Good day everyone. Welcome to the Guess? First Quarter Fiscal 2024 Earnings Conference Call. I would like to turn the call over to Fabrice Benarouche, Senior Vice President of Finance, Investor Relations, and Chief Accounting Officer. Thank you, Operator. Good afternoon, everyone, and thank you for joining us today. On the call today with me are Carlos Alberini, Chief Executive Officer, and Dennis Secor, Interim Chief Financial Officer. During today's call, the company will be making forward-looking statements, including comments regarding future plans, strategic initiatives, capital allocation, and short and long-term outlooks. The company's actual results may differ materially from current expectations based on risk factors included in today's press release and the company's quarterly and annual report filed with the SEC. Comments will also reference certain non-GAAP or adjusted measures. GAAP reconciliation and descriptions of these measures can be found in today's earnings release. Now, I will turn it over to Carlos. Thank you, Fabrice. Good afternoon, everyone. Thank you for joining us today. We are very pleased with our start to the new fiscal year, with first quarter results that highlight the power of our highly diversified business model and the strength of our global distribution. Our team delivered better than expected revenues, operating profit and earnings per share. These results were driven by stronger than expected performance from our businesses in Europe, Asia and from our Americas wholesale segment, which coupled with strong cost controls and improved product margin performance, helped to more than offset softness in our Americas retail business. Our earnings performance against last year was impacted by increased occupancy, COVID subsidies that did not reoccur this year, and the continued negative currency trends. With that said, our team continues to manage the business very effectively, focusing on what we can control and funding our business based on expected customer demand. Paul and I are very pleased with our team's performance. I want to thank everyone for their hard work and valuable contributions. As we look at the different parts of our business globally, our Europe segment continued to outperform during the quarter, posting a 5% increase in revenues in constant currency and 2% in U.S. dollars. The growth was driven by a double-digit increase in comp store sales in the region, partially offset by a revenue decrease in our wholesale business due to early shipments in Q4 of last year of our spring/summer collection. We reported a 14% revenue decrease in our Americas retail business, primarily driven by slower customer traffic and conversion. Based on the softer performance and uncertain consumer spending environment, we are now managing the Americas segment with a more cautious view of the business for the remainder of the year. We have planned for our Americas wholesale business revenues to be down year-over-year due to the timing of shipments, which were heavily weighted to the first quarter in the prior year. While revenues declined 25% for the quarter, this was better than expected. Our Asia business also performed ahead of expectations, achieving a 26% revenue increase and mid-single digit comp sales growth in the quarter as we drove a stronger business in South Korea and the Greater China region reopened post-COVID, which resulted in increased consumer activity. Our licensing business also performed in line with our expectations. The business was driven by the performance of handbags, eyewear, footwear, watches, and fragrances. Our product performance this quarter differed by territory. In the Americas business, as temperatures were below normal seasonal levels, we had success with cold weather products such as sweaters and outerwear, and were challenged with dresses, including Marciano, shorts, denim, and knit tops. In Europe, we saw strong performance across the board with the best results achieved by accessories, driven by handbags, small leather goods, men's bags and jewelry. Women's, men's and kids all posted strong sales growth, with the best product categories being outerwear, dresses, including a stellar performance in Marciano, woven shirts, activewear and pants. In Asia, our best performing categories included footwear, accessories, women's and kids products. As we look around the world at our operating environment today, most markets are impacted to different degrees by lower consumer confidence, high consumer debt and interest rates, increasing costs and higher inventory levels across the industry. Consistent with how our teams have approached operating the business during uncertain times in the past, we continue to focus on those things that are within our control. In line with this approach, we are maintaining a relentless focus on brand elevation, managing inventories tightly and controlling costs aggressively while we also work to capitalize on the multiple growth opportunities that we see for our business. First, regarding our brand elevation strategy, our teams are continuing to deliver high quality products across all categories with a more focused and productive assortment and a commitment to sustainability. Our goal here is to provide a consistent brand representation across all markets through our global line of products and powerful global marketing campaigns, and to deliver extraordinary value to our customers. Embedded in our brand elevation strategy is our goal to maximize full price selling and minimize promotional activities. We expect to accomplish this by buying carefully and pricing every product based on its customer's perceived value. Turning to inventory management, we are committed to reducing our inventory investment with a goal of ending the fiscal year with inventories about 10% below last year. Recall that last year, we had made an early investment in inventory to mitigate delays created by the supply chain disruptions experienced during the pandemic period. This alone represents about four to six weeks of supply in our inventory ownership that we will not have this year, and that will contribute to our goal to lower inventory levels and improve inventory turnover. In addition, we are strictly placing product orders in line with expected customer demand in order to avoid excess buying. Next, we continue to focus on closely managing our variable expenses and working to do more with less, including eliminating redundancies across our operating infrastructure and increasing automation. We are pleased with our cost management performance in the first quarter, considering the inflationary environment we are navigating, and we see opportunities for improvement during the remainder of the year to further reduce expenses, including those for inbound freight, store selling costs, and others. During our previous earnings call, I mentioned the big opportunity that we see to grow the business long term, leveraging our infrastructure and capabilities and the strength of the Guess and Marciano brands. We see an opportunity to achieve this growth over time by prioritizing four key initiatives. First, increasing the sales productivity of the network that we currently own, including our direct to consumer licensing and wholesale channels. Second, growing organically in existing and new markets by opening new stores, expanding existing ones, and gaining new clients. Third, exploring further brand extensions that capitalize on the strength of the Guess and Marciano brands. Fourth, we'll be looking for opportunities that leverage our global infrastructure and our network of licensees and wholesale partners. Speaking about that first initiative to increase the sales productivity of our current network, we have a number of efforts underway this year. Among them, we are increasing the penetration of more casual products and opening price point items in our collections to capture increased market share. We are also strengthening the assortment of our seasonal pre-collection offerings so our wholesale customers can order product earlier and optimize time on floor for each product. We are concentrating our open-to-buys among tighter assortments, so we buy each bestseller item with greater conviction to maximize sales. Finally, we are identifying opportunities to internalize businesses that are currently licensed. We already internalized many retail stores in South Korea that were previously run by a third party. Our results here have been strong. We are now planning to internalize our current licensed business with G-III, consisting of design, development, and distribution of outerwear and dresses in North America. These are businesses that represents $50 million annually at wholesale. We think that we can run these businesses internally and more profitably, as these are categories that we are already developing and distributing, and they represent big businesses currently for us. As a result, we will not be renewing our license with G-III, which expires this coming December. At the same time that we are directing efforts towards brand elevation, inventory, and cost management, and future growth opportunities, we are also ensuring that we have ample financial flexibility to support our business effectively and return value to our shareholders. The recent refinancing of our convertible bonds provided us with additional capacity and extended maturities for our debt. We have a strong capital structure, and we expect to generate about $150 million of free cash flow this year. Regarding returning value to our shareholders, we recently repurchased 2.2 million shares of our stock, resulting in a cumulative repurchase of over 34 million shares since early 2019, representing over 40% of the then shares outstanding, and a cumulative investment of $600 million. Today, we announce that our board has approved an increase to our quarterly dividend of 33% from $0.225 per share to $0.30 per share. This demonstrates the confidence that we have in our diversified business model and our ability to leverage its power to sustain strong cash flows in the future. Looking out to the rest of the year, we remain confident in our business and the plans that we are executing against. As a result, we are reaffirming our positive outlook for the fiscal year. We continue to see top-line growth in the low single digits, solid profit performance, and strong cash flow generation. Dennis will dive more into the details of our outlook for the second quarter and the second half of the year in just a moment. Before I turn the call over to Dennis, I want to comment on our chief financial officer transition. As you know, we recently announced that Markus Neubrand will join Guess? as our new CFO. We are excited to welcome Markus into our team. He brings a strong background to the role and very relevant experience from his successful 17-year career at Hugo Boss. As you know, Dennis will remain with us through March of next year to support a smooth transition, and I appreciate all his contributions to our company and our team. I would also like to take this opportunity to congratulate Fabrice on his recent promotion and expanded responsibilities. We are very fortunate to have a strong finance team in place as we continue to execute on our growth strategy moving forward. As I close today, I would like to reflect on the strength of the business and the position of our brands in the global consumer and retail market. During my first 10 years with Guess?, between 2000 and 2010, I was part of an exciting journey where the business grew and evolved steadily and very profitably, creating significant value for our shareholders. As we grew into multiple businesses, products, and geographies, the business model became very rich, like a puzzle where each piece contributed to the success of the whole and helped leverage mutual synergies. Paul envisioned this big puzzle first, and he worked very hard with our global teams to execute an ambitious plan to make that vision a reality. This work is ongoing. I couldn't have imagined four years ago when I returned to Guess? how much the business and the world that we operate in would continue to change. Throughout the history of the company, our team has embraced change head on, and our team today has adapted to a new world of shopping, a new way of working, and how we prioritize and live our lives. Today, our company operates in over 100 countries, capitalizing on a true multi-channel distribution, developing and selling products across 25 different categories, and depending on an amazing global team of 12,500 associates and numerous exceptional licensees, landlords, and wholesale partners. Our model is highly diversified and is capable of delivering superior returns on invested capital. Our brands have strong momentum, and we see abundant opportunities for growth to make the puzzle much bigger. Most importantly, we have an exceptional leadership team, highly capable and greatly committed to delivering excellent results. We have done it before, we will do it again. Personally, I feel incredibly fortunate to be part of this exceptional team once again, working in partnership with Paul, our great leaders, and the rest of our dedicated team. Together, we are determined to leverage the strength of our highly diversified business model, drive continuous growth, and deliver strong returns to our shareholders. This combination gives me strong confidence in our ability to realize the potential that lies before us, and that is why I couldn't be more excited about this next chapter of our journey together and can't wait to report on our progress to you in the future. With that, let me pass the call to Dennis. Dennis? Thank you, Carlos, and good afternoon, everyone. Total company revenues were $570 million in the quarter, a 4% decline from last first quarter and a 2% constant dollar decline. You may recall that we had expected our Q1 revenues to decline due to changes in wholesale shipping patterns in both Europe and North America and continuing currency headwinds. In the quarter, those two factors, along with the negative U.S. store comps, more than offset strong international sales comps and net new store sales. Turning to our regional performance for the quarter, starting with Europe, where we posted a 5% constant currency revenue increase and a 2% increase in U.S. dollars. The revenue growth was mainly driven by strong retail store comps, partially offset by lower wholesale shipments. The relatively stronger U.S. dollar compared to last year's first quarter also negatively impacted U.S. dollar revenues. Our stores in the region posted a 17% constant currency comp increase in the quarter, driven by continued strong store traffic and AUR growth, more than offsetting a modest conversion decline. As in the past few quarters, Turkey's hyperinflation had an outsized impact on the comps, and excluding Turkey, that comp increase would have been 12%. In European wholesale, as we shared on our last call, the changes in the shipping calendar benefited last year's fourth quarter at the expense of this year's first quarter by roughly $25 million. Absent that shift, European wholesale revenues would have grown in the high single digits. We've also completed our campaign for the fall/winter 2023 collection, where orders finished down 2% compared to the prior year's fall/winter campaign, aligned with our initial expectations. European operating earnings decreased 91% or roughly $16 million - $2 million. The operating earnings change was most significantly impacted by the wholesale revenue shift and by the impact of $9 million in COVID-related expense subsidies that were recorded in last year's first quarter that did not reoccur this year. Excluding those two items, we estimate that the region would have delivered operating earnings that were flat to last year's Q1. European operating margin declined 590 basis points, half of which resulted from the elimination of those COVID subsidies. Also affecting operating margins were significant currency headwinds in product margins, which nearly offset a substantial IMU improvement. Higher retail selling expenses given pressures on our cost structure in the quarter. In Americas Retail, revenues decreased 14% in U.S. dollars and 13% in constant currency. In our U.S. stores, we are experiencing pressure on our traffic and conversion. Americas Retail comps declined 12% in constant currency, driven by that lower traffic and conversion, partially offset by a higher AUR. Our stores in Canada, which enjoyed strong traffic gains all of last year as they fully emerged from COVID restrictions, have now lapped that post-COVID tailwind. Our North American e-commerce business performed similarly to the store fleet. Americas Retail posted a $3 million operating loss compared to a $14 million operating profit a year earlier. Operating margin declined 10.9 points, driven mainly by the deleveraging of expenses given the sales decline, higher store occupancy expenses, and a lower mix of full price selling. In Americas Wholesale, revenues declined by 25% in U.S. dollars and 26% in constant currency. The timing of deliveries last year yielded an abnormally high level of Q1 revenues, which we anniversaried this first quarter. While our U.S. wholesale partners continue to tightly manage their own inventory levels and limit their receipts, we do expect the top line headwind in this business to abate as we move through the fiscal year. Operating profit declined 25% and operating margin remained flat with last year, as gross margin expansion was offset by deleverage on our cost structure. In Asia, revenue grew 26% in U.S. dollars and 34% in constant currency. The growth was driven primarily by the impact of the direct operation of some of our stores in Korea, as well as positive comp store sales in both Korea and China. Comp store sales for the region increased 6% in constant currency. Operating profit increased $7 million from an operating loss of $3 million to an operating profit of $4 million. Operating margin improved 11.6 points to 5.4% given the direct operation of those new Korean stores, as well as leverage over our expense structure. Finally, in our licensing segment, royalty revenues declined 10%. Segment operating profit was $22 million, a $2 million decline from last year's Q1. In the quarter, total company gross margin was 40.7%, a contraction of 90 basis points, which approximates the negative currency impact on our product margins. Improved IMUs were offset by a higher level of markdown sales. Adjusted SG&A for the first quarter increased 12% to $230 million. A significant driver of the expense increase was the COVID-related government subsidies I mentioned earlier. Roughly $9 million that we received last year as a reduction to expenses did not reoccur in this quarter. We're also experiencing inflationary pressures on our cost structure, including higher selling expenses in our retail stores and are making investments in our infrastructure, most notably in Europe. In addition, we've recorded higher performance-based compensation accruals in the current quarter versus a year ago. Partially offsetting those factors was a $5 million favorable currency impact. For the quarter, our Adjusted SG&A rate increased 580 basis points to 40.4%. As planned, our first quarter adjusted operating profit declined from last year's first quarter, down $40 million - $2 million. Our first quarter adjusted operating margin was 0.3%, 670 basis points lower than last year's Q1. Currencies had a negative $7 million impact on adjusted operating profits and represented a 120 basis point headwind to the adjusted operating margin. In the quarter, we recorded non-operating net expense of $3 million versus a $16 million charge last first quarter. This includes charges on the revaluation of certain of our foreign subsidiaries' net assets and liabilities into U.S. dollars, and net charges to mark our deferred comp plan and SERP plan assets to market. In the first quarter, we recorded a minimal adjusted tax benefit, yielding an adjusted tax rate of roughly 0%. Adjusted Q1 diluted loss per share was $0.07 compared to $0.24 of earnings per share in last year's first quarter. Moving now to the balance sheet. We ended the quarter with $299 million in cash compared to $148 million a year ago. The most significant drivers of that $151 million cash build over the last four quarters include $126 million of free cash flow, net draws on our credit facilities of $73 million, partially offset by $52 million in dividends. We ended the quarter with a total of $297 million of borrowing capacity on our various global facilities, so nearly $600 million of available liquidity. Inventories were $529 million, up 9% in U.S. dollars and 8% in constant currency versus last year. Regionally, our inventory growth comes from our international markets, with our North American inventory levels being down against last Q1. Our overall inventory growth primarily reflects the residual effect of last year's strategy to order product earlier to mitigate supply chain constraints. With supply chains recovering, over the last few quarters, we have begun to reduce this earlier inventory investment. As we return to a more traditional receipt plan this year, our plan is to further reduce our inventory levels, as Carlos mentioned. Overall, we're pleased with our inventory composition and forward orders and feel we're well-positioned to support our business moving forward. Our receivables were $286 million, a 3% decrease versus last year's $295 million. On a constant currency basis, receivables decreased about 5%. For the first quarter, capital expenditures were $17 million compared to $29 million in the prior first quarter, mainly driven by investments in remodels, technology, and new stores. Free cash flow for the first quarter was a $31 million consumption of cash versus an $85 million consumption for the prior first quarter. The improved free cash flow resulted from a higher retail mix where the order to cash cycle is shorter, a lower inventory investment and lower capital expenditures, partially offset by the change in earnings. As Carlos referenced, the company refinanced the majority of its $300 million outstanding convertible notes, extending those maturities for another four years. In this transaction, we issued $275 million in new convertible notes maturing in April 2028. We used the majority of the proceeds to retire $185 million of our existing convertible notes, which leaves $115 million of those notes maturing in April 2024. The new notes bear interest at 3.75% and carry an initial conversion price of our common stock of $24.70 per share. In addition, we also entered into a call spread agreement, which will have the effect of mitigating any dilutive effect of those notes up to an initial share price of $41.80 of our common stock. These initial conversion prices are subject to customary adjustments in the future, including changes to future dividends beyond $0.90 per share per year. The dividend increase we announced today will further impact those initial conversion prices. Concurrent with the convertible note transaction, we also repurchased 2.2 million shares of our common stock at a price of $19 per share. These various transactions yielded roughly $8 million in cash to the company. We are very pleased with the transaction, which carries a very modest coupon. With this transaction now complete, coupled with the European and U.S. facilities that we put in place last year, both with 2027 maturities, our capital structure and sources of capital are well established for the next several years. Now let's talk about our outlook for fiscal 2024 and the second quarter. Our diversified business model allows us to leverage the strength in the areas of our business that are performing well to offset the parts of the business where we see some risk. In Europe, we see further opportunities for strong performance over the balance of this year. Asia, while still a relatively small part of our business, is also expected to perform well, particularly given China's reopening and our business in Korea. In our American wholesale business, Mexico continues to perform well, even as U.S. wholesale accounts continue to manage their inventories carefully. Our American retail business remains challenging. U.S. traffic headwinds persist and customers appear to be very prudent in their spending. We had been expecting to recover some of the markdown pressure that impacted last year, but there is now more risk to that if the current environment persists. Mitigating that, however, we feel there are further cost improvements that we can make in our supply chain as freight and other more recent cost pressures abate. We do not see any material changes to the outlook that we provided at the beginning of the year. We expect to deliver a similar level of operating profit to what we previously shared with slightly higher revenues on slightly lower margins. For the full year, we now expect U.S. dollar revenues to grow in a range between 2% and 4%. For the full year, we expect adjusted operating margin in the range between 8.2% and 8.8%. We have adjusted our outlook to reflect both higher interest expense associated with the refinancing of our new convertible notes and a lower share count given the shares repurchased in the quarter. For the full year, we expect Adjusted EPS in the range between $2.60 and $2.90 per share. For the second quarter, we expect U.S. dollar revenues in the range of a 1.5% decline to flat versus last second quarter. This includes another, though smaller, delivery shift in European wholesale shipments into Q3 and a modest currency tailwind based on prevailing exchange rates. We expect adjusted operating margin between 5.2% and 6% and Adjusted EPS in the range of $0.35-$0.42 per share. I want to highlight a few items that are significantly impacting our growth rates this year. At prevailing exchange rates, currency translation headwinds should finally reverse and become tailwinds starting in Q2 and most significant in Q3. The change in wholesale delivery timing in North America, but most significantly in Europe, will represent a strong headwind in the first half of this year, with a modest turn in the second half. Finally, this year includes an extra week in the fourth quarter. All combined, those should collectively drive roughly a 4-point headwind to first half revenue growth, reversing to roughly a 5-point tailwind to second half revenues. For the full year, currencies should represent roughly a 1-point tailwind, with the 53rd week benefit offsetting the wholesale timing changes. With respect to operating margin trends, we continue to expect that the fourth quarter should represent our most significant opportunity for operating profit growth and operating margin expansion, given the extra selling week and that by then we will have already anniversaried significant inflationary cost pressures. Lastly, on capital allocation, we are on track with our plan to improve inventory turns with supply chains now functioning more normally. Coupled with our outlook and this year's lower CapEx plans, we are well positioned to generate free cash flow of roughly $150 million. Before I close, I'd like to thank Carlos and Paul for the opportunity to be a part of this incredible company once more. You and your teams have built this amazing business model that's so diverse, flexible and resilient and able to deliver strong results in so many different environments. I think the strong performance over the last four incredibly challenging years is a testament to the power of this diverse business model to flex and deliver consistent results in the future. Now with capital in place for the next several years, I understand the confidence that you and the board feel to reward the shareholders with this strong dividend increase. I look forward to supporting you, Markus and Fabrice during this transition, and I wish you and the company great success in the future. With that, we can now open the call up for your questions. Thank you. To ask the question, you will need to press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again. Please stand by while we compile the Q&A roll. Our first question comes from the line of Corey Tarlowe with Jefferies. Please proceed. Hi, can you hear me? Yes. Yes, we can hear you, Corey. How are you? I'm doing well, thanks. Thanks for taking my question. Carlos, maybe if you could just firstly talk about the consumer. You made some high-level comments in your prepared remarks about the health of the consumer globally. I was wondering if you could maybe provide a little bit more detail about what you're seeing from the consumer, how the consumer is responding to the brand, maybe digitally and in stores and regionally as well, really just helpful to get a high level view from what you're seeing with regards to the health of the consumer? Yeah, sure, Corey. I think that what we are seeing is different performance and different levels of customer traffic in the different regions. Obviously, customer traffic is what's driving a lot of the activities inside the stores and even online. Starting with North America, we came into the year with an expectation that the business was gonna be reasonably consistent with what we had seen closing last year, which was very healthy and with a lot of strength both in customer traffic and also we're seeing that the customer was responding well to our pricing structure. You know, we had made significant adjustments to pricing, and all that was being embraced, you know, accordingly. Coming into February was probably our best month last year, and we came into February, and we had a pretty, you know, challenging situation with customer traffic. Initially, we thought that it was more a function of the comparison to last year's strength. The business, while it got a little bit better, you know, in the months of March and into April, you know, we never recovered to the levels that we had anticipated. We are being very cautious in the way we're seeing the consumer in North America, and for that reason, we are taking a more cautious approach to the outlook. Just we feel that the product was right and is right. Unfortunately, the weather, we think, played a role here. You know, it, we don't like to blame the weather for anything. In this particular case, temperatures were below normal. We saw that the more colder types of product categories outperformed, so kind of confirming that the weather definitely played a role. We have a plan in place looking at the future and thinking about what can we do to really improve, you know, both conversion rates and increase units per transaction as is possible without being highly promotional. We want to stay with our key elevation strategy. That represents a, you know, big commitment to not being very promotional. We think that that customer is price sensitive right now. We can see it in the way they are shopping. We saw a very similar trend online except for, you know, just our full price business online is having more traction now, but this is more recently. You know, the beginning of the quarter was as difficult as well. We think that the same consumer is also price sensitive, you know, digitally. You move to Europe, and the situation is very different. You know, we see great traffic into our stores. We are, you know, the comps that we recorded in the first quarter were super strong. We see a lot of opportunity to continue to grow the businesses as we go into the back of the year. I mean, of course, what we read is that there is risk of to the consumer and consumer sentiment. Frankly, we haven't experienced that in our businesses. The same thing is true for our online business, which, you know, it's it did not grow at the rate that we saw our stores, but it did grow. Asia has been a surprise for us. A very good surprise because we exceeded our expectations in multiple markets. The more significant one in terms of size and magnitude was South Korea that did a lot better than what we had anticipated. We're also seeing traction and life in China. I was in China not too long ago, and we are very excited about the opportunity there. Of course, the market is huge and if we think that the brand is well perceived, and we think that we have opportunities to do better with products, so we are working hard on that. The team is a very strong team there, and they're working nonstop to really looking for the opportunities and the ways to capitalize on those. We think that we can see that we can get some momentum in that market. You know, overall our licensing business continues to be strong. We were pleased with our performance. You know, it was slightly down, but overall, it was pretty much in line with our expectations and it's a phenomenal, you know, fortunate thing that we have, you know, a very strong licensing business, pure cash flow. This is also feeding our opportunities to generate the $150 million of free cash flow that Dennis spoke about. That's great. Could you also talk a little bit about what you're seeing from an inflation standpoint? Freight costs seems like they've gotten better. What are you seeing on commodity costs? It sounds like FX also, which had been a pretty considerable headwind. It sounds like at the very least in the second quarter, it's actually flipping to be a tailwind. If you could just maybe talk a little bit about those dynamics and a little bit more color, that would be great. I'll just touch on freight and then, Dennis, you know, if you can touch on the other factors. You know, just freight has been a major benefit for us so far in the first quarter, and we expect that that will continue as we see rates coming down because capacity has been impacted or was impacted significantly last year, as everybody knows. Now things are, you know, finding a more balanced situation and very similar to what we saw pre-COVID. We are pleased with that, and we are benefiting from that. Dennis? Yeah. On, on currencies, you know, it's a, this year is a little unusual in that we're going to see, if you remember, that currencies affect us in a couple of different ways. What's turning now is the translation impact, so we should start seeing tailwinds in our revenues. It also affects our expenses. The margin will still be a drag this year, largely because we're affected by the currency contracts that we have in place. You know, overall, what we're expecting is about a 50 basis point impact on the year overall for the currency impact on our margins. If you think about, though, the trend that we are expecting to see in the margin structure sort of quarter- to- quarter, you know, this year or this quarter, we were down 670 basis points. Some of that is unique to the quarter, like the loss of the subsidy benefits that we had last year. You know, currencies is still a headwind, but that should start to narrow as we move through the quarters. The second quarter overall margin headwind is about half of the first. It narrows even more in the third, and then the fourth quarter is our opportunity for both margin expansion and profit growth. Some of that is also driven by the fact that by the time we get to the end of the year, we will already be lapping some of the cost pressures that we've been seeing built into our cost base. you know, it will narrow, and the goal is to see it turn by the fourth quarter. Coming back to part of your question, Corey, about other commodity prices and so forth. You know, our inventories at the end of the quarter were up 9% in U.S. dollars and up about 8% in constant currency. Some of that increase, which was primarily outside the U.S., you know, we were down in the U.S. A part of that increase was due to increases in average unit cost of the product that we have. Of course, some of that is the reflection of inflationary pressures that we have been experiencing like everybody else, and the currency impact that is also weighing on that. We are seeing a nice recovery in our sourcing. As a result, we are expecting to see, you know, beneficial moves in our IMU. Also, I think it's important to note that a lot of the increase in cost is a reflection of improved quality that we are putting into the product and our very tight focus on sustainability. You know, if you take those two factors and then you think about the increase in cost item for item, we're talking about 65% of the increase is coming from investments in those two big factors, you know, quality and sustainability. Overall, we like where we are and we're seeing a much more balanced, you know, model now, as things, you know, in the global markets are becoming a lot more reasonable. That's very helpful. Thank you so much, and best of luck. Thank you, Corey. Thank you. One moment for our next question, please. It comes from the line of Dana Telsey with Telsey Advisory Group. Please proceed. Hi. Good afternoon, everyone. Carlos, you mentioned about obviously the Americas and what's happening on the retail and wholesale side. How do you think about the difference between the two channels, whether it's in traffic and sell-through, the need to be promotional? What are you seeing from the wholesale accounts in terms of order placement, order bookings versus chasing? Lastly, with the elimination of G-III, how important was that to the licensing business, and what does this mean for your other licensed partners also? Thank you. Thank you, Dana. How are you? Thank you for your questions. Well, starting with retail versus wholesale, you know, just, the businesses are very different and especially in North America, but this is also true in Europe. The customer base, you know, has contracted over the years in terms of wholesale and our business has contracted accordingly. You know, it's still a business that we care greatly about and is very profitable and we, you know, always think about ways to continue to grow. We have good partners in that business, and we are working with them to try to optimize their business. Unfortunately, some of these accounts, you know, have been very careful with the way they are buying inventory, and in many cases, canceling orders. That is something that is very difficult to navigate through, once we own the inventory. You know, just to see a cancellation at wholesale is very painful. We are being very careful in the way we order. We are ordering tightly and also trying to pick our battles on the type of inventory that we think is still gonna be demanded, you know, even if we don't have live orders, and making some investments in those types of products. The with respect to our retail business, you know, we continue to use the same approach that we have been using even during COVID times, where we are always obsessively looking for what the expected customer demand would look like, and then buying accordingly. We don't want to buy excess. We are trying to position our businesses in such a way that we can chase. That's something that as we pursue more nearshoring and having, you know, access to fabric and factories or vendors close by, we can respond more effectively. You know, just overall, I think that the business is a little bit more challenging, but it also offers significant opportunities, and we want to take advantage of those. With respect to G-III, you know, just these are two categories, you know, I'm talking about outerwear and dresses, where we have tremendous expertise. This expertise was developed over the last few years. You know, frankly, when I came back to Guess, you know, I was super surprised with the size and the significance of the outerwear business. That was something that in my earlier years, we didn't have that expertise. But now we do, you know. We make over 1 million units of outerwear a year, if you can believe that, globally. That generates sales of over $100 million at wholesale value. It's a very big business for us. Absorbing this additional business would be very reasonably practically not easy, but, you know, there's always a challenge in these things. We feel that we are completely capable. On dresses is even a more extreme example. You know, we make over 2 million dresses a year, you know, and that generates over $150 million at wholesale in sales. Absorbing the dresses categories is definitely gonna be easy, that one. With respect to the impact on licensing, you know, just if you think about a 7% rate, you know, normally, you know, just and, you know, we mentioned that the business was about $50 million at wholesale, so you can do the numbers. I should note that, of course, we knew about our intentions and, the outlooks that we have provided already exclude, the impact of this, transition. Thank you. Just, when you talk about categories, Carlos, is denim improving at all? What are you seeing in denim? You know, actually, it's a, it's not like a huge trend, you know, across all the businesses, but we put a lot of effort in improving our assortment of denim, you know, trying to really capture, you know, new trends. I think that the assortment looks a lot better and powerful. We are seeing pockets of success, especially in our full freestanding stores in North America. We're seeing really good success with denim. We're seeing it online as well. You know, some of it is also impacting our business in Europe. It's not just about jeans, you know, or pants, but also other denim products like rompers, like, you know, denim jackets. We're seeing some, you know, great success in men's as well with a few styles. It's, we think that this is just the beginning. We are excited about, you know, this category in the whole casual world because we think that this can help us also expand our reach and response with the younger customers. We're super excited about denim. Thank you. Thank you, Dana. Thank you. One moment for our next question, please. All right. It comes from the line of Eric Beder with SCC Research. Please proceed. Good afternoon. Hi, Eric. Welcome back. Hi. You have this basically global now fashion offering. You know, how has that enabled you to be more aggressive or more conservative when you have such different shifts here in terms of the U.S., Europe, and Asia? How has that change allowed you to be more aggressive or flexible to take advantage of that? Yeah. No, it's a great question. You know, just as you know, from your earlier years with the company, you know, just we struggled with this huge idea of launching a global line of product. Because, you know, we were not very sure as to if we were gonna be able to service the market needs, you know, effectively if we had only one source of design, inspiration, product development. And we have been very, very happy with the results because it's it has been consistently performing well across the different territories. And of course, one of the big objectives that we had was to develop a line of product that could represent the brand consistently across markets. That's what we have today. We, there is a tremendous amount of work that goes in during the development of the line and then, when the line or the collections are launched. At that time, you know, there is a lot of work that is being done to decide from the line, the assortments that are gonna be represented in stores and also what's gonna be offered at wholesale. In this exercise, you know, there is a lot of participation from the buyers, the merchants, the designers, you know, Paul is at the center and at the forefront of all this. There are and there is significant input from the different countries, country merchants that we have that are specific to each of those markets, you know, have the opportunity to voice their opinions on the line and what they want to buy, and they have the opportunity to weigh in into how that line is gonna be bought. Overall, I think that the reason why we are being very successful with this is because there is a lot of involvement from the people that know the markets best. You know, these country merchants are experts in their markets, and by looking at the collection and they can come up with an assortment that they know is gonna work for their market. If anything, we are seeing even better performance from the line. In some cases, there is also additional development to represent and to address the market needs that each of these groups, you know, are voicing, is required. Overall, I think that for that reason, also all the campaigns, the marketing campaigns, are featuring the key stories, you know, per Paul. You know, Paul says, "Okay, I believe in this. This is what we are going after in a big way." And those campaigns are completely coordinated with how the product is gonna be developed and launched and presented in stores and even at wholesale. you know, just, the customer can see a complete correlation between what they see in the pictures, images, and what they see in the stores, and on the website. No, that's a great point. Thank you. When you look at... I know at the same time you've also cut down on number of manufacturers that you have relationships with. Is that something that you should be able to leverage even more now that we are seeing lower freight costs, lower pricing for some raw materials? Do you look upon that as a potential driver here for this year and going forward in terms of being able to get better efficiencies from that? Yeah. Eric, you know, we have done a lot in this area. You know, just now the also as we have a global line of product for all product categories, we also have a global group, a global team that drives all these activities. You know, this team is based out of Lugano in Switzerland and they're doing a great job. Probably one of the first big exercises were to really contract the vendor base. You know, we went from about 535 vendors when I came here and this project was launched to we were slightly over 100 vendors, you know, very recently. You know, we may have a few more coming just because of this initiative to really place a lot of vendor sources close to the distribution where we're gonna have distribution of the product. By doing that, we may stretch a little bit, you know, more the vendor base. We think we are in a great place. I mean, considering the complexity of our business and how many product categories we do internally, to be able to really count on slightly over 100 vendors to be able to do all that with the number of units that we handle, I think is a huge success story. As a result, you know, you are absolutely right that as we consolidated, you know, global vendors and global production, we have been enjoying a, you know, much better costing as a result of the increased volumes. Okay. Last one from me. In Europe, in terms of Europe, you know, you talked about G-III as an expansion opportunity, taking back some licenses. Where do you look at in terms of physical territories? Maybe not taking back, but where do you want to expand the store base, where you believe there's opportunities to grow that store base. That's it. Thank you. Yeah. Thank you, Eric. You know, just we are being very careful in the way we are using capital and targeting, you know, just the use of capital based on potential return on invested capital. We are pretty well developed in several countries and markets, but, you know, we have very strong talent in each of those markets. There is a process that we follow internally where the country managers can come with their proposed, you know, new store openings plans. We do this in a very disciplined way. Then there is a whole process that we go through to make those decisions. You know, just there are several pockets of opportunity. You know, this is a highly fragmented region. You know, when you think about Europe, there are so many different countries and markets. The great thing is that the brand is very well known across all those markets, so there is further opportunity to continue to expand. We're being very careful with expansion. Great. Good luck for the rest of the year. Yeah. Thank you so much, Eric. Thank you. One moment for our next question. Okay, I'm showing Corey Tarlowe with Jefferies. Please proceed. Please check your mute button. Yeah, no further questions from me. Thank you. All right. Thank you, sir. With that, I will pass it back to management for final remarks. Oh, thank you, Operator. Well, thank you everyone for joining us today, and thank you for your participation. You know, we are pleased with the start of the year, and we are excited about our future. I believe that our results this past quarter, but, you know, over the last few years actually, they highlight the power of our highly diversified business model. They also highlight the strength of our brands and the global distribution that we have. I believe that we have a very good plan for the year, and I think that we are well positioned to capitalize on our many growth opportunities, and we are prepared to do that. We look forward to speaking with you again soon and want to wish you a great Memorial Day weekend. Thank you for your participation today. Thank you, ladies, and gentlemen. With that, we conclude our program. Thank you for participating, and you may now disconnect.