level that's comparable to the North America business. We really just -- we've surprised ourselves to some degree how strong North America has been and will -- and feel strongly that Europe will continue to be at that level as well, and moving the Japan business forward is key for us from that point of view. And I think the inventory and the channel at -- in Europe, let me take our inventory first. We're moving through it very quickly. As you can see from our comp store performance in our own stores, both regular price, the Internet, as well as our outlet business, we're moving through goods, so there will be no inventory hangover at the end of the year at the Tommy Hilfiger business or the Calvin Klein business. That business -- any issues in Calvin are clearly being moved out, and Tommy is just naturally selling through it as planned. In the channel, I think it's really a country-by-country story. And I guess I'll just fall back on I think the channel is very clean in Northern, Central Europe for the most part, and continues to be a challenge in Southern Europe, particularly Italy. We're starting to see some leveling off in Spain. And we are even hopeful that as we get into the second half of next year that we can -- we will see our wholesale business in Spain actually up positively. But the real challenge will continue to be Italy, which we don't see any real change in that consumer pattern. We continue to be very rigorous on our accounts and our payment terms, so we've been rationalizing down some of our account base as some of the smaller retailers were just concerned about getting paid, so that's put more pressure on the Italian business. So Italy continues to be a major problem for us and, I think, everyone going forward. But the rest of Europe, I think relatively speaking, I think moving through units, but probably with margin pressure, as people have hit the sales button this year, I think, as much as 4 to 6 weeks earlier than they had last year. I hope that's helpful. Erinn E. Murphy - Piper Jaffray Companies, Research Division: That is. And just a follow-up on that, I mean, I think you alluded to this in the text. But I mean if the sell-through rates are pretty strong in Europe right now, your inventory, specifically yours, will be lean by the end of this year. That should be very favorable for building back into a stronger backlog as we think of fall for next year. Is that -- are we thinking about that correct?

Absolutely, I think that's really true. I mean, we pride ourselves in getting whatever inventory issues are behind us. And I think that's clearly the case here, and we really tried to move very quickly in Calvin to try and get that position, that inventory position, and work through some significant amount of aged inventory that was there. The Tommy business really hasn't experienced what I would call an inventory issue. It's just been a promotional environment that competitively been required to be -- to break price a little quicker than we had hoped, and that's put some pressure on margins. So I really don't think it's going to be a unit issue at all. As we get through spring, I think if selling continues the way we see it now, I think we'd be very well positioned coming out of this fiscal year and as we transition spring.

[Operator Instructions] And we'll take our next question from Kate McShane from Citi. Kate McShane - Citigroup Inc, Research Division: I just wanted to ask a little bit more about the promotional environment domestically, especially around the holiday season. Are you seeing categories that are more promotional than others? And with the markdowns being greater year-over-year, how do you view the full-price sales business going forward after such a highly promotional season?

Well, I guess I would characterize the -- I talked about the promotional environment -- by category, specifically where we play, I would say the jeans category in general has been and continues to be one of the most promotional categories that we see, both in North America, and in Asia and in Europe as well. So I just think that category, from a fashion point of view, has had its pressures. I think we've talked about that in Asia, particularly in China, that denim has -- inventories have built up and everyone's moving through them. And I think some of our competitors have spoken about that. And I think it's -- that's the category that we see the most pressure under where we are. I think sportswear, men's generally is pretty good. I think when most retailers are talking about their businesses, the men's sportswear category is one that, both from a sales and a margin point of view, continues to perform. And we've seen it, particularly in the Calvin businesses and the Tommy business, that, that continues to be the shape. Dress furnishings, the margin pressure there has been less, given the type of category it's in, to replenishment. The sales trends have been good. I wouldn't say great, they've been good, but nothing that's been at all of an issue. And obviously, outerwear has been just very strong both as a category and as part of the collection sportswear business, given the weather patterns versus last year, that's been very positive. So just to put a little color on it. I think the real challenge at -- with the holiday season is been the calendar, to a degree, it's been the consumer patterns and just the choppiness, and in order to just drive sales at a level, I think everyone has had to be more promotional than originally planned. It doesn't make it a disaster at all, it's just putting more pressure on it. And the calendar, to be very honest, is just -- it's hard to read. Here we are 1.5 weeks past Thanksgiving, but closer to Christmas, with less shopping days, and we're expecting it to really build and to build late, and traffic's been up and down across the board. So it's been erratic, and that's been the hardest part of trying to plan the business.

And we'll take our next question from Howard Tubin from RBC Capital Markets. Howard Tubin - RBC Capital Markets, LLC, Research Division: Manny, maybe just a follow-up on inventory. Your comment, does that apply to North American and the U.S. as well? Do you feel equally as good about your inventories, and inventory in the channel, in North America?

Yes, very much so. It's -- I hope I was clear. Yes, very, very much, the inventories are clean. We've been very aggressive across the board moving through goods. And we've been aggressive on even from a promotion point of view in keeping moving. February 1, as we turn, we'll be very clean coming out of the year.

And we'll take our next question from Dave Weiner from Deutsche Bank. David Weiner - Deutsche Bank AG, Research Division: So just 2 quick questions. One, Manny, a follow-up to a point you made earlier about a tale of 2 halves, incremental investments, particularly in the first half. I think you made a comment that, that will drive incremental, relative earnings pressure. I guess I wanted to just clarify, when you said earnings pressure, were you just saying relative to some positive run rate, like 15% [ph] down?

Look, we are not giving guidance. I'm saying the first half will be under pressure. I'm not saying at this point whether it will be plus or minus from where we were last year. But clearly, it will be a second half story, not a first half story. I just think it's premature to start getting into 2014 when we just can't get through, when we're still fighting our way through the holiday season in 2013. But I think, clearly, the first half of the year has got significant pressure ahead of us. So given the kind of investments we are making and the kind of pressure we're seeing in Europe on the wholesale channel. So I think that's where we are.

[Operator Instructions] We'll take our next question from Kimberly Greenberger from Morgan Stanley. Jay Sole - Morgan Stanley, Research Division: This is Jay Sole, on for Kimberly. The North American comps look solid in what's, obviously, has been a very tough environment. Can you talk about what categories and styles are working best for Tommy Hilfiger and Calvin Klein?

Sure. I will -- let me -- if I could just categorize, I'm not at all downplaying that our strong comps, our strong comps, our comps in the third quarter, which were up 3% and 4%, were relatively good from the outside performance. But if you compare that to where we were in the first half of the year, we were riding much more in the high single-digit range, 8%, 9%. So as much as we've been on plan, it's still been a deceleration from what we saw early on in fiscal 2013. And it's come with more promotion than we would have liked, putting some pressure on margin. So -- and again, I think I really touched on it, I would say to you the categories that are really working well for us are men's sportswear across-the-board, both Tommy and Calvin, our outerwear businesses or anything that's really cold weather are very strong, in some ways we wish we had more. And the most difficult businesses we really are struggling with is our denim category, which is 15% to 20% of our business. So with all of those -- with those positives, are offsetting a pretty large negative comp in our denim business. And then obviously, not obviously, but accessories in our own stores just very, very strong as we go forward. Handbags, particularly in Calvin, continue to put up double-digit comp store increases. Jay Sole - Morgan Stanley, Research Division: Okay, great. And then if I could just ask one other. What's driving the continued Calvin Klein strength in Asia and Brazil?

Well, look, I think there is the brand is just very, very well positioned in the market. It's always been a growth channel for us. Brazil is just -- I think the brand is very -- it resonates with that consumer. We're starting to expand the jean categories in 2014 to include more sportswear. And I think that's been a real positive in Latin America. In Asia, the growth vehicle has been really China, and as happy as we are with the business that we are comping positive, it's still a deceleration from where it was at the beginning of the year and where it was last year. So from that point of view, I think we feel good about it, but we would like to get back on to that higher growth rate, which was, instead of comping 4%, 5%, was comping closer to 9%, 10%. So again, we see the deceleration of the business as everyone has from that point of view.

[Operator Instructions]

Okay, I guess that will wrap it up for the call. We appreciate you joining us. We wish you a very happy and healthy new year and Christmas as you go forward, and we look forward to speaking to you in March of 2014. A happy new year and healthy to everyone. Thank you.

This concludes today's conference. Thank you for your participation.