Evren Kopelman - Vice President of Investor Relations Patrice Louvet - President and Chief Executive Officer Jane Nielsen - Chief Financial Officer.

Robert Drbul - Guggenheim Securities Matthew Boss - JP Morgan Simeon Siegel - Nomura Securities Kate McShane - Citi Omar Saad - Evercore ISI Ike Boruchow - Wells Fargo & Company Lindsay Drucker Mann - Goldman Sachs Rick Patel - Needham & Co. Erinn Murphy - Piper Jaffray.

Ladies and gentlemen, thank you for standing by. Welcome to the Ralph Lauren Third Quarter Fiscal 2018 Earnings Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. Instructions on how to ask a question will be given at that time.

[Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the conference over to our host, Mrs. Evren Kopelman. Please go ahead..

Good morning, and thank you for joining Ralph Lauren's third quarter fiscal 2018 conference call. With me today are Patrice Louvet, the company's President and Chief Executive Officer; and Jane Nielsen, Chief Financial Officer. After prepared remarks, we will open up the call for your questions, which we ask that you limit to one per caller.

During today's call, we will be making some forward-looking statements within the meaning of the Federal securities laws, including our financial outlook. Forward-looking statements are not guarantees. And our actual results may differ materially from those expressed or implied in the forward-looking statements.

Our expectations contain many risks and uncertainties. Principal risks and uncertainties that could cause our results to differ materially from our current expectations are detailed in our SEC filings.

To find disclosures and reconciliations of non-GAAP measures that we use when discussing our financial results, you should refer to this morning's earnings release and to our SEC filings that can be found on our Investor Relations' website. And now, I will turn the call over to Patrice..

adopt a more consumer-centric approach; shift marketing investments to the channel that matter most of our consumers; drive greater integration across consumer touch points; and finally, put more emphasis on marketing measurement and analysis.

We are developing deeper knowledge of consumer behaviors and being more precise about how we engage specific consumer groups. This will enable our marketing investments to be more effective and efficient. In order to expand the brand's reach globally and increase consumer demand, we are shifting to more digital and more social platforms.

With a focus on influencers and strategies that drive traffic to our e-commerce channels. As an example, in the third quarter, on Singles' Day in China, we partnered with celebrity Chinese model He Sui, to introduce the Polo Bear limited edition on Tmall.

This event attracted more than 100 million live views and impressions on TV and social media across China. We're also experimenting with new channels to drive further engagement with the younger consumer, for example, we launched our first ever Snapchat activation as part of our create-your-own product customization promotion.

We expect to build on the momentum we are seeing on digital platforms. Our Instagram followers are up 40% over the last year. And our WeChat fan-base is up 50% over the last three months.

When it comes to influencers, we believe in investing in long-term relationships, with those who have an authentic connection to the brand and influence the areas of culture that matter most to our audiences.

We built on our influencer and celebrity coverage in the third quarter, with dressing activity including Gigi and Bella Hadid, Jennifer Lawrence, Blake Lively, J.Lo, Chance the Rapper, Zendaya and Jessica Chastain, as well as Fan Bingbing, Karen Mok, GEM [ph], and JJ Lin in Asia.

An illustration of greater integration across consumer touch-points this quarter has been the Holiday Polo Bear campaign. We created a consistent experience for the consumer as we integrated the message across product, digital media and our sales channel.

We featured our iconic Polo Bear across store windows globally, in video content on social media and through collaborations with influencers. Finally, in terms of upgrading our shopping experience. We continue to invest in our store environments in the third quarter.

In wholesale, we've refreshed a number of our shops and have seen improved sales and margin trends versus control doors and pretest trends. This activity will continue in partnership with our key customers.

In retail, refreshes and renovations are elevating the store environment especially in our factory stores, driving improved gross margins ahead of our expectations. We have more of these projects in the pipeline for fiscal 2019. Moving onto our third key initiative, expanding our digital and international presence.

Last quarter I spoke in detail about our growth potential in Asia, specifically in China. We had strong performance in China in the third quarter, which Jane will review in a moment. This quarter, I want to highlight our digital initiatives. It goes without saying the digital is critical to our future growth as the consumer continues to shift online.

The shift is not only for purchases, but as a whole ecosystem of touch-points from product research to product reviews and ongoing brand interaction through social media, digital marketing and digital own content. Across the company, we are pivoting to digital-first mindset in order to position our business to win in the new digital world.

On the e-commerce front, our strategy has three pillars; one, our directly operated websites; two, department store websites; and three, digital pure players. Starting with our directly operated websites, RalphLauren.com is our digital flagship. And our vision is to make you the best most elevated expression of our brand.

To deliver that vision, we've been significantly pulling back on the level of deep discounting to improve quality of sales. Fiscal 2018, we are driving nearly 700 basis points of reduction in the penetration of third and fourth markdown sales in our North America e-commerce business. We also recently transition our U.S.

site to a new technology platform that offers a better mobile experience and functionality like improved search and more seamless checkout process.

We'll continue to add functionality like customer reviews, chat and personalization, and are beginning to upgrade the creative look and feel of the site to build the richer experience and capture new consumers. In fiscal 2018, we estimate that our global directly operated e-commerce business will generate approximately $380 million of revenue.

As we look forward to fiscal 2019 with our new site in place and the major promotional pullback behind us, our goal is to start to build quality traffic and grow revenue on our U.S. site.

The strategy for digital flagship is to emphasize brand experience, develop digital content around RalphLauren.com that drives deeper consumer engagement and conversion as well as offer more omnichannel services like pickup and return in store. Moving onto department store websites, this business is healthy and growing.

We've been gaining market share in key categories at our key partners. The penetration of the department-store-dot-com business to our total department store sales is in the high-teens and growing.

Moving forward, in order to accelerate share growth, we will collaborate even more closely with key partners to leverage consumer insights to better reach and convert traffic. Lastly on digital pure players, this is the fastest growing part of our e-commerce presence and it allows us to attract younger consumers into the brand.

We are partnering closely with our pure play customers of marketing events, optimizing search and other data analysis to drive higher traffic and conversion for our brands. Our pure play business is more developed in Europe and other parts of the world, as we've been building relationships with key players for a number of years there.

We currently sell-through over 40 online retailers in Europe, including Zalando, Boozt, ASOS, YOOX and MR PORTER. In Asia, our network is developing and we were focused on driving a full price strategy with limited discounting. We currently work with 11 pure players including T-mall, JD.com, WeChat, ZOZOTOWN, and THE ICONIC.

In the U.S., we're beginning to launch with new brand appropriate sites, having added seven year-to-date with several more to come in the fourth quarter. As we explore pure play opportunities, what's most important to us is that the brand is presented appropriately and pricing integrity is maintained.

We prefer the marketplace model where we have control over how we show up to the consumer. On these sites, we have created digital shop-in-shop environment with consistent brand experience, tailored product stories and an assortment that is carefully curated by our merchants.

As we look across department-store-dot-com and pure players, we are on track to generate approximately $580 million of global sales at retail in fiscal 2018. This is up approximately 9% to last year. We expect this channel to continue to grow as a percentage of our mix going forward.

To support our digital expansion, we are investing in our talent and infrastructure. Last week we announced a number of significant changes in our digital organization, including the appointment of new senior leaders with strong backgrounds and critical technology and e-commerce positions.

As well as our first ever Chief Digital Officer, Alice Delahunt. Alice joins us from Burberry, where she served as director of digital marketing and led digital innovation. She will be responsible for elevating our global digital platforms and enhancing the consumer experience across all digital channels to drive acquisition, conversion and retention.

She will report directly to me as a member of the executive leadership team. These are just a few of the important steps we are taking to enhance our digital and e-commerce capabilities and build-up the platform.

As we evolve and expand our work across digital, we expect the profitability of our digital operations to improve over time as we leverage our fixed cost asset base and drive productivity initiatives. To in closing, as I mentioned earlier, while we still have a lot of work to do to reach industry leading revenue and earnings growth.

I believe, we are moving in the right direction with clear focus on initiatives that will reignite quality growth and continue to drive productivity across our business. Ralph and I are deeply committed to evolving our iconic brand is experienced and expressed across all the consumer touch-points.

And we are proud of our organization that is coming together as one-team focused on the consumer driving superior execution across our key priorities. With that, I'll turn it over to Jane. And I'll join her at the end to answer your questions..

first, a planned shift in timing of wholesale shipments, this shift benefited Q3 and will pressure Q4; second, in retail, a large portion of the March quarter is driven by clearance sales post-holiday. To support our quality of sales initiative, we have planned for less clearance inventory, which will limit clearance sales volumes year-over-year.

This will more than offset the benefit of these Easter shift in Q4. We expect gross margin to continue to expand in the fourth quarter, however SG&A rate will see some pressure. While we continue to drive expense reductions, we are also investing in growth initiatives, especially in marketing.

In the fourth quarter, our marketing investments will be up even more significantly than the third quarter. And we will be focused on our new Spring Polo campaign, featuring our iconic Polo Shirt. We will also fully amplify the coverage of our February fashion show and our sponsorship of the Winter Olympics.

As a result, operating margin in the fourth quarter is expected to be down 240 to 260 basis points in constant currency. Foreign currency is estimated to benefit operating margin by approximately 90 basis points. We continue to expect restructuring charges to approximate $200 million.

However, from a timing perspective, we now expect approximately $130 million in fiscal 2018 and roughly $75 million to $85 million of lease-related cost to shift into FY 2019. In the third quarter, we recognized $27 million of restructuring and other charges.

We now expect capital expenditures for fiscal 2018 to be around $200 million, lower than our previous guidance of $225 million as we shift certain capital expenses into fiscal 2019 and focus on consumer-facing initiatives that have demonstrated a proof of concept and healthy rates of return.

We expect our effective tax rate for fiscal 2018 to be approximately 23%, below our previous guidance of 25%. And for the fourth quarter, to be approximately 3%, due to the lower U.S. federal income tax rate as a result of tax reform and discrete items.

When it comes to capital structure and priorities for cash, we are committed to maintaining our strong balance sheet and investment-grade credit rating to provide strategic flexibility, liquidity and access to capital markets. Our first priority is to allocate capital investment to our growth initiatives.

Our second priority for cash is to maintain and grow our dividend, followed by potential share repurchases. While we are planning no share repurchases for fiscal 2018, we will review our future plans with our Board of Directors at year-end. We are also currently evaluating the impact of the repatriation of our foreign cash under tax reform.

In closing, we continue to make strong progress on our platforms for growth and our operational efficiencies. Our balance sheet is strong and we are growing our cash flows. We are elevating our brand across all channels and consumer touch-points to ensure that Ralph's enduring vision is translated in a compelling and consistent way.

Our teams around the world are laser-focused on execution and realizing the value creating opportunity for all our stakeholders. With that, let's open up the call for your questions..

[Operator Instructions] The first question comes from Bob Drbul with Guggenheim Securities. You may ask your question..

Hi, good morning..

Good morning, Bob..

Good morning, Bob..

I guess, on this quarter, we've become accustomed to seeing you guys beat on the margin side, but this is the first quarter in a while that you came in at the high-end of the revenue guidance. So I was wondering if you could just elaborate a bit more on the drivers around the top-line..

Sure, I mean, as you mentioned, I think we're actually encouraged by our revenue results in the quarter. I think we're really starting to see the early benefits of our key initiatives, right, with a specific focus on elevating our brand by improving quality of sales and quality of distribution and you heard us give some examples of that.

And also evolving our product and our marketing so that we can really expand our reach and appeal with new consumers, and that's starting to play out, obviously early days. We're especially pleased with the in-store executions that our teams delivered in North America during the holiday season.

And we also recognized we benefitted in the whole channel from a more positive sentiment in North America, so that's part of it.

So I'd say, all in all progress, but we're also very clear we still have a lot more work to do in order to get back to high quality growth and continue the productivity progress that we've done, so we can deliver the shareholder value that everyone expects from this company..

Next question, please..

The next question comes from Matthew Boss with JP Morgan. You may ask your question..

Thanks. So, Patrice, last quarter you cited quality of distribution initiative. I think you said in the seventh inning and quality of sale actions is ongoing. I guess, to put this into perspective. Your guidance for this year is basically to end with roughly $6.1 billion revenue base.

Are you comfortable that this is trough level or just help us to think about - do we need to think about further shrink prior to re-growing, just the best way to put into perspective, where you're at today with revenues and how best to think about going forward..

Okay, good morning, Matt. Most of the key interventions from a distribution and discounting standpoint are happening this fiscal year.

So if you look at the interventions we've made in wholesale, full price on wholesale, if you look at the interventions we've made in terms of store closures, if you look at the interventions we've made online from a discounting standpoint, most of the big interventions are happening this fiscal year. So I think $6.1 billion is a good starting base.

There is still for us a question mark as to our exposure in the off-price channel. So that's something that we're working through and we'll share how we're thinking about it, when we get together for the Investor Day in early June.

But I'd say, in terms of key interventions of quality of sales, quality of distribution, we should be more or less complete by the end of the fiscal year..

Next question, please..

The next question comes from Simeon Siegel with Nomura/Instinet. You may ask your question..

Thanks. Good morning, guys, and congrats on that ongoing margin and inventory progress..

Thank you..

Jane, any thoughts on where the gross margins can go from here and maybe the drivers there? And then, just as a reminder, on the EBIT level, the channel and geographic mix shifts are those accretive or dilutive at this point?.

Can you say your EBIT question again?.

Yes, I think you get the benefit with the channel and geographic mix shifts. I think it helps the margin just on the EBIT level.

How does that play out?.

Yeah, okay. So let's start with gross margin. I think you have seen us continuously drive gross margin. The number one driver is promotion and discount reduction. That is going to continue through next year. The sharp interventions that Patrice talked about will be over.

But the quality of sales work, reducing discount rates smartly, targeting AIR increases. That work will continue and be a positive for gross margin.

Our international growth is also going to be an enduring benefit to gross margin, as well as channel shift as we move into digital and as we move into our own store network, notably in Asia, those are all positive gross margin drivers.

The magnitude of the benefit that we had as we shift out of wholesale and into more - strongly into direct-to-retail, that gross margin benefit will start to lessen versus what we've seen this year. But in terms of EBIT, which was the next part of your question, our direct-to-consumer EBIT margins benefit from that shift as we leverage growth.

So what we're seeing is, in terms of overall EBIT accretion, we're growing operating margin in Asia, that's a net benefit. We expect that to - that margin expansion to continue over time.

Europe, as it continues to grow is also EBIT enhancing and we're managing through getting better leverage on our fixed cost, notably at corporate, so that overall EBIT margin for Ralph Lauren can expand over time..

Next question, please..

The next question comes from Kate McShane with Citi. You may ask your question..

Hi, thank you. Good morning..

Good morning, Kate..

Good morning, Kate..

My question was on Europe. I was wondering if you could break down in a little more detail some of the more macro impacts that impacted the quarter versus some of the company specific initiatives and factors.

And in particular, when it comes to wholesale in Europe, can you help us understand what the comp growth is for that business versus what the opportunity or what growth we saw from the opening of new doors or new accounts?.

Yeah, so let me break Europe into the first part of your question and then the second part of your question. So, what we saw in Europe was some challenging traffic trends, notably in our outlet stores.

And we believe that relates to obviously what you saw in the strengthening euro, because we saw a significant drop in foreign tourist traffic, notably into our outlets in Europe. And that was across both our Chinese foreign tourist consumers as well as our Middle East consumers.

So we saw those dynamics, again related to largely to the macro of currency dynamics. As I look at Europe wholesale business, the underlying trend for Europe wholesale is about flat.

We've had some shipment timing movements that we try to call out as we move through the year, but as we step back from that, we think the underlying trend is about flat on a comp and on an ongoing basis..

Next question, please..

The next question comes from Omar Saad with Evercore ISI. You may ask your question..

Thanks. Good morning..

Good morning, Omar..

Actually I want to just - I just wanted to clarify, Jane, in terms of the dynamics affecting the fourth quarter revenue guidance, the planned brand and distribution exits, the ongoing quality of sales initiatives, less clearance and the wholesale shift. As we think about what's ongoing and what's kind of specific to the fourth quarter.

Could you just clarify which one of those we should expect to continue? And then, I wanted to ask also about digital. What you learn - as you put your brand out there more, what you're learning about the brand? And where it's really effective and maybe where it's less effective as you put it out there more? Thanks..

Great. Why don't I take the Q4 guidance, and then I'll turn it - let Patrice answer your digital question. So as I - as we look at Q4 guidance, and we look at what's happening the denim and supply, the brand exits starts to abate in the fourth quarter. We're still heavily into the reset of our RL.com site from a pricing standpoint.

So in the third quarter, we've overlapped the transition of the platform, but we expect the impact of repricing, which you saw on the first half of the year to continue on the trend basis. We'll be at the tail end of the majority of our distribution exits, so that's about a constant pressure point in Q4 in terms of our reset actions.

And then just as I think about Q4, what's going on there specifically there are three things. One is that we have an Easter shift, which is a benefit of about an overall comp point in the fourth quarter. The two, other mitigating factors are wholesale timing shipments that we called out.

That's worth about - that's about a pressure of - 1 to 2 comp points. And then what we called out is that, we are going to be less heavy into clearance. This fourth quarter, because we're not moving significant inventory goods into the clearance season.

What you've seen is, we've raised our gross margin guidance and but it's slightly exceeding about a point of comp pressure in the fourth quarter. So those are the ongoing reset dynamics and then the specific dynamics to the fourth quarter..

Good. And then, Omar, good morning. On your digital questions, maybe let me break it down into kind of e-commerce and the brand building piece. So on the e-commerce, if you look at the three channels that we're approaching here.

First of all, as far as our own site is concerned this past quarter was a reset quarter as we transition to the new platform continue to significantly reduce discounts. I don't know that we can draw any major conclusions yet from this past quarter. I think, we've got more learnings as things stabilize from the platform and discounting standpoint.

As far as wholesale.com is concerned, we're actually really pleased with the progress we're making both here in North America and around the world, where we're seeing consumers respond really nicely to our presence online with our wholesale partners.

As we mentioned, we're growing share and the share of that business for us is increasing as part of our total wholesale business is currently in the high-teens, I expect it to continue to grow. So very encourage there, I think, we've got nice momentum that we now need to continue to fuel.

And I feel good about the partnership that we have with our key wholesale partners to drive that to leverage the consumer insights, to have joint marketing activities. The third piece is pure players, which is really honestly more or less new space for us as a company.

We're more advanced in Europe and other parts of the world, but we're starting to ramp-up in Asia and here as well. And early indications are quite positive, so we're feeling very good about the consumer response we're getting on our pure play partnerships. So that's the commerce piece. Then as far as the brand building piece is concerned.

We actually are seeing a number of things that give us confidence we're on the right track. We quoted in our prepared remarks, some data on how we're growing our user base or followership on Instagram. We're up 40% versus year-ago over the past year on Instagram with multimillion dollar increases.

Our fan base on WeChat, obviously, China's important market for us, 50% of the past three months, so we're seeing good response and good momentum on these platforms. We started to experiment with Snapchat, which is - I think we all know on this call, appeals to a younger consumer. And the statistics on this one, we're actually pretty amazing.

We achieved - so we ran a promoted story campaign around our Create-Your-Own initiative or personalization initiative. We did that the past quarter. I think one of the first brands actually to partner with Snapchat on native advertising. So we feel good about the fact that we're progressively getting into a leadership position in this space.

And just a couple of data points here. We achieved 419 million impressions over that timeframe, and we had a very strong engagement 2 million swipe-ups, which is the Snapchat's version of a click, which based on what Snapchat is telling us, it's actually a very strong performance and all of that took our users into a direct e-commerce sites.

So we are learning with new tools, we're making progress on existing digital platform, I think, we're encouraged by the progress. But as with everything we're doing, we know, we have more work to do, we really want to win with the broad group of consumers segments, we're targeting, obviously, millennials in part of that.

We're encouraged by some recent data we've actually seen on the band penetration among millennials, and we're just continuing to drive that journey. And Omar, really in the learning more, right.

I mean, I think, the mindset we have as a company here is, we want to become a digital-first company and you've seen some of the organizational changes that we've made to enable that.

And we recognize that this is a very fast evolving landscape and that we need to constantly learn and really be in the leadership position in those spaces and platforms that matter most..

Next question, please..

The next question comes from Ike Boruchow with Wells Fargo. You may ask your question..

Hi, good morning, everyone. Thanks for taking my question..

Good morning, Ike..

You guys mentioned several times on the call regarding your off-price business. I guess, either Patrice or Jane, just could you maybe give us a little bit more color there.

Maybe how much of that business plan to be down this fiscal year? Should those declines accelerate or maintain that rate into next fiscal year? Just trying to get a sense of maybe what your off-price penetration today is versus peak and really where you ultimately want that penetration to go..

Yeah. So as I look at the progress we've made to date, our off-price business is down in the mid-20% range. It's declining as a percent of penetration to our wholesale business. And we know that we want right now that trend, that penetration decline to continue into next year.

I think, we'll discuss, as Patrice mentioned, more of the magnitude of that as we move into Investor Day, but we know we want this penetration into our whole - full price wholesale business to decline. And it's really about getting back in balance with the role of that channel.

It has a very loyal large consumer base that loves to shop sort of the treasure hunt. And it can be a very powerful [indiscernible] for us to liquidate inventory. That's not where we're at today.

But that is the role that we like the channel to play within our business, of course, our partners and we have to make that that inventory attractive for them to merchandise and sell, and make sure they don't have broken sizing. But that's really the balance that we like to get back in that channel.

But good progress this year, we expect continued progress as we close out the year, and it's certainly one of our points of focus as we move forward into next year..

Next question, please..

The next question comes from Lindsay Drucker Mann with Goldman Sachs. You may ask your question..

Thanks. Good morning, everyone..

Good morning, Lindsay..

Good morning, Lindsay..

Jane, I wanted to just first clarify something that you had said in your prepared remarks, which I believe was that two-thirds of the decline, I think, in North American wholesale was related to deliberate actions.

So does that imply that, excluding your deliberate actions that business is running - has been running down around in the mid-single-digits, and then, as we think about North American operating profit for the region overall.

At what point should we be looking for operating profit to stabilize before then kind of pivoting to growth, so is that an early fiscal 2019 event? It seems like with some of the things that you're beginning to lap. Thank you..

Yes, Lindsay. So you're exactly right. In terms of what we can measure in our North America wholesale, we know that brand exits, distribution exits, receipt pullback, coupled with lessening promotional levels and frequencies are accounting for about two-third of the decline.

The remainder gets us to sort of an underlying trend of about mid-single-digit decline in our full price wholesale business. And that's based on traffic. And right now we're targeting gaining share as we move forward in that channel, knowing that there is - there are some secular challenges in that channel.

In terms of North American operating margin, we do expect as we come out of these deliberate and intentional pullback that we'll see improved top-line trends. And of course, in June we'll give you more specifics in terms of our expectations on overall operating margin and specifically for what we expect by country..

Next question, please..

The next question comes from Rick Patel with Needham & Company. You may ask your question..

Thank you. Good morning, everyone, and congrats on the progress. It sounds like you're accelerating focus on pure-play e-commerce sites here in the U.S. Can you share your thoughts on product segmentation? Maybe you can talk about your strategy in Europe if that's a good roadmap. I'm just curious that as we think about the U.S.

in the coming quarters, are your new pure-play partners going to have access to the same products as department stores do today or will that product be differentiated? Thank you..

So you're right. We are accelerating our focus on pure-plays around the world and probably North America is the region where we are least developed, so where the - where we have the greatest opportunity. We are going to approach the overall product lineup with a very broad lens, because we have presence across multiple segments including home.

Right, so you've probably seen us enter One Kings Lane. We're actually encouraged by the early results on that. So broad - that's a broad portfolio. We are keen to make sure we have the right level of differentiation across channels. So we are catering to the specific consumer that's shopping in that specific channel.

So we'll have the balance of common products across channels and differentiated offerings. But that's not just true for pure-players. That's also true for the way we approach our factory outlets and the way we approach our own stores relative to wholesale..

Okay. We'll take one last question, please..

The last question comes from Erinn Murphy with Piper Jaffray. You may ask your question..

Great. Thanks, good morning..

Good morning, Erinn..

I guess, I got a question for - on the North American outlet business, can you just talk about, from a traffic perspective, how that trended during the holiday quarter. And then just with the stronger euro, are you seeing a return to tourism yet here in the United States. And then, I guess, Patrice, for you on China.

If you deepen your growth efforts in this market, where is brand awareness, just remind us from an aided or an unaided perspective today. Thanks..

Sure. Erinn, let me just start with the North America outlet trends and what we're seeing in traffic. We're still seeing - for the third quarter, we saw traffic declines. Although, no real significant change to what we've been seeing in the previous quarters.

And then, overall, we were really proud in our North America outlet stores that we saw greater conversion with - even though we were less promotional and had less discount rates in our North America stores and that's what drove a portion of the outperformance that we saw in North America outlet, so really a tribute to the team.

Traffic relatively stable, and still slightly down mid-single-digit. As you look at foreign tourists, what we did see in this quarter was that our foreign tourist traffic was - in North America specifically was down.

It was down in that high-single-digit range, where we had come off this second quarter and saw foreign tourist traffic down low-single-digits. So foreign tourist traffic was more challenged in the third quarter than in the second quarter and a little bit better than what we saw in the third quarter of last year..

And as we talk China and brand awareness, so actually we've been surprised by the high level of brand awareness in China given, honestly, our limited store footprint and limited e-commerce presence until recently. We've just completed a pretty broad global analysis actually on where the brand stands. So we'll follow-up with you on the specific number.

But if I remember correctly, we're in the 70s in terms of brand awareness, relative to 90% in the U.S. So there is still a 20% gap for - relative to the market like the U.S., UK or Japan where we've obviously been for a much, much longer time. But I think a good starting point to drive the growth of business.

And obviously, as we increase our investments, as we increase our activities with influencers, as we increase our overall presence there, we're quite confident that we can get that number up significantly..

Okay, very good. Listen, we're going to call it a day. Thank you, all of you for joining us this morning. We look forward to talking to you in our next call in May. And then, importantly, we look forward to seeing many of you in our Investor Day on June 7 in New York City. So please capture that date in your calendars.

And at that point, we'll be in a position to share our perspective, not only on fiscal year 2019, but also how we see the roadmap for the company over the following years. So thanks for calling in and have a great day..

Ladies and gentlemen, that does conclude your conference for today. Thank you for your participation. You may now disconnect..