Andrea Shaw Resnick - Senior Vice President of Investor Relations & Corporate Communications Lew Frankfort - Chairman and Chief Executive Officer Michael D. Tucci - President of North American Group Jane Nielsen - Chief Financial Officer, Chief Accounting Officer and Executive Vice President Victor Luis - President of Coach Retail International Jerry Stritzke - President and Chief Operating Officer

Kimberly C. Greenberger - Morgan Stanley, Research Division Brian J. Tunick - JP Morgan Chase & Co, Research Division Edward J. Yruma - KeyBanc Capital Markets Inc., Research Division Barbara Wyckoff - Credit Agricole Securities (USA) Inc., Research Division Tracy Kogan - Nomura Securities Co. Ltd., Research Division Omar Saad - ISI Group Inc., Research Division Jessica Schoen - Barclays Capital, Research Division Lizabeth Dunn - Macquarie Research David J. Glick - The Buckingham Research Group Incorporated Erika K. Maschmeyer - Robert W. Baird & Co. Incorporated, Research Division Jennifer M. Davis - Lazard Capital Markets LLC, Research Division Neely J.N. Tamminga - Piper Jaffray Companies, Research Division Michael Binetti - UBS Investment Bank, Research Division

Good day, and welcome to the Coach Conference Call. Today's call is being recorded. At this time, for opening remarks and introductions, I'd like to turn the call over to Senior Vice President of Investor Relations and Corporate Communications at Coach, Ms. Andrea Shaw Resnick. You may begin.

Good morning, and thank you for joining us. With me today to discuss our quarterly results are Lew Frankfort, Coach's Chairman and CEO; and Jane Nielsen, Coach's CFO. Mike Tucci, North American Group President is also joining us for a holiday preview. Before we begin, we must point out that this conference call will involve certain forward-looking statements, including projections for our business in the current or future quarters or fiscal years. These statements are based upon a number of continuing assumptions. Future results may differ materially from our current expectations based upon risks and uncertainties such as expected economic trends or our ability to anticipate consumer preferences. Please refer to our latest annual report on Form 10-K for a complete list of these risk factors. Also, please note that the historical growth trends may not be indicative of future growth. Now let me outline the speakers and topics for this conference call. Lew Frankfort will provide an overall summary of our first fiscal quarter 2013 results and will also discuss our program -- progress on global initiatives. Mike Tucci will review our key programs for the holiday season. Jane Nielsen will conclude with details on financial and operational highlights for the quarter. Following that, we will hold a question-and-answer session where we will be joined by Victor Luis, International Group President; and Jerry Stritzke, our President and Chief Operating Officer. The Q&A session will end shortly before 9:30 a.m. We will then conclude with some brief summary comments. I'd now like to introduce Lew Frankfort, Coach's Chairman and CEO.

Good morning. Thanks, Andrea, and welcome, everyone. As we noted in our press release, we were pleased with our results this quarter highlighted by double-digit top line growth with strong comparable store sales most notably in North America and China. We continue to make progress against our strategic initiatives, enhancing our leadership position in the North American women's bag and accessory category through fashion innovation, aggressively growing our international business, becoming a market leader in the Men's accessories category and harnessing the power of the digital world. In addition, during the quarter, we completed the acquisition of our domestic distributors in Korea and Malaysia, and reflective of our strong balance sheet and positive outlook, our board has just authorized a new $1.5 billion stock repurchase authorization. While I will get into further detail about current conditions and the outlook for our business shortly, I did want to take the time to review our quarter first. Some highlights were: First, net sales totaled $1.16 billion versus $1.05 billion a year ago, an increase of 11%; Second, earnings per share totaled $0.77, up 6% from prior year; Third, North American sales increased 8% to $784 million from $729 million last year, with direct sales up 11% on a 5.5% comparable store sales increase; And fourth, international sales increased 15% to $362 million from $314 million last year, driven in part by a nearly 40% gain in sales in China with a continuation of double-digit comps. Looking first at global distribution. During the quarter, we opened 5 North American factory stores, including 3 Men's stores. At the end of the period, there were 354 full price and 174 factory stores in operation in North America. Moving on to China. During the quarter, we opened 8 net new locations, 1 in Hong Kong and the remainder on the Mainland, bringing the total number to 104 locations, including 86 on the Mainland in 38 cities. In the wake of our recent Asia distributor acquisition and including Singapore and Taiwan, which we took over last year, we now directly operate 92 locations in Asia, not including Japan and China. They include: 7 in Singapore, 10 in Malaysia, 27 in Taiwan and 48 in Korea. And in Japan, one Men's factory store was opened. At quarter end, there were 188 total locations in Japan with 23 stand-alone full price stores, including 8 flagships, 122 shop-in-shops, 36 factory stores and 7 distributor operated wholesale location. Moving on to sales and productivity and starting in North America, which today represents about 2/3 of Coach's sales. Our total revenues in North America rose 8% for the quarter, with our directly operated businesses up 11%. As noted, total Q1 same-store sales rose 5.5%, with our factory store comps benefiting from a return to more promotional in-store practices and our full price store comp similar to prior quarter trends. Of course, our Internet business, driven by significant traffic gains, continued to drive overall comp. In department stores, sales trends at POS was essentially even with prior year, while shipments into department stores declined as inventories were planned lower. Overall, we estimate that addressable women's North American handbag and accessory category rose about 10% last quarter. At the same time, in our own North American stores and on the Internet, Coach's sales rose 11%. It's worth noting that our Men's business was also a significant driver of our overall sales growth in Q1. Moving on to international sales, which represent about 1/3 of Coach total sales today. They rose 15% in the first quarter. China sales rose nearly 40% from prior year, fueled by distribution and double-digit same-store sales. Clearly, the Chinese consumer has embraced Coach as evidenced by these results as well as the increasing contribution of the Chinese tourists to our global sales in the extremely high purchase -- repurchase intent among existing consumers. Our other Asia direct businesses outside of China and Japan, Singapore, Taiwan, Malaysia and Korea, also posted strong aggregate growth in the quarter. In part, these countries benefited from the retail step-up from prior year except for Singapore, which was purchased at the beginning of last fiscal year. In addition, their combined POS sales also rose at a double-digit rate. In Japan, we posted a 1% increase in constant currency, while sales in dollars were even with prior year. Coach holds a #2 place within the Japanese imported accessories market with a 17% yen share. Our position reflects the strength and relevance of the Coach brand with the Japanese consumer who has become increasingly value oriented. Finally, I would like to touch on our international wholesale business where we experienced strong shipment growth, as retail sales gains were driven by distribution expansion. While Jane will get into more detail in our financials and I will discuss our outlook in some detail shortly, I did want to give you this recap. As you know, Mike Tucci has joined us today to discuss our product performance for the first quarter as well as our holiday sales initiative. Mike? Michael D. Tucci: Thanks, Lew. During the first quarter, we featured a high level of product innovation and distinctive newness, driven by our Legacy launch. We were very pleased by the excellent response to the collection, as Legacy proved to resonate with consumers across geographies and demographic. Inspired by our archives and featuring the duffle and Candace carryall style, Legacy underscores our heritage as an authentic leather goods brand, distinctively Coach and differentiated in the marketplace. While Madison and Poppy remained important collections during the quarter, we continue to build our Legacy momentum over the next several months. Additional seasonal offerings such as cold weather and outerwear are being introduced this quarter, along with new brights, novelty elements such as Ocelot haircalf and colorblock. Of course, we're supporting the collection with innovative marketing programs like our just launched Grand Central takeover here in New York, with 84 Coach images focused on the northeast corridor of the station over a 4-week period. We're also taking over buses and telephone kiosks in both New York and Chicago during fall and holiday. Additionally, our recently updated Madison collection featured new silhouettes, including the Juliette satchel and the new carryall, which we'll deliver in early December. New Poppy will arrive just in time for holiday and will feature our much-loved iconic Willis bag in beautiful colors, colorblock and a range of great sizes and shapes. And of course, we'll also have a comprehensive assortment of great gifts from tech accessories to wristlets and a wide range of items under $100 as well. In addition, our holiday product will be supported by a comprehensive marketing plan beginning in mid-November, featuring a powerful gifting message. The emphasis of our marketing will be product and item-driven across our core categories and other gifting ideas. Our campaign will span coach.com, social and media advertising and compelling print and in-store marketing to drive traffic. And our PR team working in conjunction with several of today's leading style authorities has developed a series of digitally-based initiatives centered around their favorite picks for holiday. Additionally, each of these style icons will curate a designated shop of their holiday selection on coach.com. I'd like to provide an update on our Men's growth strategy, which is a significant opportunity for Coach, both here in North America where we have a long history as a men’s leather goods resource and globally, where the category is more developed. During the last quarter, we added a broader assortment of Men's to an additional 14 full price stores in North America, taking us to over 100 stores with a significant Men's presence by the end of September. We're seeing excellent response to our product both in these retail stores and in our dedicated factory stores. Coach is rapidly becoming a leading brand authority in Men's bags and accessories. As we created the world of Coach for women across categories, we are now doing the same for men, designing collections with a distinct point of view, but sharing the modern classic aesthetic that is the hallmark of Coach. Moving to our stores. As part of our brand-building initiative, there's an opportunity both in our full price and factory stores to continue to elevate our store environment and to present a broader expression of Coach to our consumers. During the first quarter, to support Legacy, we rolled out new visual merchandising elements to about 100 retail stores and several key U.S. department store doors as well. These stores outperformed during the quarter, and we will continue to push these enhancements to more stores over the fiscal year. We've also experienced excellent customer response to our new 625 North Michigan Avenue flagship store in Chicago, which represents a new evolution of our retail concept and our new dual-gender, side-by-side concept store in Pentagon City Centre. And just last week, we opened our first North America department store concession shop at Macy's Herald Square here in New York City. Designed by renowned architect Rem Koolhaas, this flagship space reflects our newest and most modern design elements, including video and digital content that provides an elevated environment to showcase our products and enhance the Coach experience within a department store. On the factory side, our store elevation and enhancement strategy was piloted in our Riverhead and Woodbury Common stores with excellent results. We will roll this program out to about 25 of our highest volume stores by mid-November prior to our peak holiday selling season. In summary, we will continue to drive our women's business through fashion innovation, leverage the opportunity in Men's and evolve our store and digital concepts to provide a brand-right shopping experience for our consumer wherever she chooses to shop. With that, I'll turn it back to Lew for a discussion of our strategy and further opportunities for growth. Lew?

Thanks, Mike. Mike just discussed a number of our brand building and productivity initiatives, which will be a significant contributor to top line sales in the seasons and years ahead, both in North America and in international markets. Looking towards the balance of FY '13, our overarching strategies remain largely unchanged. First, we're leveraging the global opportunity by aggressively growing our international businesses through both distribution expansion and productivity gains. Second, we're continuing to enhance our leadership position in the North American women's bag and accessory market, as we strengthen our position in lifestyle categories such as footwear. Third, we're tapping into the large and rapidly growing Men's accessory category, which Mike has already discussed. And fourth, we're harnessing the growing power of the digital world. Starting with distribution. First, as our plans haven't changed materially from what we outlined on the July earnings call, I will be brief. To start, we expected our square footage globally and across all channels will increase about 10% or 11% during this year. In North America, we now expect to add about 25 net new stores, including 20 factory stores, of which 10 will be Men's stand-alone location. Turning to international and starting with China, we again expect to open about 30 new stores this year, bringing the total to around 125 locations by year's end. All of these openings are planned to be dual-gender stores due to the size of the Men's opportunity. In total, square footage in China is expected to grow about 35%. And as we said earlier, we expect sales to total at least $400 million, driven by both distribution and same location sales growth. We're also very excited to announce a new distribution channel for China, e-commerce, which we expect to go live next month, providing Chinese consumers a new way to engage with the Coach brand. In terms of our other Asian direct markets, our primary focus this year is on driving productivity rather than new distribution, as we continue to invest in people through training, as well as merchandising, store environment and systems, creating a brand-right experience. In Japan, where the overall consumer market remains challenging, we expect to open about 10 net new locations, most of them dedicated Men's doors. In total, we expect that net square footage growth will increase by about 10% this year compared to about 5% in FY '12. Finally, as you know, beyond our directly owned international businesses in Asia, we do have significant and growing distributor-run businesses in other countries. We're focusing on expanding through partners in 4 regions: first, in Europe, where we have begun to build the foundation for long-term growth; second, Latin America, including Brazil, Venezuela, Colombia, Panama, Chile and Peru; third other Asia-Pacific markets such as Australia, Thailand and Indonesia; and fourth, the Middle East. These are in addition to the significant global travel retail opportunities that continue to exist for Coach, as the brand's recognition continues to grow globally. We've just reviewed our strategies to drive our growth at a double-digit pace given the continuing strength of the Coach brand and our increasing global expansion. We have significant runway ahead of us, both in international -- both in North America, which remains a growing market and worldwide, while our focus on Men's and digital provides additional opportunities for growth. At this time, I will turn it over to Jane Nielsen, our CFO, for further detail on our financials and investment plans. Jane?

Thanks, Lew. Lew and Mike have just taken you through the highlights and strategies. Let me now take you through some of the important financial details of our first quarter result. As a reminder, and as noted in our 8-K filing earlier this month, we've changed our segment reporting for FY '13 to a geographic focus, recognizing the expansion and growth of sales through our international market. This quarter, revenues increased 11%, with North America up 8% and international sales up 15%. Net income for the quarter totaled $221 million, up 3%, with earnings per diluted share of $0.77, up 6%. This compared to net income of $215 million and earnings per diluted share of $0.73 in the prior year's first quarter. Our operating income totaled $332 million, 3% above the $322 million reported last year, while operating margin was 28.6% versus 30.7%. This growth and our continued high level of profitability was achieved while making unusual investments in our business, primarily related to our distributor acquisitions, which we had previewed in our last conference call. During this quarter, gross profit totaled $845 million versus $765 million a year ago, an increase of 11%. The gross margin rate was 72.8%, even with prior year, with our sourcing cost improvement offsetting the higher cost of inventory repurchased in our acquisitions. As expected, our expense ratio in Q1 totaled 44.2% compared to the 42.8% (sic) [42.1%] reported in the year-ago quarter. Excluding the impact of distributor acquisition costs, we were able to gain leverage to EPS. As you know, our most significant investment is accelerate in our international growth through the acquisition of domestic retail -- of the domestic retail operations of our key Asian distributors and the further development of infrastructure to support this global growth. We are also distorting our investment in the digital phase to expand and deepen our engagement with consumers. Inventory levels at the end of the quarter were $598 million, 15% above $520 million reported at the end of last year's Q1, consistent with our expectations given the repurchase of inventory from our newly acquired market. It will allow us to support distribution growth and to maximize this sale and holiday. Cash and short-term investments [indiscernible] $761 million as compared with $848 million a year ago. During the first quarter, we repurchased and retired nearly 3.1 million shares of common stock at an average cost of $56.59, spending a total of $175 million. With only $87 million remaining of the previous authorization, the board authorized another $1.5 billion in share repurchases. Net cash from operating activities in the first quarter was $202 million compared to $225 million last year during Q1. Free cash flow in the first quarter was an inflow of $146 million versus $194 million in the same period last year. Our CapEx spending were $56 million versus $31 million in the same quarter a year ago. Consistent with our previous expectations and reflective of our global growth initiatives, we expect that CapEx this year will be in the area of $250 million, primarily due to new store openings and expansions across all geographies, elevating our store environments within our existing stores and investments in the technology and infrastructure necessary to enable global expansion. Looking at the balance sheet. At the balance of 2013, the goals we articulated back in July have not changed. We remain mindful of balancing the impact of a weak global macroeconomic outlook with our optimism around our business. So when you're thinking about the year, our plans are in line with those outlined in our July call. First and most generally, we continue to expect to achieve double-digit sales growth. Our FY '13 sales will be driven in part by low- to mid-single-digit comps in North America for the year. As you know, our comparisons will be most challenging in the second quarter given our extremely strong multi-year comp performance. However, we do expect comps to strengthen in the second half. In addition, currency is likely to be more of a top line growth headwind in the first half of the year. Second, our gross margin is planned to improve modestly, as channel mix and our sourcing initiatives continue to contribute to profitability. On balance, we expect gross margin to remain high and in the 73% range for the year. Third, on SG&A, international acquisitions alone will cause our expenses to rise at least 150 basis points for the year. Fourth, therefore taken together, we would expect some compression in the operating margin to about 31%. Notably, we expect our core businesses to continue to deliver leverage to EPS. And fifth, our tax rate is likely to be in the area of 33% for the year, as we further refine our international tax strategies. In summary, we were pleased with our first quarter result, highlighted by double-digit top line growth and driven by strong comparable sales -- same -- comparable store sales in North America and China. Looking forward, we're accelerating our distribution plans to leverage the emerging market opportunity with a particular focus on China, exploring new geographies, capitalizing on the increasing popularity and recognition of the Coach brand with discerning consumers, both men and women globally. Importantly, we remain committed to achieving double-digit growth over our planning horizon. We have a business model that generates significant cash flow, and we are in a position to invest in our brand, while continuing to return capital to shareholders. Now I'd like to open it up to Q&A. Operator, you may go ahead.

[Operator Instructions] Our first question today is from Kimberly Greenberger with Morgan Stanley. Kimberly C. Greenberger - Morgan Stanley, Research Division: I'm wondering if you can talk a little bit about China. We've seen a number of your peers indicate that sales there have been a little bit difficult. Your numbers were surprisingly good. Can you just dig into the strength in China? And in particular, how is the Legacy line doing there? And I just had one clarifying question for Jane if I could. Jane, did you indicate that without the acquisitions, your operating margin in the quarter would have been up? And does that mean that you would expect after this year that you could actually see operating margins trend higher over time?

Sure. For clarification, what we said is without the impact of the acquisitions, we would have had some leverage from sales to EPS growth. And our gross margin, as I called out, was impacted by acquisitions by about 30 basis points.

Alright, [indiscernible] Victor Luis.

Given the overall context of the markets and of course, our overall higher comp base, we are extremely pleased with the growth that we have shown in the quarter. And I think it's a strong reflection of the relevance of our products. And to the second part of your question, the performance of Legacy. As Mike touched on in his comments, Legacy is truly resonating globally, not just here in North America. And we're especially pleased with its performance in China where it is becoming a very strong second pillar for us alongside Madison. Madison has been, since our launch in China with the takeback of the business, a true iconic collection for us and continues to be a very strong recruiting tool as such. And now Legacy is a second pillar and especially relevant with current Coach fans that are looking for a more subtle, more fashionable collection from a multi-category perspective. We're especially pleased in China with the performance of Men's and as well, even outerwear where in certain locations we're seeing double-digit penetrations of Legacy outerwear. So overall, a strong story.

Our next question is from Brian Tunick with JPMorgan. Brian J. Tunick - JP Morgan Chase & Co, Research Division: I guess for Mike, a lot of questions surrounding the quarter was on the couponing side, so maybe just hoping you could just talk about the Facebook coupon at the full price stores. And obviously, you still seem to have a lot of room to get back towards your peak conversion in traffic. Just trying to understand the thought process there. And similarly in the factory side, how -- now you look back. I guess you've had 2 or 3 quarters on the fair-and-square pricing, the couponing now back in the store. Just give us some idea of your thought process now, what you've learned. And then maybe if Lew just wants to talk about the market share opportunities maybe in Asia x Japan. Obviously, you’re the market share leader here in the U.S., over 30% market share. Just wondering what are realistic targets you think Coach could have in Asia x Japan over the next 5, 7 years.

Okay. But I think we got about 5 questions in there. Mike, why don't you take the first several. Michael D. Tucci: I'll give it a crack, and I will -- let me address on the full price side, there's been some noise on the investor's side around promotional activity. We actually saw a very healthy quarter in our full price business. We were extremely pleased with Legacy and the performance of our business across men's and women's. And promotional activity is actually down. So what I think occurred out there, which was a pickup on your side a bit, was we did experiment with some customer acquisition, third-party opportunities within the digital space. And that created some noise in the marketplace. We'll continue to probe on that and experiment, but it's really not a large segment of our business. On the factory side, as we stated in Q4, we were going to take a more promotional stance in our stores around in-store marketing. And that proved to be very successful. And I might add there that we're really pleased on the factory side, as we return to marketing tactics in-store. We're able to maintain very high margin rates consistent with prior year and get the productivity levels back.

With regards to your market share opportunities, I had mentioned before we had 17% market share in Japan where we are the #2 share. It was -- it would show [indiscernible] for me to suggest that in China we could have that market share. But we would not be content with anything less over time. So we do believe as the market develops, Coach is particularly well positioned for the emerging middle class in China. Victor, touched on our business and our consumers. They still have over a 90% repurchase intent. We feel very optimistic that in the emerging markets we can develop very strong leadership positions. In more developed markets, we think it's more realistic to look at 10% as an aspirational goal, where in certain markets today, we have 5% and 7%. Victor, you want to expand on that?

I think you said it all, Lew.

[Operator Instructions] The next question is from Edward Yruma with KeyBanc. Edward J. Yruma - KeyBanc Capital Markets Inc., Research Division: Could you talk a little bit about Legacy and the customer base that you're seeing? Do you view it as a new customer? Is it a lapsed customer? Or is it your core Coach customer that's very enthused about Legacy?

It's really all of the above, and it varies a lot by market. What we're finding is that some of the Legacy styles that are extremely reminiscent of the styles that were in existence 20 or 30 years ago are particularly appealing to an existing consumer, the larger bags. At the same time, the smaller bags are doing -- which are trend right, are doing very well with younger consumers. Overall, we're finding that we are appealing to new consumers, existing consumers and lapsed consumers. It all depends on the market and the circumstance.

Our next question is from Barbara Wyckoff with CLSA. Barbara Wyckoff - Credit Agricole Securities (USA) Inc., Research Division: Can you talk about the flash sales in the factory stores? What are you learning from these? And do you intend to do these in Asia? Michael D. Tucci: We are -- we're really, I would say, in exploration mode on the flash side. It is a very targeted program to a discrete audience of factory-only consumers, with targeted pricing, margin structure that we love, response rate and performance that we control. And we'll continue to use this. This is just an extension of us moving into the digital world and leveraging it across channels and across customer types in a targeted way.

Victor, you want to touch on it internationally?

Sure. The only place where we tested it and experimented, as Mike mentioned, has been in Japan. Important to note though that our e-mail database there is quite small, so it is a very tiny experimentation at the moment. And as we learn more in the U.S. and continue to grow our database, we will revisit it in the years ahead.

It's actually a very substantial opportunity, as consumers are looking for convenience and they're also looking for limited edition factory product. And again, just to reiterate, we -- this is a focus on consumers who only purchase in factory stores. We do not offer this opportunity to full price consumers. So what we're doing is we're leveraging the opportunity among existing brand-loyal Coach factory store consumers to give them the opportunity for a time-limited circumstance to buy factory product at a great price.

Our next question is from Paul Lejuez with Nomura. Tracy Kogan - Nomura Securities Co. Ltd., Research Division: It's Tracy Kogan filling in for Paul. One question and then one clarification, the first question is on Legacy and how we should think about how this line will transition into the factory channel and what the timing on that would be. And how does that compare to how you transition Poppy from full price to factory? And then on the clarification, I think you said your gross margins in factory were flat, but I wasn't sure if you meant operating margin. But if you could just clarify that and if you could give us the direction of gross margin in your other channels as well? Michael D. Tucci: Sure. I'll take most of that. Our Legacy development today is focused solely on full price across Men's and women's. We are in the very, very early days of development. We have tremendous innovation and newness coming into the marketplace there across silhouette, fabrication. There is not any need for us to think about Legacy as a factory platform. In fact, we're looking at newness and elevation within factory stores outside of Legacy as we head into the fourth quarter -- third and fourth quarter of '13 and into '14 where we have exciting platforms there, leather and fabric based. So Legacy is really a full price proposition going forward. And yes, when I was speaking to margin, what I was talking about margin rate in factory stores during the quarter, holding its own against the change in the promotional strategy, which we're very pleased with.

Our next question is from Omar Saad with ISI Group. Omar Saad - ISI Group Inc., Research Division: Wanted to ask you about marketing. I think Mike had mentioned it in the prepared remarks, mid-November marketing plan. How are you guys philosophically, strategically thinking about marketing plans? You've got 2 kind of arguably very different, very important initiatives, both the Legacy and the Men's, which are a little bit new for the brand. How important is the marketing to get the word out to consumers to bring them into the stores? And what are some of the strategies around that? And then I also wanted to ask, within the Legacy business, are you seeing any differentiation in terms of the success at higher price points or lower price points or different type of products within the Legacy business in the early days?

Well, first to your general question on marketing, we are approaching both -- we're approaching Legacy and our new collections in the dual-gender manner. If you look at our print ads and you look at all of our digital advertising, you'll see both dual-gender products as well as women's products and Men's products featured in a lifestyle manner with people who personify the Coach brand. And so we have a layered approach on the marketing. More specifically, when we think of marketing, it's not only advertising, but it's store windows. It's the store environment. And when you visit our stores today, you'll see a Men's presence in most of our store windows. You will also see in our flagship locations a very strong head-to-toe lifestyle presentation. And we feel quite good about our ability to convey a broader world of Coach that's more modern, more emotional and more relevant. Michael D. Tucci: Lew, just to build on that in terms of marketing, where I would point to is our efforts to enhance our store environments, not only through window presentation but in-store environments. We did make a strong investment going into the year and through the quarter in the top 100 stores. In full price, we got credit there. Our flagship stores outperformed in the quarter, driven by, I think, a more comprehensive Legacy presentation, including Men's that really cut through. We'll continue to build on that. And what we're seeing out there, including in key department store locations, tremendous appetite or range of price points and product offer and handbags within Legacy and all our collections. And I think we have to continue to take advantage of that from a marketing and positioning standpoint in the marketplace.

Our next question is from Jessica Schoen with Barclays. Jessica Schoen - Barclays Capital, Research Division: I was wondering if you could give us some more detail about how much of an impact the Asian acquisitions had on gross margins, as well as how much it benefited from the sourcing initiatives and the channel mix?

So, Jessica, what you saw is that we had a 72.8% gross margin, about even with prior year. And what we're calling out is that our sourcing initiatives and improvements there were able to offset about 30 basis points of pressure from the repurchase inventory in the acquisitions. So excluding acquisitions, we would have seen gross margins up 30 basis points. On the cost side, what we're seeing as we move through these acquisitions that we expect, as I called out in the prepared remarks, about 150 basis points of pressure on our SG&A line from the acquisition as we move through the year, heaviest in the first half, it eases in the second half.

Our next question is from Liz Dunn with Macquarie. Lizabeth Dunn - Macquarie Research: I'm curious about the holiday, just sort of the number of SKUs under $100, if you could share that detail, particularly as you think about Legacy and some of the wristlets and cold weather accessories. Can you just tell us how that should play out? Michael D. Tucci: Sure. very much consistent with prior years, little bit of nuance by store attribute, so you'll see some distortion in higher price points in flagship stores and more balance in primary stores. We are making a stronger play in what I would call tech accessories. That's kind of obvious given what's going on in the marketplace. It's also a price point opportunity, a color opportunity. So you'll see us go after that in both channels, frankly. And we feel like from a gifting standpoint, having Men's and women's more bold in more stores offers us a nice advantage this holiday versus prior years. Lizabeth Dunn - Macquarie Research: Can I just ask a follow-up, which is who's buying Legacy? Do you still feel like it's a sort of fashionista customer? Or who's the core customer for the Legacy line? Michael D. Tucci: Yes. I think Lew touched on that earlier. We're really seeing a broad response to Legacy across existing and new consumers, terrific response to Legacy in the department store channel where we've seen tremendous impacts on leather based and penetrations of leather go up. The other nice thing about Legacy from a handbag standpoint is it's landing right in our sweet spot in terms of average unit retail, right in that $300 range with, again, some headroom to move up with elevated product in select stores going forward.

Our next question is from David Glick with Buckingham Research. David J. Glick - The Buckingham Research Group Incorporated: This a question for either Lew or Mike. Historically, it's been a great strength of Coach that you really haven't been very reliant on the department store channel to drive your growth. However, it is an important customer phasing channel and important for the brand given how many customers are going through department stores in the U.S. and how the accessories business is growing just disproportionately within that channel. I just visited your new Herald Square shop at Macy's, which looks sensational, and I'm just wondering is this a kind of reinvigorated commitment to the presentation to the content in that channel. And are you looking perhaps to defend your market share a little more aggressively in that channel given the success of the category there? Michael D. Tucci: You said it all. We are -- first of all, we're -- we believe in the department store channel in North America. We believe in our partners there. We believe in our leadership position there. We have really put our noses into that business. We understand the competitive set well. I think the Herald Square effort, which was led by Lew and the management team here speak to our commitment in the channel. We're going to school there. We will be relentless. We will look for opportunity, and we'll manage our business one customer at a time in the same way that we manage our business in all of our other channels. David J. Glick - The Buckingham Research Group Incorporated: So would you expect to see your -- the sell-in trend be more in line with kind of the POS trend? And if not, see some growth there as we go through the balance of the fiscal year? Michael D. Tucci: We're really looking to optimize productivity there. Sell-in, things like replenishment and the opportunity to maintain consistency in the channel, newness, potential product development opportunities within the channel, it's across all areas. What we want to manage there is focus on the locations that we're in, how to make them more productive and to point our inventory into the right stores at the right time and turn that business and move it forward.

Our next question is from Erika Maschmeyer with Robert W. Baird. Erika K. Maschmeyer - Robert W. Baird & Co. Incorporated, Research Division: Follow-up on the department store strategy that you were just mentioning. On the inventory side, at this point, do you have enough inventory in that channel? Or does your sell-in kind of limit that? When might you see that pick up? And then on the -- can you give us a sense of the magnitude of the Men's contribution? I know you rolled it out to the 85 stores late in Q4, so wanted to get a sense of how much of a lift that provided in Q1. Michael D. Tucci: Yes, the big opportunity on the department store side, particularly with Macy's but I think with others, too, is to really focus on EDI and to focus on getting into a replenishment business across key styles that we can own and manage. We own the inventory. We're working very closely. As we look into Q2 from a readiness standpoint, we feel like we have a very good pipe. We are being more conservative with our ship into that channel, but as we see the business move and we see traction, we have the opportunity to chase and to replenish into that business in a very productive way. Erika K. Maschmeyer - Robert W. Baird & Co. Incorporated, Research Division: And then on Men's? Michael D. Tucci: Oh, I'm sorry. Men's lift, well, the reality for us here is that while we pushed -- from a North America standpoint, we pushed Men's into about 100 stores in what we would call a significant way. And it's been both a comp and customer acquisition driver for us. We now have Men's in all stores, either through CBSR or in some opening assortment way going into the holiday season, which I think provides us further opportunity within the quarter.

Our next question is from Jennifer Davis with Lazard Capital Markets. Jennifer M. Davis - Lazard Capital Markets LLC, Research Division: First, I have a quick clarification. Jane, I think you said gross margins would have been up about 30 basis points, excluding the impact of the acquisition of distributors. Could you tell us how much either SG&A or EBIT margins would have levered excluding the acquisition?

So what we would have seen excluding the acquisition is our operating margin would have been about -- we would have seen operating margin compression about 80 basis points. And that was expected given the distortion of marketing into the first quarter to support Legacy. Jennifer M. Davis - Lazard Capital Markets LLC, Research Division: My question was on Men's. How much did that, I guess, contribute to growth in the U.S.? And is there an opportunity -- I think you kind of addressed this in the last question, but is there an opportunity to expand it a little more into the rest of the fleet beyond just the digital or just a little presentation that you have? And then finally, on your e-commerce, is there an opportunity to expand or do you feel like you have an opportunity to get into any full e-commerce sites in any additional countries beyond China and Japan? Michael D. Tucci: I think on the Men's side, as I touched on earlier, while we haven't broken out specifically what the Men's contribution is, it is a positive driver from a productivity standpoint. And absolutely, we are looking from a format standpoint as well as within existing locations how we can get Men's product into our stores. I mentioned Pentagon City in my prepared remarks. That's a store where we've expanded and relocated in a mall to add a Men's store within side by side our women's store, where we've essentially seen the Men's business come from 0 in the prior store to a very significant Men's contribution relative to women's. So we're looking at that as a concept for us to potentially expand further in top locations and build out in addition to adding Men's into all stores going forward.

And to your second question on e-commerce sites, as we discussed, at the beginning of next month, we will go live, e-commerce in China, which follows up on our first international site in Japan. Right now, we're very focused on transforming our informational sites across our other direct to Asian markets into fuller marketing sites, including the leverage of mobile and iPad apps, as well then from there the possibility of partnering with our distributor partners in other markets and looking at future developments in the e-commerce space.

Our next question is from Neely Tamminga with Piper Jaffray. Neely J.N. Tamminga - Piper Jaffray Companies, Research Division: Mike, I was wondering if you could help us understand as we look ahead to the holiday quarter, how you guys would be planning the promotions, like the best customer events and what have you and how that's planned relative to last year so that there's less confusion in the holiday quarter versus the prior quarter. And then also related to that, could you give us a sense of the complexion of the handbags in terms of the distribution between the bucket of below $400 and over $400? I think you guys have talked about it in the past. Just wondering what's going on with that. Michael D. Tucci: Sure. On the promotional side across full price and factory channel, very consistent with prior years. I think the only nuance out there is the method of delivery. What we put in the mail, what we put -- what we're doing digitally and how we might play with regard to third-party opportunities. But our plans today are very consistent with last year. In terms of mix on products, penetrations over $400 were essentially the same in Q1. I think you've heard me this morning speak about what I'm sensing as an opportunity for more elevated products, which I think may have an impact on that price tiering going forward. We did see some improvement in ADT overall, which we are very pleased with. And we think we're extremely well positioned from a gifting and pricing standpoint across all channels as we head into the holiday quarter.

Our next question is from Michael Binetti with UBS. Michael Binetti - UBS Investment Bank, Research Division: Could you help us think a little bit more about the gross margins in the U.S. full price side of the business. I'm trying to add up the pieces a little bit. You said 30 basis points was basically a wash between sourcing and the acquisitions. And I think Mike Tucci said that the factory stores were about flat. And we know China is better, so how are you feeling about the U.S. full price stores in the gross margin side right now?

We're feeling very good about our gross margin position. I think that our -- with the sourcing initiatives that we put in place continue to work, it's offsetting the pressure that we've seen from the acquired inventory. And so we feel we're on a good trajectory, and we're pleased, as Mike mentioned, with our factory store and full price store gross margin in the quarter. Michael D. Tucci: I think that the only piece that I'd add to that is as we've been able to really work our Men's product and work on our positioning in Men's, the team has done a tremendous job in terms of cost retail relationship there, so as we grow our Men's business to become a margin benefit for us in full price. And that's been a terrific win for us. Michael Binetti - UBS Investment Bank, Research Division: Okay. And is there any way we can get maybe just an update on the sourcing initiatives? Jane, I think you spoke about them a little bit. But we heard from other companies saying that they do expect sourcing to rise a little bit from Asia over the next few years versus, obviously, it's been a good source of deflation over a much longer period. How are you looking at it today? Maybe just an update on some of the initiatives you gave us last year on the sourcing outlook.

I'd like to ask Jerry Stritzke to answer that. Jerry?

Thanks, Lew. We really are well into a 4-year plan that we articulated, I believe, the last -- about a year ago. And that shift has benefited us as we move more and more of our production into countries outside of China, Vietnam, Indonesia, other countries. And that involves both finished goods and raw materials. So as that shift has continued as kind of the mix has offset the actual pressure that we've seen in labor. Obviously, as we look forward, there is a lot of uncertainty about what labor costs will be around Asia and around the manufacturing base. So that's something we'll have to continue to pay attention to as we look to the future.

Jerry, just comment on raw material costs if you would.

Overall, we've been able -- raw material costs hit a spike about 2 years ago. It dropped. We've been successful, and we have a great raw material team that really spans Asia and Europe and not only addresses leather-based costs but also addresses hardware. So we've had a very aggressive posture of taking positions we need to, optimizing our raw materials costs, which is about 60% of our cost of goods when you look at our handbag and small leather goods. So our expertise and credibility there, including creating new sourcing basis in our new countries where we're doing manufacturing, which cuts our logistics expenses, has all kind of contributed to keeping those costs in check and keeping us in a good place. So it has worked well for us. We'll continue to strive to make it work as we look to the future.

I would now like to turn the call over to Mr. Frankfort for closing comments.

Thanks. Pretty much everything has been said. I'll just close by saying we had a good quarter where we have traction on all of our initiatives. We're well positioned for holiday, and our opportunities for long-term growth continue to be abundant. And we're going to take advantage of all of them. Thank you, everyone, and have a good day.

Thank you. This does conclude today's conference. Thank you for joining. You may disconnect at this time.