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#Thank you, <UNK>.
Yes, you are right.
We're in the middle of the assessment, so I can give you some early reads which is, we need to focus.
I'm a big believer in my leadership approach overall to focus and that includes our brands.
So in the plan that we will come back with in late spring, I will be very detailed in terms of how I look at being focused given the multiple brands we have.
What excites me though, is that the more I learn about the brand, the more I realize the strength of the brand.
So, focusing on where we will win when it comes to the brands will be essential and I will come back and give you more details.
When it comes to the quality of our distribution, that's also something that we are looking through in detail, and as I shared in my initial remarks, we will build Ralph Lauren into a stronger position it's ever had.
That's a long-term job.
I'll be able to give you more details in May, but we are looking through every single channel.
And, I'm going to make sure that the plan that we move forward with enables us to drive ground strength and drive profitable sales growth at the same time.
Yes, thanks <UNK>.
I think the answer to that is, what <UNK> started with, which is we are in an assessment phase on all aspects of the business.
And we are working through to create a strategic and financial plan that can drive shareholder value, can drive profitable sales growth and can strengthen the brand over the mid-term.
We plan to share that plan in more detail in late spring.
And so, we are not yet at the point where we are ready to quantify the elements of the guidance for FY17 beyond what we shared in the script this morning.
But I can say, but on the buckets, is that particularly, we shared I think on the call, the FX impact that we expect next year.
We remain on track on the infrastructure on both SAP and e-commerce to complete the SAP European implementation next year, as well as the e-commerce replatforming next year.
And we remain on track, as I mentioned, to deliver the $110 million of cost savings from the initial global brand restructure.
But we are in the assessment phase and we'll share more details in late spring.
Yes, thank you, Matt.
So starting with the pricing, it's going to be an important part and it is an important part of our assessment to look through our whole offering to our customers.
So, given the recent very disappointing performance, we are asking, and I'm driving that we are asking the tough questions in every single area of the business.
Because, what I'm determined to do with the team and with the support of Ralph, is to mask the business performance with the strength of the brand.
So when I look at the brand, it's one of the strongest in the industry.
And when I looked at our performance over the last couple of years, including the recent quarters, it's very disappointing.
So I see a significant untapped value in both the idea behind the brand, and as well as how we drive the business.
And therefore, in the way I outlined the way we approach building the growth plan for the future, there will be a customer facing component, which is about evolving the brand, evolving our product, marketing, shopping experience, and then radically improve some of our business engines.
And I believe that driving brand strength for the future and driving consistent profitable sales growth and in turn, giving high shareholder return, is to strengthen both those components.
Both the customer facing part and the underlying engines and have them play together.
That's also what I have experience of doing from my two previous brands.
Yes, absolutely.
Thanks, <UNK>.
When it comes to the brand, what excites me is that Ralph original idea behind the brand when he created it, it was much bigger than apparel and it was much bigger than product.
It was about inviting the customers into an aspirational life, their aspirational life and being very consistent in offering authentic style, high-quality and deliver specialness in the experience.
If you look at the disruptive market today, I believe that's exactly what you need to do to win, you need to be special.
You need to develop ---+ deliver a value that goes beyond apparel and if you look at the customer, the customer is now in charge and the customer is living a busy life.
What excites me about the original brand dish and then building that out, and why I see so much potential in it, is that we should deliver style to the customer.
And we can do that and we are known to do that and why we're so loved is because we have been so consistent in delivering authentic style, quality and specialness.
Okay, thanks.
Let me start, it's <UNK>.
Quality of distribution for me is any channel that gives us an ability to strengthen our brand and drive profitable sales growth at the same time.
So, we'll come back in late spring and give you more details on how we see output folio of distribution going forward.
And relative to the operating margin visibility for FY17, I think the thing that gives us visibility into that from the initial planning phase, is a number of factors, including, the full-year impact of the cost savings that we've generated from the global brand restructuring.
The full-year impact of the pricing that we've taken in devaluation markets that should kick in next year.
The cost savings that we're going after through the SKU and style rationalization.
And, the work that we are beginning on right-sizing the Company's cost structure for next year as part of the planning process, which we will share more detail on in late spring when we come back with the plan.
And I think, all of those things taken in aggregate, we have visibility to suggest that is going to result in operating margin being up versus the drag of foreign exchange that we have for next year.
And fixed expense deleverage.
Great.
Thank you, <UNK>.
Well, I come back to that it's a part of the assessment.
I will give you detailed outline of how I think about these questions in May.
But just initial thoughts is that my experience of driving high-performance in this industry is very much connected to finding a systemic repeatable way of creating a stronger and stronger assortment.
It's still early days, but I see big untapped value potential there.
When it comes to evolving assortment in terms of the balance of the assortment and in terms of sports and catering to the customer's different needs, I'm coming back to why I believe in the brand.
I believe that we should give our customer access to a life and style better than anyone else.
And that means mirroring what their need is and how they build up their wardrobe.
We can do that more authentic, with higher quality and with more specialness than anybody else.
And we can also ---+ we should think in new ways and innovative ways of how we can utilize the disruptive world we are in to actually deliver that specialness to the customer in a way that excites and delights them, but also that makes it convenient for them.
And I will come back in late spring with more details.
Let me start with Europe and then I will turn to <UNK> for Polo.
In Europe, we delivered constant currency growth in the third quarter of 8%, so it was a pretty strong performance from a revenue standpoint.
We were disrupted from the terrorist attack in Paris.
We actually had a number of our stores shut down both in France and the UK for a few days and we saw the shopping pullback.
But, it returned relatively quickly after that and so, that's how we were able to deliver a relatively strong result of the 8% constant currency top line growth despite that short-term disruption.
Yes, and when it comes to the Polo Sport question, I tie it to getting closer to our customers.
Given that we are about style and we are going to be the customer's preferred supplier for aspirational style to their wardrobe, it's about getting as close as we can to them.
That's why as one of the underlying business engine that we are going to develop is a consumer insights capability that gives us the possibility to reflect.
If the customer builds their wardrobe on more of an at leisure and sport component, our offering should reflect that.
And it also makes me think about how Ralph has been 10 or 15 years ahead of many macro trends because we were one of the first in the industry several years back, in thinking about sports.
And what we had come to do now is we have to get close to the customer, we have to evolve our offering so we reflect how they want to build their wardrobe.
Yes, let me address those.
The gross margin performance in the third quarter was impacted largely by the US market versus the second quarter, because in the US market, we saw a difficult, as we mentioned in our prepared remarks, fall holiday selling period.
In our fourth quarter guidance, is reflected on the gross margin rate, a plan to increase markdown monies and allowances to clear excess fall and holiday inventory so that we start the spring selling season strong.
I would say, that's really the driver in the gross margin trend in Q3 and Q4.
With regard to FX and hedging, our hedging policy has not changed.
It is consistent and so, we expect at current exchange rates to have a very small to nominal impact on translation next year in FY17, but we will have a transactional impact as we mentioned in the prepared remarks.
The combination of those two, we expect to impact the results by about $90 million negatively as the favorable hedges ---+ we lap the favorable hedge benefit this year going into next year.
Okay, good morning, <UNK>.
Yes.
When it comes to the disruption, I'm a firm believer that we're just seeing the beginning.
I believe that the biggest disruption is that the customer is now in charge.
The customer has better visibility and better choices than ever before.
So, any company that's in the business of providing generic products or don't have any real value add beyond the lower and lower price or who, more importantly, is not close enough to the customer, will be in trouble.
So that's why we are building on the strength that's made us great and we are adding an even closer focus to what's going on in the market and what's going on with the customer.
Yes, thank you, <UNK>.
So when it comes to department stores, they have been very important, you're right, to what has made us great from a business performance historically, and they will continue to be important to us.
And yes, we are focusing in the plan we are building and coming back with the details in late spring, we are focusing on some of the underlying business engines, the [licensee].
Yes, it's early days, but I already see based on my experience that we have a lot of value unlock to do.
So one is how we systematically and repeatable build ---+ how we in a systematic and repeatable way build assortment stronger and stronger.
The results of our supply chain and inventory management component which is, to become much better at balancing supply and demand.
And the results from an expansion strategy, which is to say, how do we grow with quality in all the different channels we have because I believe in that department stores, direct to consumer, are going to play together.
And offline and online are going to play together.
And again, coming back to my own experience, what I have experienced of this to drive a highly profitable global growth strategy.
And, I believe we have opportunities in taking of holistic expansion approach to our brand and our business.
And by doing that, unlock even more brand strength and unlock even more value in terms of driving profitable sales growth.
Okay, thank you all for joining us this morning, and as always, we will be available for follow-up questions after the call.
Thank you.
