Thank you for standing by. Welcome to the Ralph Lauren Q1 Fiscal Year 2022 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. If you should require assistance during that call, please press *0. As a reminder, this conference is being recorded. I will now like to turn over the conference to our host, Ms. Corinna Van der Ghinst. Please go ahead. Thank you for joining Ralph Lauren's Q1 and Full Year Fiscal 2021 Conference Call. With me today are Patrice Louvet, the company's President and Chief Executive Officer, and Jane Nielsen, Chief Operating Officer and Chief Financial Officer. After prepared remarks, we will open up the call to 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. 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. Now, I will turn the call over to Patrice. Thank you, Corie. Good morning, everyone, and thank you for joining today's call. As we close out this fiscal year, Ralph and I are proud and inspired by the way our teams have navigated through the pandemic. They have demonstrated their resilience, agility, and ongoing passion for our brand and our consumers in a year unlike any other. Their commitment and execution shine through in our better than expected Q4 results. Against the volatile backdrop of the past year, we took action that has enabled us to emerge from this period a fundamentally stronger company than when we came into it. This includes, first, across all three regions, we accelerated our work to elevate our brands while also strengthening and simplifying our brand portfolio. We're also engaging more meaningfully with consumers and driving increased marketing to deliver higher brand awareness and purchase intent, coupled with higher AURs. Second, we repositioned each of our channels and reduced our exposure to secularly challenged areas of distribution, particularly in North America. Within wholesale, we focused our brick and mortar presence on our healthiest stores and significantly reduced our off-price penetration. Within direct to consumer, we accelerated our shift to digital, step changing profitability by over 1,000 basis points as we added new connected retail capabilities and drove quality of sales. Please stand by. Your conference will resume momentarily. Good morning, and thank you for joining Ralph Lauren's Q1 fiscal 2022 conference call. With me today are Patrice Louvet, the company's President and Chief Executive Officer, and Jane Nielsen, Chief Operating Officer and 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 I nvestor Relations website. Now I will turn the call over to Patrice. Thank you, Corie. Hey, if there's one thing we've learned over the past 18 months, it's agility and the importance of agility, so apologies for the false start. We're ready to go into our prepared remarks. Good morning, everyone, and thank you for joining today's call. Our teams delivered exceptional Q1 performance on both our top and bottom-line results and across every geography. Our brand is resonating with consumers around the world as we lean into the breadth of our offering to deliver the products they are craving in this new normal. All of our regions are on a healthier, more profitable growth trajectory. Even as we continue to execute through COVID-related challenges, it is clear that Ralph Lauren is back on offense. A few highlights to note. First, building on our consistent brand elevation work in direct-to-consumer business, we are now seeing accelerated demand and increased AUR in our wholesale channels. Second, our digital growth is accelerating following our pricing and promotional reset work last year. Our digital margins continue to be accretive across every region. Third, we continue to make strong progress toward our long-term target of mid-teens operating margins. We delivered the highest Q1 company operating margin since fiscal 2014, even as we more than doubled our marketing investment and continued to reinvest in key areas of growth like digital, key city ecosystem expansion, and our consumer targeting and personalization. Our performance demonstrates consistent execution against the five strategic pillars that we outlined at the start of our Next Great Chapter plan. Let me share a few highlights from the quarter. First, on our efforts to win over a new generation. As we continue to invest in marketing, we are focused on new consumer acquisition and retention, and both global and localized campaigns that capture consumers' optimism and desire to come together as we progressively emerge from the challenges of the past year. Some of our key campaigns in the Q1 included our Summer of Sports, which we kicked off with our Olympics campaign in North America as the official outfitter of Team USA. In June, we amplified our Wimbledon campaign with a diverse group of athletes, celebrities, and influencers, such as South Korean superstar and Tottenham forward Son Heung-min, British pro surfer Lucy Campbell, and G2 Esports League of Legends superstar Rekkles. In the world of golf, we celebrated our brand ambassador Yuka Saso's first major win at the U.S. Women's Open, we were excited to welcome LPGA professional golfer Andrea Lee as the newest face of our women's golf brand. Combined, these summer sports campaigns generated more than 8 billion total impressions globally in the quarter. There's still more to come in August and September with the 2021 Ryder Cup and the U.S. Open Tennis Championships right here in New York. We also announced our launch this quarter as the official outfitter of G2 Esports, one of the world's premier professional esports organizations. We are proud of this first-of-its-kind partnership in fashion and gaming as we continue to drive new ways of reaching next-generation consumers in key channels where they engage. In all, we added more than 1 million new consumers to our direct-to-consumer channels alone this quarter, and our total social media followers continue to grow, exceeding 46 million globally, led by Instagram. This takes me to our second key initiative, energize core products and accelerate high-potential underdeveloped categories. As markets reopen around the world, consumers are shifting back to many of the key categories that drove our business prior to the pandemic, while we also continue to develop new and high-potential categories. Casual styles are still resonating, we're also seeing a progressive return to sophisticated casual. Given the breadth of our assortment, we have the unique ability to respond to consumer shifting appetite, reintegrating more elevated styles into our assortments as we scale back on stay-at-home categories. On the men's side, we're seeing a resurgence in Polo shirts, sport coats and trousers, denim, footwear, and accessories for our core brands. In women's, we're seeing improvements across dresses, elevated sweaters, novelty fleece, jackets, and handbags. We're also driving better performance in bottoms, including new fashion silhouettes like wide leg, as well as new fabrications like silk and linen. We are rebuilding the penetration of these categories into fall 2021 and beyond as consumers make the transition back to the office and social activities. Our spring performance gives us increased confidence that we will have the right assortments to meet consumers' needs moving forward. Other product highlights from the quarter included our first of several special collections with Major League Baseball. These limited capsules celebrate the heritage of America's favorite pastime and evoke Ralph's lifelong love of the sport. Launched in May across all of our channels, including social, digital, our stores, and wholesale, the initial capsule generated over 5 billion media impressions, along with significantly higher spend compared to our average Polo consumer. Our spring Polo shirt campaign included the launch of our Polo Color S hop, fully made to order customized polos, and our updated Earth Polo in expanded colors. We launched Polo Cologne Intense, an updated fragrance for a new generation, and our new Stirrup eyewear collection as we continue to elevate and innovate across our licensed categories as well. Moving on to our third key initiative, drive targeted expansion in our regions and channels. With most of our key markets now fully reopened, we are back on offense this year with the build-out of our brand-elevating key city ecosystems around the world. This ecosystem approach ensures a consistently elevated experience across our digital, social, and physical channels, both in our direct-to-consumer and wholesale networks. As part of this, in the Q1, we opened 18 new stores and concessions in priority locations globally, mostly in Asia, and closed 11 locations. China continues to be a significant long-term growth opportunity, and our ecosystem approach delivered strong growth again this quarter, with mainland sales up more than 50%. We are opening two new emblematic store experiences this year in Beijing and Shanghai. With a smaller footprint than our existing flagships around the world, this new format offers consumers an elevated, immersive brand experience at a significantly lower investment than our traditional flagships. Our Beijing store opened at the end of April in Sanlitun Mall, one of the top shopping locations in the country. In addition to featuring a Ralph's Coffee, Sanlitun integrates innovative, smart retail, and digital activations throughout the store in partnership with Tencent. This includes endless aisle technology, virtual try-ons, an in-store treasure hunt using QR codes, and customization stations, where consumers use our WeChat mini program to order customized products from their mobile phones. Though still early, the store has significantly outperformed our initial expectations, and we're excited to build on our presence in China with the opening of our emblematic Shanghai location in just a few weeks. Both stores will immerse consumers in the world of Ralph Lauren and will help further develop our ecosystems in these key markets, which already include our smaller format Polo boutiques, concessions, and digital presence across our own site and key partners such as Tmall. As foreign tourism continues to be a headwind compared to fiscal 2020 levels, we have shifted more of our marketing, clienteling, and merchandising to capture local shoppers and regional tourists, along with driving digital commerce. This takes me to our priority of leading with digital. Our global digital ecosystem, including our directly operated sites, department store dot-coms, pure players, and social commerce, accelerated to more than 80% growth in the Q1 in constant currency, up from about 60% in Q4. While traffic is starting to return to physical stores, the strength in digital is exceeding our expectations, driving a benefit to our overall operating margin mix. North America drove the biggest improvement this quarter, increasing more than 50% across both owned and wholesale digital channels. Meanwhile, Europe and Asia momentum continued with growth of more than 100% in each region in Q1, led by our wholesale digital and pure-play channels. Our investments in digital continue to focus on content creation for all of our platforms, enhance digital capabilities to improve the user experience, and continuing to leverage AI and data to serve our consumers even more effectively. Touching on our work to operate with discipline to fuel growth. We continued to drive expense discipline in the Q1 in order to fund our long-term strategic investments in global expansion, digital, and brand building, while also working toward our target of mid-teens operating margins. We also successfully completed the sale of Club Monaco at the end of the Q1 as planned. As previously announced, Chaps will transition from our North America wholesale business to a license model in Q2. These actions will enable us to further focus our resources on our core namesake brands and elevated positioning in the marketplace. I also want to take a moment to highlight our ongoing work to integrate citizenship and sustainability into everything we do. In June, we published our annual Design the Change report, outlining our updated commitments and actions to drive our impact and champion the lives touched by our business. While I encourage all of you to download the full report from our corporate website, I'll highlight a few important additions this year. We committed to comprising our global leadership team of at least 20% underrepresented race and ethnic groups by 2023. As part of our comprehensive circularity strategy, we set a target to use 100% recycled cotton in our products by 2025, and to launch additional resale and recycle opportunities for our consumers by 2022. We also announced a goal to achieve net zero greenhouse gas emissions across our operations and supply chain by 2040 as we continue to work on reducing our carbon footprint throughout our value chain. Beginning this fiscal year, we will incorporate key ESG metrics into our executive compensation plans. In closing, Ralph and I are very encouraged by the strong start to the fiscal year. Our teams are executing with passion and continue to embrace the agility they demonstrated throughout the challenging and unpredictable last 18 months. While we will continue to monitor key macro challenges closely for the balance of the year, notably around inflation, supply chain disruptions, COVID resurgences, and the pace of traffic recovery, the actions we took to strengthen the foundations of our brand and our business last year are enabling us to deliver results even earlier than we expected. Looking beyond this period of unusual COVID compares, we are increasingly confident in our ability to drive sustainable growth. More than ever, led by Ralph's iconic vision, our teams are intensely focused on executing on our strategic plan to continue to protect and elevate our brand while realizing the significant growth opportunities that exist for our business in every market. With their passion, talent, and careful execution, Ralph and I are confident in our ability to deliver attractive long-term growth and value creation for all of our stakeholders. With that, I'll turn it over to Jane to discuss our financial results, and I'll join her at the end to answer your questions. Thank you, Patrice, good morning, everyone. Our Q1 performance exceeded our expectations as our teams navigated challenges with agility, our brands connected with consumers, and our strategy drove high-quality growth. Upside performance this quarter was driven by faster recovery in both North America and Europe, led by our wholesale channel, strong performance across Asia despite extended COVID headwinds in Japan, accelerated digital growth with further digital margin expansion, and continued brand elevation with high teens AUR growth. We continue to drive expense discipline across our business while investing in high ROI initiatives to drive operating margins significantly above our expectations. Q1 revenues increased 182% to last year on a reported basis and 176% in constant currency. Growth was positive in every region, led by North America. Compared to Q1 fiscal 2020, or LLY, revenues declined 4%. However, this includes approximately 7 points of negative impact from last year's strategic reset to our distribution and to our Chaps business, which transitions to a license model this month. Total digital ecosystem sales accelerated to more than 80% growth in constant currency both to last year and LLY, including 50% growth in our own digital business. Our performance improved sequentially in every region, reflecting our strong assortments, expanded connected retail capabilities, and high-impact marketing. North America delivered the strongest sequential improvement, with digital ecosystem sales increasing more than 50%, up from low double digits last year. Digital margins also continued to strengthen and were strongly accretive to every region's profitability. Total company adjusted gross margin was 69.8% in the Q1, down 200 basis points to last year on a reported basis and down 260 basis points in constant currency. This was significantly better than expected as we lapped last year's unusual COVID mix benefits, driven by better pricing and promotion, along with favorable product mix and the benefit of supply chain organization streamlining. Adjusted gross margins increased 530 basis points to LLY. Q1 AUR growth grew 17%, marking our 17th consecutive quarter of AUR gains as we continue on our brand elevation journey. This came on top of 25% growth last year while stores were closed. Adjusted operating expenses increased 39%, driven by higher compensation and rent as we lapped last year's furloughs and store closures during COVID shutdowns. Adjusted expenses declined 2% compared to LLY. We more than doubled our Q1 marketing investments over the last year's substantially reduced levels at the start of the pandemic. Compared to Q1 fiscal 2020, marketing increased 39% as we focus on digital initiatives and reactivating key brand moments as markets reopened around the world. We expect to maintain an elevated level of marketing this year at around 6% of sales to support consumer engagement, acquisition, and our long-term brand-building initiatives. Adjusted operating margin for the Q1 was 16.8%, compared to a margin loss of -35.7% last year, 460 basis points ahead of LLY operating margin. This was well above our guidance of 7%-7.5% due to stronger than expected replenishment in our wholesale and digital channels, which generate highly accretive margins versus our total company rate. Moving on to segment performance. Starting with North America. Q1 revenue increased 300% to last year, driven by strong spring assortments, improving consumer sentiment, and expanded store reopenings as we lapped the peak of store lockdowns last spring. Compared to LLY, North America revenues declined 8%, included an 18% headwind from our strategic distribution resets and Chaps. In North America retail, revenues grew 189% to last year. Comps increased 176% on improved traffic and nearly 40% AUR growth, reflecting our continued elevation around product, marketing, and more targeted pricing and promotions. Brick-and-mortar comps increased 278%, driven by stronger AUR, basket sizes, and traffic as most stores reopened. Foreign tourist sales improved significantly to last year, they were still nearly 70% below LLY due to continued softness in international traffic and travel. Comps in our own digital commerce business grew 51% this quarter, accelerating from 25% in Q4 as we continue to focus on new consumer acquisition, product elevation, and enhancing the user experience. While we expect continued momentum in this channel, we note the prior year compares build sequentially after Q1. In North America Wholesale, revenues increased to $250 million compared to $23 million last year as we carefully restocked into the channel and lapped last year's minimal shipments to customers during the shutdown. Sales meaningfully outperformed our expectations, driving the biggest upside to our guidance this quarter. The foundational work we completed through COVID to reset and elevate our inventories, exit lower-tier wholesale doors, and significantly reduce our off-price penetration is starting to deliver strong early results across every key metric. In North America Wholesale, full price sell-out is exceeding our sell-in. Total sell-out was up high teens to LLY in Q1, led by market share gains in men's, kids, home, and women's footwear. We are also encouraged by early sequential improvements in women's ready-to-wear. Wholesale AUR growth continues to accelerate, up more than 20% to LLY. This represents our strongest wholesale pricing gains in the last six years. Our focus on wholesale.com is working, with digital sell-out up more than 50% in Q1 and more than 75% to LLY. Coming out of the pandemic, our wholesale partnerships are stronger, healthier, and more collaborative, with a focus on marketing, improved digital capabilities, and the right product assortment, and an appropriate level of inventories as we build back into demand. We see more to come as we are still in the early stages of driving our brand elevation strategy in this channel. Moving on to Europe. Q1 revenue increased 194% on a reported basis and 179% in constant currency, above our expectations. Q1 comps increased at 98%, with 154% increase in brick and mortar as stores reopened, and a 23% increase in digital commerce. The strong early pent-up demand that started in the U.K. this April was followed by better than expected reopening trends across France, Germany, and Italy, despite extended lockdowns in the quarter. Approximately 20% of our stores were fully closed in Q1, with an additional stores operating under partial closures or other restrictions. All of our major markets reopened by the end of June. Digital commerce outperformed despite a challenging 44% comparison last year, when COVID-related closures shifted more business online. While our digital comps partially benefited from extended lockdowns across Europe this quarter, the results also reflected stronger spring assortments, growth in connected retail, and our targeted marketing efforts. Europe wholesale exceeded our expectations again this quarter, driven by stronger sell-out and reorders in both digital wholesale as well as traditional wholesale accounts. Turning to Asia. Revenues increased 68% on a reported basis and 61% in constant currency. Our Asia retail comps increased 43%, driven by similar performance across our brick and mortar stores and digital commerce. Our digital ecosystem continued to accelerate in Asia. In Q1, this was supported by our successful 520 gifting campaign, 618 shopping festival live-streamed from our newly opened Sanlitun store, and momentum in our newest digital flagships in China, Japan, and Hong Kong. Japan, our largest market in Asia, was negatively impacted by an extended state of emergency for the majority of the quarter. These restrictions drove a roughly six-point headwind to the region's overall growth in Q1. Despite this, our teams were able to successfully mitigate these headwinds with stronger performance across the rest of the region. This was led by the Chinese mainland, which was up more than 50% to last year, and 70% to LLY in constant currency, driven by a strong product assortment, localized marketing initiatives, and new store openings. Korea was also up more than 30% to last year and 40% to LLY. Japan returned to normal operations in late June and started to ramp up vaccinations. However, the government declared another state of emergency in July ahead of the Olympic Games, and we expect a slower recovery in Japan this year. Moving on to the balance sheet. We ended the year with $3 billion in cash and investments and $1.6 billion in total debt, which compares to $2.7 billion in cash and investments and $1.9 billion in total debt last year. We are confident in our ability to meet our debt leverage ratio requirements in Q2 and eliminate capital allocation restrictions in our bank waiver. Net inventory increased 4% to support increasing demand. This compared to a 22% decline last year when we limited shipments to brick and mortar channels at the height of COVID shutdowns last spring. Supply chain challenges are increasing the variability of inventory flows quarter to quarter. Looking ahead, our outlook is based on our best assessment of the current macro environment, which includes ongoing COVID-related disruptions, the global supply chain challenges. We expect the quarter cadence this year to be volatile given dynamic conditions across our markets. This includes potentially uneven pace of recovery by region and channel, as well as the timing of investments as markets reopen. For fiscal 2022, we now expect constant currency revenues to increase approximately 25%-30% to last year on a 53-week basis. Excluding approximately $700 million in annualized revenues we deliberately reduced during the pandemic, including department store exits, off-price and Daigou reductions, Chaps and Club Monaco, this implies revenues up slightly to fiscal 2020. Foreign currency is expected to contribute about 30 basis points to full-year revenue growth. We now expect gross margin to expand 50-70 basis points even as we lap meaningful geographic and channel mix benefits due to last year's COVID closures. This implies roughly 440 basis point increase to fiscal 2020. Our outlook includes slightly higher freight headwinds of approximately 100-120 basis points versus our previous expectation of about 100 basis points. This is more than offset by our expectation of stronger AUR growth of mid- to high-single digits above our long-term guidance of low- to mid-single digits annually as we continue our long-term elevation work. We now expect operating margins of 12%-12.5%, up from our 11% outlook previously. This compares to a 4.8% operating margin last year and 10.3% in fiscal 2020. We expect operating margin for the remaining three quarters to moderate from Q1 levels based on increased marketing investments as planned to get to our target of 6% of sales this year, increased freight pressure in the back half of the year, and our assumption that the higher margin wholesale replenishment that we saw in Q1 does not continue as demands start to normalize. For the full year, we expect operating profit dollars to increase meaningfully compared to fiscal 2020 pre-COVID levels. For the Q2, which no longer includes Club Monaco, we expect constant currency revenues to increase approximately 20%-22%. Foreign currency is expected to contribute about 50 basis points to revenue growth. We expect operating margin of about 13%-14% in the Q2. This includes gross margin of flat to up 20 basis points as we continue to drive AUR and product mix, largely offset by higher freight as we lap last year's COVID mix benefits. We also expect modest operating expense leverage and restructuring savings partially offset by higher marketing and new stores. We expect full-year tax rates to be about 24%, with the Q2 tax rate about 24%-25%. In closing, we are proud of our team's agility and execution around the world this quarter. As Patrice mentioned, we are still managing through a highly dynamic environment. We are firmly back on offense with this strong start to the year. This is only the beginning. Guided by Ralph's original vision and our purpose of inspiring the dream of a better life through authenticity and timeless style, we are connecting with consumers in more exciting and innovative ways than ever before. Over the coming quarters and beyond, you'll continue to see us driving our targeted strategic investments in key growth opportunities in order to deliver value for all our stakeholders. With that, let's open up the call for your questions. One moment please for the first question. The first question comes from Brooke Roach at Goldman Sachs. Good morning, and thank you for taking our question. Can you please elaborate on what drove the outperformance in Q1, and perhaps where you see the most upside or downside risk to your updated fiscal 2022 guidance from here? Jane, as a follow-up, with a 12%-12.5% operating margin outlook in your sights for the year, how are you thinking about the levers to achieve your mid-teen longer-term operating margin target? Thank you. Hey, good morning, Brooke. Thanks for your question to kick us off. First off, I actually really want to take a moment to acknowledge the tremendous execution and agility of our teams in the Q1 as we got back on offense as a company. I'd say the key drivers of this quarter's outperformance were, first, the stronger than expected recovery in North America and Europe, especially in wholesale, which as you know, is accretive to overall margins. Just a couple data points to illustrate that. Our North America wholesale AUR was up more than 20%. Our full price sellout was up in the high teens, and our wholesale dot com business was up more than 75% to L LY. All three of these numbers are versus L LY, which we think is the more relevant benchmark period. The reset work that we did to create a healthier foundation in wholesale over the past few quarters is really starting to play out nicely and in a brand-enhancing way. The second point I would call out is the fact that we drove the right elevated product and brand messaging with consumers. Ralph and our design team have done a great job of creating assortments that are resonating with consumers. We've been really pleased with our ability to win in casual while at the same time winning in more sophisticated casual as the consumer pivots back into that direction. The third point I'd call out is our pivot to digital and connected retail, which is really driving accelerated growth and margin accretion across our digital channels. Therefore, I'd say we are feeling confident in the sustainability of our growth going forward, driven by a structurally healthier base, an important pivot in North America wholesale and digital, and investments back into our business. Brooke, I would just add that many of the risk factors that we highlighted at the start of the year did not materialize in this quarter. They were not as much of a headwind as we originally anticipated. On the second part of your question, based on the strong Q1 beat, we felt comfortable raising our full year guidance on strength in digital and improved gross margin outlook with higher AURs, and our ability to flow through top-line outperformance to operating margin. That being said, the global environment remains volatile, and our guidance continues to incorporate a number of factors. First, it's clear that COVID isn't over, and we are watching the impact across our markets from both a demand recovery as well as from a supply chain perspective. Second, we expect to have increased inflationary pressures, whether it's from freight, raw materials, or labor, to be a headwind as we move through the year. Lastly, while we're focused on strong growth trajectory in fiscal 2022, we're very focused on long-term growth and sustainable value creation. As Patrice mentioned, we're going to continue to invest in profitable growth. As we look towards a mid-teens operating margin, which we still think is the right long-term outlook for our business, we would say that we get to mid-teens margins based on continued revenue recovery, although lower than our original expectation of a $7 billion revenue mark in our original Analyst Day, thanks to the foundational work that we did through COVID. It'll continue to be a story of expanded gross margin and op and SG&A expense leverage to the top line. We can do this based on the expectation of a low single-digit comp growth, as we've noted earlier in prior quarters. We still feel confident about that. That's still our long-term goal, and we feel great about the progress we've made in this year in getting closer to that goal. Next question please, Angela. Thank you. The next question comes from Matthew Boss with JPMorgan. Great. Thanks congrats on a really nice quarter again, guys. Thank you. Thank you, Matt. Patrice, 17% AUR growth on top of 25% a year ago. Maybe by region or by category, where are you seeing the greatest upside relative to plan as maybe you had laid it out, as it relates to pricing power? As we think moving forward, where do you see the greatest opportunity remaining as you continue down the brand elevation path? You're right. It's 17% this quarter. Just to frame it for everyone on the call, this is our 17th quarter of AUR growth. We know our AUR growth over the past 12 to 18 months has been outsized and our long-term guidance on that is more low to mid single digits. We're really pleased with the progress that the team has made on continuing to elevate the brand and drive AUR growth concurrently. Matt, the biggest areas of progression. The one thing I would really call out is actually the progress on North America wholesale. We haven't grown AUR in wholesale in North America in a long time, years. I think through the great partnership that we have with our wholesale players here in the market, as well as the brand elevation work, the work on product, the work on marketing, the work on presenting the brand in a more engaging way, it's translating into meaningful AUR growth. I think we quoted the number of over 20% versus L LY in North America wholesale. Listen, this is not a one-quarter pop. We are confident in our trajectory moving forward, working closely with our partners to continue to drive AUR in wholesale. The other area I would call out is actually North America, our own website, where we saw, again, very meaningful progression on AUR this quarter, I think up north of 40%. Quite healthy. Again, we're not pricing, we're not elevating AUR in a vacuum. This is the outcome of brand elevation work. Again, elevating the product, elevating our marketing, elevating our presentation. As a result, we have the ability to drive AUR through the four vectors that we've been talking historically together. One is being much more targeted and surgical in our promotional activity. Two is strategic price increases where we believe we can offer competitive value relative to our peer set. Three is continuing to invest in product mix, and you see us invest in outerwear, in home now, and those products obviously carry much greater AUR levels. Finally, channel and country mix. That's some specificity, but all in all, Matthew, we've actually grown AUR really nicely across the board, and we're really pleased with our performance across regions, across channels, which indicates again, that the brand elevation work that we are doing is sticking and that the consumers see the value in what we have to offer. Matt, I would just add that we are really at the start of this journey in North America, and we see significant upside. As Patrice mentioned, the wholesale pricing is very encouraging. You saw strong AUR growth in North America, and I think we're really encouraged by the team's ability to add levers of pricing as we move forward. Notably, our new consumer acquisition with those new consumers transacting at higher AURs and bigger basket sizes is a really nice additional lever that we feel confident in, and confident that we've proved out the ROI of investing in that new consumer acquisition. We feel like there is more upside as we move forward. I think North America is encouraging, but also we're encouraged by the pricing that we've put up in our more developed markets like Asia, which has led in terms of AUR levels, but continues to grow nicely as we continue our brand elevation journey. Thank you. Next question, please. Thank you. The next question comes from Michael Binetti with Credit Suisse. Hey, guys. Thanks for all the detail here. First, I'll offer my congrats. I know you guys did a lot of hard work to clean up the business last year. We can see the results of it here. A couple from me. Jane, similar to Matthew's question on the AUR, how do you think about the sustainability of gross margins here? The run rate's above what you thought about at the Analyst Day couple years back. It's been just such a source of upside to both our numbers and your plan for so many quarters, and it doesn't sound like the underlying drivers are slowing down at all. I'd love your thoughts there. I guess in the quarter, as you started to refill the North America wholesale channel, and Patrice, I heard in your voice, you're very happy with that. The growth rate improved by about 100 basis points sequentially compared to Q4. Good numbers by any standards. I don't mean to tempt you or sound greedy, but as we've watched some of the peers report here lately, I wonder if Ralph Lauren would have seen wholesale up even more. The only reason I ask that is because you've been very measured about the pace of restocking that channel. I wonder if you could try to dimensionalize for us how you think about the September quarter and North America wholesale channel trend, the gap between sell in and sell through. Do you feel like you've held it back and that can continue to normalize, or how should we think about the continuation of the refill of the wholesale channel in North America? Sure, Michael. Let me start on gross margin because I think if we really step back from our gross margin journey, which we didn't start during COVID, it started four years ago. It's really been a couple of big things. It's the power of our brand, our belief in it and our investment in it, and the belief that we should be elevating all touch points to the consumer. That's what's given us the durability of our pricing journey, and that's what's really allowed us to continue to expand gross margin. We still believe in that journey. We also see that we have stronger products than ever before. Our breadth of categories and our strength at both opening price points, which we've maintained during this pricing journey, and elevated price points, which our consumers are telling us that they have a strong demand for, has been an important part of our product mix journey and gives us confidence in our ability to continue to drive gross margin. We also see the durability of our tailwinds. Longer term, we should continue to see geographic benefits and channel benefits as we lean into direct to consumer and lean into digital. Those are the things that underneath the covers are really driving our long-term gross margin journey, which we believe is durable for the next several years. Maybe not at the pace that we've seen during COVID, certainly, but gross margin expansion. You continue to see that in us taking up our guidance to now expanded margins for the balance of the year. Just a couple of comments on the wholesale channel. We're very pleased with what we saw in the wholesale trajectory this year. We've said throughout COVID that our sell out and sell in would start to normalize while sell out exceeded sell in this quarter. We expect that to normalize and be strong as we move through with our partners in recovery. We're very encouraged by the comp performance in our North America wholesale business, which was up double digits, and we're very pleased by the strong pace of growth that we saw in our digital wholesale business. I think we're working more collaboratively and in greater partnership with our wholesale partners than ever before. Next question. I'm sorry. I would just double down on that. I think we've been really pleased with the partnership with our partners here. Just a data point to give you the context of the reset work that we've done on wholesale brick and mortar North America over the past few years. We're down 66% in terms of wholesale doors over the past four years, right? We're seeing the benefit of that healthier brick and mortar base. Then we're also seeing the benefit of the amazing partnership we have on the digital front, where you saw significant acceleration of our wholesale.com performance. We expect that momentum to continue. I think we are on the very same page when it comes to looking at assortment and continuing to elevate our assortment. Thank you. Next question. Thank you. The next question comes from Erinn Murphy with Piper Sandler. Great. Thanks. Good morning. A couple from me. Good morning, Erinn. I was hoping you could share a little bit more about the category outperformance. You named a number of categories, including Polo shirts for men, kind of tailored bottoms, wide-leg bottoms for women. Just going back to your Investor Day, you talked about non-core categories as being a half a billion dollars of incremental growth. Just with what you've seen on consumer behavior, has the complexion of the categories in the non-core area changed? Just curious on how you're thinking about the growth there. I've got one follow-up. Sure. I'll take that one. I'm sure your follow-up is for Jane. On men's, it's indeed a pivot towards newness and a pivot towards more elevated products. Sports jackets, sports coats, Polo shirts, trousers, denim, and footwear are the areas where we have over-delivered over the past quarter. On women's, we're seeing the same shift towards newness and more sophisticated, elevated casual. Dresses, novelty sweaters, jackets, and bottoms are the key areas, Erinn, for women's. As far as our, we like to call them high potential categories as opposed to non-core, because over time, they will become core for us. These areas that we called out, like outerwear, denim, footwear, accessories, and we're adding home to that, we still believe in the potential of those categories. If anything, on outerwear, I think the opportunity is probably bigger than we initially estimated three or four years back. We're going to continue to invest in that heavily. You will see that in our fall assortment as an illustration of that. Across these different categories, I think we feel good about the capabilities we're building, the development of the product, how we're activating from a marketing standpoint, and really rethinking the way the product needs to show up from a distribution point. The most recent addition to that group is home. It's very early days on that journey, but we're very bullish on the opportunity and encouraged by the initial momentum we have on those. Great. Then my follow-up is just on the tourist level. I think you talked about it being down 70% versus LLY. Can you just share kind of your outlook over the next 12-18 months? Are there any signs of life as Europe is reopening there or even here in North America, and just how we should think about the rebound as we look forward? Thank you. Sure. Erinn, while we saw tourist sales improve slightly in North America, they're still down 69% to LLY. We did see some improvement on a sequential basis. International travel remained limited to most regions. Our assumption in fiscal 2022 is that we've assumed continued headwinds from tourist sales, as we expect foreign travel to be under pressure through the fiscal year. Foreign tourism tends to be a lagging indicator, but fortunately, we are focused on capturing more domestic travel opportunities coming out of the pandemic. You've noted our Sanlitun store, which is outperforming in tourist market like Beijing, and local domestic travel to some of our flagships is we're also leaning into. We have a limited presence in travel retail and have anticipated that that will be slower to recovery as we move forward. We're very focused on building our business with the Chinese consumer within China. You've seen our mainland China growth, continued strong store build-outs, and really increased marketing, which we've doubled this quarter to engage with that consumer before they start on their travel as the markets start to recover. Our expectation is that'll happen after fiscal 2022. Next question, please. Thank you. The next question comes from Omar Saad with Evercore ISI. Thanks very much for taking my question. Another great quarter. I wanted to ask a quick follow-up on all the discussions around your wholesale partners and the improved, more collaborative relationships you're having there. Do you have any thoughts on whether the kind of legacy markdown support vendor model, vendor markdown support model may be on the decline and less relevant going forward? I also wanted to get you to guys talk a little bit more about the e-com acceleration with younger consumers, update with those consumers. What role do they play in the newfound pricing power of the brand? Thanks. Certainly, as we look at our global wholesale footprint, we want to drive greater focus, Omar, on just natural margin, right? That's certainly where we're headed. As we're seeing our improved AUR performance in North America, less reliance on promotional activity, I think that's the direction of travel. That's certainly the intent, and that's what we're working towards with our partners in a win-win mindset so that we can expand our margins, and they can also expand theirs in a sustainable way. When it comes to recruiting new consumers on our e-commerce site, if I understood your question correctly, Omar, actually, we're quite energized by the progress we're making in terms of new younger consumer recruiting on our site. It's the result of a combination of factors, right? One, our marketing investments are up significantly. Just as a reminder, marketing this year is 6% of revenue. Two years ago, 4.5% of revenue. A significant lift in marketing. We're playing a much broader palette of marketing activities ranging from these above-the-line big brand campaigns around the Polo shirts to our activities on sports, Olympics, Wimbledon, gaming, right? You saw that we signed a partnership with G2 and in particular with Rekkles, one of their superstars there, because that's where the consumer is, and we want to appeal to that younger consumer where he or she consumes media, where he or she engages, and we're seeing gaming as an important component of that. We're continuing to inject product newness and surprise in our program. Major League Baseball program, frankly, exceeded our expectations significantly. What we've seen in Asia, particularly in China with the partnership that we did with Edison Chen and the CLOT brand, also significant excitement and very strong reaction from consumers. We are going to continue to appeal to a new generation, right? That's one of our five core strategic pillars. We think through our increased marketing and our more targeted approach, we have the ability to do that, and I think the numbers would bear that out. To Jane's earlier point, what we like about the consumer beyond the fact that it's a new generation is higher basket size, more full price, and therefore a more profitable consumer for us. We also put a lot of attention and focus on retention, right? Obviously the name of the game isn't just to bring them in, it's to make sure they stay in the family. Here, our ability to target them with much more personalized messaging through digital is proving to be a very effective tool for us. A journey to be continued, but we're excited and encouraged by the momentum we have with that next-generation consumer. Omar, I just wanted to add just on your comment about vendor allowance and the relevance. Full price selling takes vendor allowances off the table. When I look at our progress this quarter, our full price sell out was up almost 150%, and it was up almost 20% on a L LY basis. That's the power that eliminates the need for vendor allowances. It's the power of our brand, and that's what we're committed to delivering. Next question. Thank you. The next question comes from Laurent Vasilescu with Exane BNP Paribas. Good morning, congrats on great results. Thank you. I just wanted to ask about the operating margin, Jane and Patrice. You just delivered nearly a 17% operating margin in Q1. You're guiding for a 13%-14% operating margin, which would imply H2 operating margins would be single digits. Jane, any considerations on the gross margin SG&A spend? Secondly, Jane, I think you mentioned North America was down 8% on a two-year stack, but then there were 18 points of headwind due to the strategic actions, which would suggest that North America on a core basis really did grow. Is that the right way to think about it? If so, how do we think about North America growth on a two-year stack basis for FY 2022? Well, we will have the headwinds of the reset that we did. You're exactly right. North America was down 8%. If you consider the reset, it was up about 3%. Yeah. Up 10. Up 10. Is that right? Yeah. Yeah. Okay. Total company up 3.5% without the resets. North America specifically up 10%. I apologize. North America would be up 10% if you take out all of the resets in Q1, even though on a L LY basis, it was down 8%. We're guiding now to a 12.5% operating margin. That puts us 200 basis points ahead of pre-COVID levels on a lower revenue base. We're feeling very good about our progress towards our mid-teens operating margin. We do note as we move through the year that we had some exceptional replenishment opportunities in wholesale, both digitally, digital pure players and our wholesale partners, which comes through at a high incremental margin, and don't anticipate that level of replenishment as we move forward. We note that some of the freight pressures and some of the raw material pressures will continue to be a headwind in the balance of the year. You'll recall, Laurent, that we buy on long-term contracts, and so some of that long-term pricing starts to fade out as we move into higher price layers as we move through the year. We've incorporated this into our guidance, but we've taken up our freight impact from 100 basis points to 120 basis points for the year. The key lever for the balance of the year is really top-line momentum. Now we're watching a number of factors, COVID, the Delta variant, and the supply chain very carefully, but we're very encouraged. It's still early in the year. We feel confident. We feel like we're back on offense. We have a clear-eyed view of where the risk is and the opportunities across channels and the opportunities across our brand. Thank you. We'll take the last question, please. Thank you. The last question comes from Ike Boruchow with Wells Fargo. Hey, thanks for squeezing me in. Congrats, Patrice, Jane. Great job. I guess maybe, Jane, a question on margins. The digital commentary you guys are giving, you're not only seeing pretty meaningful revenue acceleration in that channel, especially in North America, but the profitability metrics are pretty impressive. I think you talked about 1,400 basis points of margin improvement on a two-year basis. I think you said that it's now accretive to the total company operating margin, which is implying it's mid-teens or better. How does that change the algorithm to get you to the mid-teens margin, maybe even quicker than what you would have thought prior at the Analyst Day, when you think about how digital is mixing in the margin drivers within that channel? Yes. The digital reset is a key and powerful driver for us to get to our operating margin expansion, even on a lower revenue base. Ike, I just want to clarify, not only is it accretive to total company, but it's accretive to every region. When you look at the operating margins of the regions, they are meaningfully ahead because they don't have the overhead charges of our total company margin. To have it be accretive in every region is even a higher bar than accretive to total company, and it's accretive in every region. We're very proud of that. That can be a lever that we can now lean into and have it be margin accretive. It's a critical strategic reset for us, and I think is only securing and building our confidence in our ability to get to mid-teens margin. We are very encouraged by our continued expansion in digital margins this quarter. All right. Thank you everyone for joining us today. We look forward to sharing our Q2 fiscal 2022 results with you in November, and in the meantime, stay safe and have a great day. Ladies and gentlemen, that does conclude your conference for today. Thank you for your participation. You may now disconnect.