Ladies and gentlemen, thank you for standing by. Welcome to the Ralph Lauren Q3 F iscal Year 2026 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 the call, please press star then zero. As a reminder, this conference is being recorded. I would now like to turn the conference over to our host, Ms. Corinna Van der Ghinst. Please go ahead. Good morning, and thank you for joining Ralph Lauren's Q3 fiscal 2026 conference call. With me today are Patrice Louvet, the company's President and Chief Executive Officer, and Justin Picicci, 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, our financial performance will be discussed on a constant currency-adjusted basis. Our reported results, including foreign currency, can be found in this morning's press release. We will also be making some forward-looking statements within the meaning of the federal securities laws, including our financial outlook. Forward-looking statements are not guarantees, and our actual results may differ materially from those expressed or implied in the forward-looking statements. Our expectations contain many risks and uncertainties. Principal risks and uncertainties that could cause our results to differ materially from our current expectations are detailed in our SEC filings. To find disclosures and reconciliations of non-GAAP measures that we use when discussing our financial results, you should refer to this morning's earnings release and to our SEC filings that can be found on our investor relations website. With that, I will turn the call over to Patrice. Thank you, Corrie. Good morning, everyone, and thank you for joining today's call. We delivered strong Q3 results and progress on our Next Great Chapter: Drive plan this holiday. In a season defined by warmth, joy, and a spirit of giving, Ralph Lauren's core values, the dream of a better life, time well spent with family, quality, and authenticity, enabled us to connect deeply with consumers around the world. Across generations, cultures, and markets, people are stepping into our lifestyle and iconic way of dressing. This powerful engagement with consumers is also translating to strong financial results. In our most important quarter of the year, we exceeded our commitments on both the top and bottom line, with broad-based performance across geographies, channels, and product categories. Full price sell-throughs were meaningfully better than we expected this holiday, as our brand experiences and products resonated around the world. This strong demand enabled us to continue driving our long-term elevation journey with improved quality of sales and gross margin expansion in each region, more than offsetting the impact of higher U.S. tariffs as we began to flow through more product under the new rates. Our performance was also balanced across our retail and wholesale channels this holiday, reflecting our growing brand desirability and pricing power globally. This drove healthy, high single-digit comp growth, along with double-digit growth in wholesale. Underpinning this momentum are our enablers that continue to support our performance, our talented and passionate teams working tirelessly to execute on Ralph's vision, our commitment to operational agility and a powerful balance sheet as we continue to navigate an uncertain global environment, and our focus on harnessing advanced technology, AI, and analytics to better serve our consumers and drive greater efficiencies in our business. In short, the three-year Next Great Chapter: Drive strategic plan we presented in September is off to a strong start, and our multiple drivers of growth across regions, channels, consumer cohorts, and the breadth of our lifestyle product offering are delivering. Let me take you through a few highlights from the quarter across the three strategic pillars of the plan. As a reminder, these include, first, Elevate and Energize Our Lifestyle Brand; second, Drive the Core and Expand for More; and third, Win in Key Cities with Our Consumer Ecosystem. Starting with our efforts to Elevate and Energize Our Lifestyle Brand. For nearly 60 years, Ralph has inspired people to step into their own dream of a better life. From the cozy elegance of a Ralph Lauren Christmas to the optimism and adrenaline of the Olympics, we sit at the heart of culture. Over the holiday season, our teams continued to reinforce our place in culture, bringing our unique form of cinematic storytelling to life across markets and platforms, transporting both new and existing consumers into our world. Key highlights from the Q3 included, first, our Holiday 2025 Mountain Living and Timeless Gifting campaigns, translating the magic and easy elegance of Ralph Lauren around the world. We brought this to life this season through our immersive pop-up experiences in London, Los Angeles, Tokyo, Munich, and Seoul, creating winter wonderlands as only Ralph can, featuring Ralph’s Coffee, special guest performances, family photos, hand-painted denim jackets and candles, and even our own Christmas tree farm. Along with a range of other activations, including our AI-powered store windows, featuring our Polo Bear and digital campaigns, our holiday campaigns drove a combined 2.9 billion global impressions. Next, we continue to reinforce our position as one of the leading luxury apparel brands in the world of sports. During the quarter, we unveiled our Team USA uniforms for the Milan-Cortina Winter Olympics, with special celebrations in New York City and in Milan with Vogue and GQ Italia. We're excited to feature inspiring stories that highlight the athletes' dedication and perseverance to reach one of the greatest events on the world stage. I encourage you to check out all the looks, starting with tomorrow's opening ceremony. In the world of car racing, Lando Norris, our Polo Red fragrance ambassador, won the 2025 Formula One World Drivers' Championship, and we renewed our long-standing partnership as an official sponsor of U.S. Open Tennis Championships, one of the most electric events of the year in tennis. In Asia, we continued to build our elevated brand awareness and affinity through our Very Ralph documentary events in Hong Kong and Singapore, featuring celebrities and friends of the brand. Our Polo Originals campaign in Tokyo showcased Ralph Lauren's leadership in everyday luxury styling, uniquely blending Japanese refinement with American heritage dressing. And finally, we outfitted an exciting group of actors and artists, including Jennifer Aniston, Rose Byrne, Emily Blunt, Chase Infiniti, Jessie Buckley, and more, for the ELLE Women in Hollywood celebration. Together, these global activations are driving strong, sustainable growth in new customer acquisition and retention. In the Q3, we added 2.1 million new consumers to our DTC businesses, on top of last year's 1.9 million record results, driven by digital and full-price store customers. We were encouraged by the strong momentum across generations, led by younger, next-generation consumers, women, and VICs. We increased our social media followers by high single digits to more than 68 million, led by Instagram, TikTok, Douyin, and Line. This rolling thunder approach to activations, enabled by our strong data and analytics capabilities, gives us confidence to continue our brand momentum as we look ahead. Moving to our second key initiative, Drive the Core and Expand for More. Ralph and our creative teams continue to deliver on his vision through timeless, high-quality products and distinctive styling that tell a story of a life well lived. Independent of any single fashion trend or cycle, this philosophy is embedded in how we drive our core products as much as it is in our high-potential and complementary lifestyle categories. Starting with our core, which represents more than 70% of our business. Core product sales grew low double digits this quarter, driven by strength in our cotton cable knits, jersey, wool cashmere, and flag sweaters, all perfect for gifting, Oxford and linen shirts, rugby and quarter-zip knit tops, and our iconic polo caps. Our holiday campaigns also drove healthy, full-price demand in our core children's programs, led by our elevated sweaters and mid-weight down jackets and knit and fleece sets. Our high-potential categories, including women's apparel, outerwear, and handbags, continue to be accelerators for our business. Together, these categories increased high teens, outpacing total company growth in the quarter. In women's, sweaters were a standout, ranging from our hero cable knit in cotton, wool, and cashmere to our beloved Polo Bear in newer half-zip and polo cables. Our outerwear offerings showcased our expanded range of classifications, from the sporty functionality of our Polo puffers in candy shop colors, to more sophisticated options like our tailored wool coats and cable knit bomber jackets. Momentum in our handbag business continued to be driven by our foundational collections, Polo ID and Polo Play, in core leather, seasonal suedes, and Western details, along with our women's collection, Ralph and Ricky Bags. Special releases this quarter included Polo Ralph Lauren x TÓPA, the fourth collaboration in our groundbreaking Artist in Residence program, focused on empowering and celebrating artisans within the communities that have historically inspired our designs. Our Team USA collection, ahead of this month's Milan-Cortina Olympic Games, honoring the city's creative spirit while staying true to the enduring style that defines Ralph Lauren. Our annual Pink Pony collection, supporting Ralph Lauren's long-standing commitment to cancer care and research. We will continue to leverage the unparalleled breadth of our lifestyle product offering to connect with consumers. Turning to our third key initiative, Win in Key Cities with Our Consumer Ecosystem. We continue to expand our consumer ecosystems to deepen our presence in our top 30 cities around the world. We are also laying the groundwork for long-term sustainable growth in our next 20 cities. Across each of these ecosystems, we're establishing a cohesive, consistently elevated experience to allow consumers to engage with and step into the Ralph Lauren lifestyle. Within DTC, which comprises the majority of our business, we delivered another quarter of healthy comp growth across regions. Global comps increased high single digits, on top of more than 12% growth last year, led by our Ralph Lauren stores and digital commerce. We were also excited to launch our Ralph Lauren TikTok Shop in the U.S. this quarter, becoming the first luxury fashion brand with an always-on presence on the platform. The shop features a curated assortment, including core Polo bestsellers and seasonal refreshes, tailored to this platform's next-gen audience, including younger male shoppers. By region, Asia once again led our growth, with sales up more than 20%, driven by all key markets. China grew more than 30% this quarter, ahead of our outlook, as we continue to strengthen and grow our elevated brand across the market. Our China performance was supported by our holiday and Very Ralph campaigns, continued expansion on Douyin, and another outstanding Singles Day, with high-quality double-digit revenue growth and strong new customer acquisition around the event. Europe and North America also delivered high-quality growth this quarter on top of last year's strong compares. As we continue to reinforce our presence in our top cities, we opened 32 new owned and partner stores globally. New store highlights this quarter included Chengdu IFC Mall in China, Stratford and Bishopsgate in London, New Delhi, Abu Dhabi, and Chatswood Chase in Sydney. Finally, touching on our enablers. Our business continues to be supported by our five key enablers. Recent highlights include, first, as part of our focus on delivering advanced technology, AI, and analytics, Ask Ralph, the AI-powered digital shopping assistant we launched in September, is providing us with powerful insights as AI drives accelerated shifts in consumer behavior. Customers are moving beyond traditional search toward rich, natural language product conversations, with styling and outfit discovery accounting for more than 50% of our total engagement. In addition to driving more personalized experiences for our customers, Ask Ralph is also becoming an important resource for high-quality first-party data. Second, our teams and our culture drive our performance. We were proud to be named one of America's Best Companies by Forbes. Finally, it was an honor for all of us when Ralph was named the CFDA's 2025 American Womenswear Designer of the Year. It is the second time Ralph has received this award, and he is the only designer to win all of the CFDA's top honors. This is a testament to our exciting women's momentum and to our brand's enduring relevance. Congrats to Ralph and our creative team. In closing, Ralph and I are proud of our team's progress and execution through the first three quarters of this fiscal year, including through the important holiday season. Even as we continue to navigate an uncertain global, macro, and geopolitical environment, we remain focused on what we can control and what's ahead for Ralph Lauren. Creating value through our powerful brand that is as relevant today with Gen Z as it is with our silver spenders, a relentless focus on driving our core, while also accelerating our high-potential category opportunities, meaningful geographic white space, which we are developing with a thoughtful approach to our top cities, and a proven ability to execute with creativity, agility, and operating discipline. Before I hand it over to Justin, we'd like to extend a warm welcome to our newest board member, Cesar Conde. Cesar brings rich experience from the world of modern media, particularly with international expansion and broadening brand reach to more diverse global audiences. We're excited to have him join us. With that, I'll hand it over to Justin, and I'll join him at the end to answer your questions. Thanks, Patrice, and good morning, everyone. This holiday quarter reinforced our strong execution against our next great chapter drive strategy. Results were ahead of our expectations, with a healthy balance of revenue growth and accelerated quality of sales to deliver margin expansion ahead of plan. We continued to advance meaningfully on our long-term elevation journey, with double-digit AUR growth on better-than-expected full price sales and solid new customer acquisition across all regions. At the same time, we further invested in our key strategic priorities to enable sustainable, longer-term growth and value creation... and we achieved all of this while continuing to strengthen our balance sheet and cash flows, with approximately $650 million in free cash flows and $500 million in returns to shareholders this year to date. Our performance gives us increased confidence in our trajectory, and as a result, we raised our expectations for fiscal 2026, reflecting our strong execution through the first three quarters and a modestly improved outlook for the balance of year. Let me walk you through our financial highlights from the Q3, which, as a reminder, are provided on a constant currency basis. Total company Q3 revenue growth of 10% was above our mid-single-digit outlook, even as we lapped exceptionally strong holiday performance last year. Asia led our performance, increasing 22%, followed by North America, up 8%, and Europe, up 4%. Total company retail comps increased 9%, with balanced growth across our own digital business and brick-and-mortar channels. Total digital ecosystem sales, including our own sites and wholesale digital accounts, grew mid-teens, reflecting growth across all regions, led by Asia. Total company adjusted gross margin expanded 140 basis points to 69.8%. The increase was driven by AUR growth, favorable mix shift toward our full price businesses, and lower cotton costs, which more than offset the anticipated increase in U.S. tariffs flowing through cost of goods sold, along with higher labor and non-cotton material costs. AUR grew 18% in the Q3, well ahead of our plan and supported by strong full price selling trends and reduced discounting, modest targeted pricing, and favorable channel and product mix. Across all three regions, outsized full price consumer demand early in the season enabled us to pull back even more on planned holiday promotions this quarter. We now expect high single- to low double-digit AUR growth in the Q4, with the flexibility to further reduce discounting based on selling trends. Adjusted operating expenses grew 9%, a 50 basis points decline as a percentage of sales to last year, reflecting leverage even as we increased marketing investments to support our expanded holiday and localized key city activations. Marketing was 8% of Q3 sales, compared to 7.1% last year. With revenue growth exceeding our initial expectations for this year and strong returns on our brand activations, we are taking up our full year marketing outlook to a range of 7.5%-8%, in line with our long-term expectations. Our adjusted operating margin expanded 200 basis points to 20.7%, and operating profit increased 21%, both ahead of plan. Moving to segment performance and starting with North America, Q3 revenue grew 8% above our expectations, with strong performance across both our DTC and wholesale businesses. Our direct-to-consumer business increased 7%, with significant quality of sales gains across all channels, driven by greater full price selling and lower discounts. In North America retail, Q3 comps were up 7%, led once again by our Ralph Lauren stores. Digital comps also grew 7%, supported by our full funnel marketing activations, better in-stock positions on key products, and improved site experience. In North America wholesale, revenue increased 11%, driven by stronger than expected reorders, outperformance in digital wholesale and our top premium and luxury doors, and timing of off-price sales. While we remain encouraged by our sellout trends, our outlook continues to assume a decline in Q4 North America wholesale revenues. This is primarily driven by a planned strategic reduction in off-price sales, the timing of certain spring shipments out of Q4 and into Q1 of fiscal 2027, and our ongoing wholesale door exits and broader consolidation in the channel. Moving to Europe. Q3 revenue increased 4%, in line with our expectations on very strong prior year compares, representing 20% growth on a two-year stack. By market, our performance was led by Germany, the UK, Italy, and Spain. Strong and sustained brand momentum across the region enabled a further pullback in seasonal promotions versus our initial plans, driving higher quality of sales in the quarter. This was in contrast to a highly promotional competitive environment across markets. Underlying demand for Europe remained in line with our full-year outlook at the high end of mid-single-digit growth. Europe retail comps were up slightly on top of an outsized 17% increase last year. Healthy comps in our full price Ralph Lauren stores and digital sites were largely offset by softer outlet trends as we pulled back promotions and lapped the strong double-digit compares from the second half of last fiscal year. Our Europe digital ecosystem increased low double digits, led by wholesale digital performance. Europe wholesale increased 8% above our plan, driven by higher than expected reorders. We still expect Q4 to be the most negatively impacted quarter of the year as we strategically pull forward wholesale receipts earlier in the fiscal year, as previously discussed. Turning to Asia. Q3 revenue increased 22%, with retail comp growth of 20%. Our teams delivered growth across every market in the region, reflecting disciplined execution, strong full-price demand, and high-impact brand engagement, from our Very Ralph premieres to our Polo Originals and regional holiday activations. Once again, China led our growth, with sales up more than 30% to last year, driven by comps and new customer recruitment, with strong performance during key events like Golden Week and Singles Day, and continued growth on Douyin. Sales in Japan increased double digits, driven by ongoing strength in full-price sales, enabling further discount reductions throughout the quarter. Asia digital ecosystem sales increased strong double digits in the Q3. We continue to expand our presence on Chinese social platforms, as well as scale our own digital sites in China, Japan, and Korea. Moving to the balance sheet. Our strong balance sheet and cash flow generation provide a solid foundation for executing our long-term strategy, providing flexibility amid uncertainty, enabling continued investment in strategic growth, and delivering value to our shareholders. We ended the period with $2.3 billion in cash and short-term investments and $1.2 billion in total debt. Q3 net inventory increased 10% in constant currency, in line with revenue growth. Our inventories remain well positioned to meet consumer demand as we close out the holiday season and begin transitioning to spring. Looking ahead, our outlook remains based on our best assessment of the current operating environment, geopolitical backdrop, and macroeconomic trends. This includes tariffs and other inflationary pressures, supply chain disruptions, and foreign currency fluctuations, among other considerations. For Fiscal 2026, we now expect constant currency revenues to increase high single to low double digits, up from 5%-7% previously. Foreign currency is still expected to benefit revenue growth by about 200-250 basis points this year. With our strong Q3 results, we now expect full-year North America revenues to grow at the high end of mid-single digits versus our prior outlook of a slight year-over-year increase. We continue to expect Q4 revenue growth to moderate on a sequential basis, reflecting our planned strategic reductions in off-price wholesale and later timing of spring receipts. While the consumer has proven more resilient than we initially anticipated this year, we remain somewhat cautious on the North American operating environment, due in part to further consolidation across the broader wholesale channel, including recent developments at Saks. At the same time, we continue to strategically shift our business toward full-price DTC and grow in our top premium and luxury department store doors. Importantly, our net exposure to Saks this year is minimal, reflecting our disciplined and proactive management of the account. We continue to expect Europe to grow at the high end of mid-single digits, with the first half of the year benefiting from planned wholesale timing shifts, followed by the negative impact of those shifts, along with more challenging compares in the second half. Despite the timing shifts, we still expect healthy underlying growth in Europe in line with our long-term plan. We now anticipate Asia to grow mid-teens, up from our prior outlook of a high single to low double-digit increase. We now expect full-year operating margin to expand approximately 100-140 basis points in constant currency, compared to our prior guidance of 60-80 basis points, driven by a more balanced contribution of margin expansion and expense leverage. Gross margin is now expected to expand about 40-80 basis points for the full year, with further growth in AUR and favorable cotton and full-price channel mix more than offsetting the expected sequentially increasing pressure from U.S. tariffs. Foreign currency is anticipated to benefit gross and operating margins by about 20 and 50 basis points, respectively, in fiscal 2026. For the Q4, we expect constant currency revenues to increase approximately mid-single digits. This growth reflects continued strong demand, more than offsetting a planned pull forward of receipts to earlier in the fiscal year, as well as a strategic reduction of off-price sales during the quarter, as previously discussed. Foreign currency is expected to benefit revenues by approximately 200-300 basis points in the quarter. We continue to expect a decline in Q4 gross and operating margins this year due to a combination of higher tariffs, timing of marketing campaigns, including the Olympics and our Milan fashion show, and previously discussed timing shifts, all within one of our smaller revenue quarters, with Q4 primarily serving as a transitional period between seasons. We continue to expect tariffs to be a meaningful gross margin headwind through the first half of next fiscal year until we begin to lap the higher cost base. Despite the increased near-term input cost, we still expect gross margin expansion in each year of our drive plan, with more meaningful tariff mitigation over time. We expect Q4 operating margin to contract approximately 80-120 basis points in constant currency, largely driven by a similar level of gross margin contraction. Operating expenses are expected to be roughly flat to last year as a percentage of sales, due to the timing of marketing investments as planned. Foreign currency is expected to benefit gross and operating margins by about 50 and 100 basis points, respectively, in the Q4. We expect both our Q4 and full year tax rate to be in the range of 19%-21%. Our CapEx outlook of approximately 4%-5% of sales continues to reflect our investments in sustainable long-term growth and the infrastructure required to support it. This includes investments in digital and AI capabilities, brand-enhancing new stores and renovations, and our multi-year next generation transformation initiative, encompassing integrated business planning, enhanced logistics capabilities, and the move to a single globally unified ERP platform. In closing, our strong Q3 performance underscores the enduring power of our brand and its deep, authentic connection with consumers around the world. Ralph's vision of inspiring the dream of a better life is more relevant than ever, resonating across generations and cultures and transcending fashion trends. As we continue to navigate the volatile broader operating environment with agility, we remain confident in our ability to deliver sustainable, long-term growth, supported by the strength of our iconic brand and our multiple diversified drivers of growth across geographies, categories, and channels. With that, let's open up the call for your questions. Thank you. Ladies and gentlemen, if you wish to ask a question, please press star then one on your touchtone phone. You will hear a tone indicating you have been placed in queue. You may remove yourself from the queue at any time by pressing star two. If you are using a speakerphone, please pick up the handset before pressing the numbers. We ask that you limit yourself to one question per caller. Once again, if you have a question, please press star one at this time. One moment, please, for the first question. The first question comes from Matthew Boss with J.P Morgan. Your line is open. Thanks, and congrats on another nice quarter. Thank you, Matt. So, Patrice, you cited record levels of new customer acquisition this quarter and continued global brand strength. As you increase the marketing budget, how are you and the team thinking about sustaining longer-term brand momentum? And then, Justin, could you elaborate on the drivers of your raised outlook for the Q4 and specifically trends that you're seeing today on the ground in North America and Europe, maybe post-holiday? All right. Good morning, Matt. Thank you for your question. So you heard us say it before, Ralph is really much more like a movie director, think Martin Scorsese or Steven Spielberg, than he is a traditional designer. And he and his talented creative design team invite really people into his cinematic world, right? So it's not just through products like our cashmere sweaters or our polo shirts, but really through cultural moments and experiences that transcend trends, that we attract and retain consumers into our brand. So yes, we had a great holiday, but we think beyond the moment in time. And listen, whether that's quiet luxury or Ralph Lauren Christmas or, you know, quarter-zip sweaters or anything else, we're not reliant on these trends. Now, that said, they rarely happen by chance, right? They reflect the work our teams deliver to weave our brand into the fabric of culture around the world. Ultimately, we've transformed our approach to marketing over the past few years. Now it's always on, in our key cities, with a rolling thunder of activations. So moving past this holiday, you can see it now, right? We just finished our Milan fashion show, men's fashion show, with very strong feedback, I'd say even well beyond our expectations. Tomorrow, we have our biggest fashion show, which is the opening ceremony of the Winter Olympic Games, expected to be viewed by more than 2 billion people. And then next Tuesday, we have our women's collection show here in New York, and that's just part of that drumbeat of marketing activations. We have stronger confidence than ever in our marketing ROI, which has enabled us to take up our investments meaningfully over many years and even this quarter relative to last year, as you just heard Justin mention. So listen, the results are clear, they're healthy, they're durable, and we're fundamentally shifting our consumer base toward a higher-value consumer over time. Think more full price, skewing younger and more women. Now, this isn't just about marketing, all right? Our consumers stay with us because we're consistently delivering what only Ralph Lauren can. The cinematic storytelling that we pair with AI-powered insights, a broad, timeless product portfolio offering superior value, and our elevated go-to-market experiences across both digital and brick-and-mortar. It's the consistent execution across all aspects of our business that has led to 50%, 50% of our customers staying with us over 10 years and 25% for over 20 years. So together, this is what's reinforcing our luxury equity and our value proposition, and it's reflected in the way our brand is resonating broadly across generations, across geographies, channels, and cultures. Not just today or for a trend cycle, but for a lifetime. ... And Matt, on the outlook, for Q4, you know, we saw continued broad-based global momentum across regions and channels behind our brand and our business through and coming out of holiday. So we took up our Q4 outlook based on this continued momentum, notably in North America, where despite a pretty volatile, choppy operating environment, we continue to drive solid, high quality, balanced growth across channels this past quarter. Asia also, really strong momentum behind our businesses across markets in that region. Now, we do expect some moderation in Q4 growth versus the quarter we're coming off of, and that's driven by the timing of wholesale receipts in North America and Europe, and a strategic reduction of sales in the off-price channel, as I mentioned in my prepared remarks. But underlying demand remains healthy, and our core consumer continues to be resilient, and we expect a healthy, solid, underlying growth trend for Q4, as reflected in that mid-single digit guide and as we head into the spring selling season in earnest. Thank you. Next question, please. Thank you. Our next question comes from Jay Sole with UBS. Your line is open. Thank you so much. Justin, your 18% AUR growth this quarter was well ahead of your guidance of up high single digits. Could you just walk us through the drivers of your AUR increase? And are you starting to see any price resistance from consumers at these levels? And, and also, you know, if you could describe where the company is in terms of full price selling today and, and maybe what the ultimate opportunity is long term. Thank you. Sure. Morning, Jay. Thanks for the question. So look, we're really encouraged by the consistency of our execution and the results we've been delivering over really an extended period of time under this next great chapter strategy. AUR growth is one important output of that long-term brand elevation strategy, though it's not the only driver of our revenue growth. And as we've talked before, our growth is, and will continue to be, driven by a combination of new customer acquisitions, Patrice just talked, targeted unit growth and AUR expansion. And specifically on AUR, this quarter builds on more than eight years of consistent AUR growth, right? And our drivers remain durable, and we still have meaningful runway ahead of us in each of our regions. These drivers include our investments in brand elevation and marketing to support full price customer acquisition and retention, favorable geo and channel mix, with Asia and full price DTC continuing to lead our growth, an increasingly elevated product mix, and we enhance, you know, our offering, we scale our high potential categories, reduced promotional activity as we leverage analytics to be more precise in our offers, and targeted pricing, focused on delivering really compelling customer value. Now, this fiscal year, strong full price demand enabled us to pull back on promos even more than we initially planned across all regions, including in the Q3. That, that reduction in discounting, well, that was the primary driver of that AUR growth coming in at high teens for the quarter, ahead of the original expectation of up high single digits. You know, all of our other durable AUR drivers, they contributed about equally, I would say, to our growth. And importantly, we haven't experienced price resistance from our core customers. But we continue to monitor our value proposition very, very closely, and our value perception and NPS scores have both progressively increased over time in tandem with AUR. And we're encouraged by the solid comp growth we're delivering and the share gains we're seeing across markets alongside this AUR expansion. Our focus remains on driving sustainable top-line growth while continuing to strengthen our quality of sales. It's, it's very much an, an and for us. It's, it's not an either or an or. And it's all part of our, our longer term plan to continue to elevate our brand and invest in our future, all while delivering healthy growth and margin expansion. On the full price business point, full price continues to lead our business performance, and that's true really across markets, across channels, across product categories. When you think about the share of our customer base, you know, as we add more and more new consumers to DTC, and you heard Patrice talk about the 2.1 million this quarter, they're more and more skewing towards full price. So that percentage of our total customer base continues to increase over time, and you see that not only in the customer info, but in our KPIs and our quality of sales metrics. Thank you. Julie, next question, please. Thank you. Our next question comes from Laurent Vasilescu with BNP Paribas. Your line is open. Oh, good morning. Thank you very much for taking my question. I wanted to ask about Europe. Justin, I think you called out better performance from full price stores versus outlets as the offset. Can you maybe quantify the spread for the audience, to get to the comp? And then, bigger picture for the year, I think you called out Europe is guided to be up high end of mid-singles. Just wanna confirm that for the audience, that's on a CC basis. And if so, that implies Europe could be flattish for forty. So I'm just curious to know if that's driven by conservatism or, Patrice, are you-- is there anything that you want to call out for the audience on what you're seeing in Europe, for this quarter? Thank you very much. Thanks, Laurent. So our underlying growth in Europe continues to be healthy and strong, and that's what we've been delivering from the region, you know, for the past several years. Both Q3 and fiscal 2026, our call for fiscal 2026, they're coming in where we expected them, right? With that full year outlook up at the high end of mid-single digits, in line with our plan and longer term growth outlook for Europe. We're happy with the underlying growth that we're seeing in Europe. Overall, if you look at it from a long-term basis, we've been pretty consistent in delivering solid, high quality growth, especially if you normalize out some of the one-time things like Covid and timing shifts. Our strategy is working, and it's a great example of elevated execution and brand positioning across all channels throughout the region.... strong, high-quality partnerships, solid new customer acquisition. To your point, Laurent, the full price business is leading our growth, and that continues to be a trend, which in Q3, it provided us with really the strategic opportunity to lean a bit more into enhancing our quality of sales, pull back on discounts, still deliver comp growth, which you see come through those quality of sales in the AUR and in the gross margins. And we still delivered comp growth despite being up versus a very strong baseline in the prior year, right? We're up mid-teen, high teens in the prior year, right? This was really also an investment to drive durable growth beyond this quarter. So, you know, there's been a little noise. Timing shifts have made it a bit more challenging to get a beat on the underlying trend from quarter to quarter, and that's why we specifically provided that full-year trend in our latest guide, which continues to be steady, healthy, high-quality top line growth in that mid-single-digit range, which we feel really good about, and we still feel like that's the right normalized level of growth looking ahead, and we're well on track to deliver that. And for Q4, you know, I would say our outlook for Europe is slightly up. But again, the underlying growth trend, a bit more normalized in that mid-single digit range because you do have some of those timing shifts that are pressuring that top-line trend. Yeah, I would add, Laurent, I mean, Justin's right. There's noise in the numbers because of timing for Europe. But a few things to call out. First of all, our core consumer is resilient, continues to be healthy and resilient across the European market, and we saw particular strength this time in Germany and UK, our largest markets, but also good strength in Southern Europe as well. Second piece is the brand momentum continues to be strong, and we see that across the key metrics, whether that's NPS, whether that's how we're continuing to bring in new consumers into the company and into the brand over the quarter. And then third, just reiterating Justin's point, we were very choiceful in terms of interventions for Europe in Q3. We felt really good about the progress in our full price stores. We have very strong digital performance that quarter. We have very healthy wholesale performance, and that allowed us to pull back on our promotional activity, activities further than expected in outlets, very deliberately, because, listen, we're playing the long game, right? And to Jay's earlier question on full price selling and others, that's where we're moving towards, right? And so when we see opportunities to pull back on promotional activity, we will take advantage of it, in the context of a business that is quite healthy, that we're very excited about, and it's got good momentum. Thank you. Next question. Thank you. Our next question comes from Michael Binetti with Evercore ISI. Your line is open. Hey, guys. Thanks for taking our question here. I wanna maybe follow that a little bit. Justin, it sounds like in Europe, the decision was made in the outlets to pull back a little bit. I think you said there was an investment to drive durable growth going forward after this quarter. Can we interpret that to mean that the intervention in the outlets in Europe was F3Q only, or does that—do you think that you wanna keep doing that in Q4, or is that... Do you think that starts to improve? And then, I guess backing up a little bit, you know, the total company operating margin is really strong here, and that was despite Europe dropping a little bit. I was surprised to see Europe segment margins down a bit, given the explanation that we pulled back on promotions in the outlets. Can you just help us understand the Europe margin a little better, and if you expect that to remain a headwind for a few quarters, or will or how will that roll forward? Sure, Michael. Thanks for the questions. On the last part first, the Europe, we increased our marketing investment in Europe in the quarter, so that's what's pressuring the bottom line. And again, that's been a focus of ours. We've seen really strong, healthy returns out of our marketing. We've talked about how we've been taking up the rate. At Investor Day, we talked about the 7.5-8.5 trend. We took up our marketing rate, a guide for this year to that 7.5-8 range, and we're seeing really nice returns again, not just short term, but both short and longer term returns. So that's what you're seeing pressure the margin. In terms of sort of the way to think about the quality of sales investments in Europe, and really this applies beyond Europe, right? This is sort of our brand elevation strategy philosophy. You know, we're on a continuous elevation journey, right? Our focus remains on driving sustainable top-line growth while continuing to strengthen our quality of sales. And when you think about sort of the strong full price selling that we saw in Q3, it gave us that strategic choice to lean in more, right, notably in the outlet channel and all over the world, right? Not just in one region. So you know, when you think about going forward, we're gonna continue to do the right things for the health of our long-term brand and business while delivering, or in this case, over-delivering on our results in the short term. We've got many quality of sales levers to lean into. One of them is obviously refining our promotions and discounts. And as we get sharper with our customer information and segmentation, our analytics, and we can be more precise and targeted one-to-one with that communication, you're gonna see us continue to refine our discounts and our promotions across all of our regions as we move forward. And there's runway for that refinement in all regions, notably North America, but in all regions to some extent. And if I could just provide a little more color, Michael, on Justin's comment relative to increased marketing in Europe, which we're very excited to do. Europe has a number of key cities that are not fully activated from a marketing standpoint, and the work we're doing with our teams on the ground is to expand our activation across cities. So that's where that incremental marketing is going. We're seeing really good returns, so we expect to continue to drive that as our team executes with excellence, on the ground, but of course, in the context of the broader financial targets that we want to deliver. Next question, please. Thank you. Our next question comes from Adrienne Yih with Barclays. Your line is open. ... Good morning, and let me add my congratulations. Very nicely, nice end to the year quarter, the holiday, Q4 quarter. Thank you. My question is on the Ask Ralph, the implementation of agentic AI. What have you learned, kind of the early learnings, and this is the first holiday that we've really seen that really come to the forefront. What did you learn from this holiday, and how quickly can you deploy those changes? And then, Justin, can you talk about whether the benefit to cotton and possibly freight, perhaps in the quarter as input costs are contemplated, obviously, in the Q4, but how should we think about that going into the early part of fiscal 2027? Thank you very much. Thank you for your questions. Listen, we were pleased to be a leader in this space with the launch of Ask Ralph, the AI, Ask Ralph. It's early days, but we are very encouraging early reviews, and we're deriving learnings on how consumers interact with natural language search, right? This is, that's meaningful change. And also, this provides us with incredible access to high quality first party data, right, which is ultimately the goal when it comes to marketing moving forward. So we're seeing consumers engage across many different fronts and questions, as they're looking for advice on how to style themselves for different occasions, for different weathers, and so on. We're going to expand and add new features. So right now, you will have noticed we don't have our full brand portfolio on it yet. We're going to be adding that shortly. We're also looking further integrated into our overall digital ecosystem. Right now, it's only available on the app in the U.S. You're gonna see us expand that. We're also gonna integrate voice and styling based on images provided by users, which we don't have yet. So it's an incredible platform as a starting point with right now, I would say, a learning experimentation phase that's very promising. And this is a space where we wanna continue to lead. And to some extent, if you fast forward, I think this is the precursor of our consumer agent, right? I mean, today, it's primarily a style agent, but I think as you evolve and look ahead, you can see how Ask Ralph can become really the consumer agent for the customer base that we engage with. And then, obviously, in parallel, right, there's also this whole development in the area of agentic shopping, and we're tapped into that and learning about that as well to make sure that we are set up to meet the consumer where they wanna engage with us and how they wanna shop with us. On the margin question, so taking a step back for Q3, you know, our biggest driver for gross margin was indeed our AUR increase, driven by that promo pullback. But we did see favorable cotton tailwinds and favorable freight, you know, modestly in the quarter that benefited our gross margin. Now, on the cotton side, we're still tracking to deliver that 165 bps benefit that we've called out over the two-year period, fiscal 2025 and 2026. You are seeing that impact moderate as we move through fiscal 2026, as we expected. On the freight side, you know, a little bit favorability in the quarter, but for the fiscal, expected to be roughly neutral. I think as you think about those two input costs, you know, I think looking forward, I think, you know, we're expecting a relatively neutral outlook. Next question, please. Thank you. Our next question comes from Blake Anderson with Jefferies LLC. Your line is open. Hi, guys. Congrats on the nice holiday. Wanted to ask on Q4 as well, just kind of on the margin outlook there. So I know you said the contraction on the operating margin side is mainly tariffs. I think gross margin, you just mentioned cost inflation. Just curious why, why you wouldn't be able to offset that with the continued AUR growth for Q4? Any other conservatism or factors we should be considering? And then as we, as you think about the ability to mitigate tariffs next year, I think you said you, you're looking to be able to do that. How do we think about mitigating those tariffs in the first half of next year? Thank you. Yeah, thanks for the question. Listen, we're feeling really good about what we've been able to deliver with our gross margin expansion. You know, we actually improved our Q4 outlook from our original implied guidance. And, you know, while tariffs have remained largely unchanged, we've been able to mitigate the related cost inflation better than we expected. And we obviously exceeded our expectations in Q3 with that higher price selling and AUR outperformance, which drove our gross margin beat and more than offset the tariff flow through the cost of goods sold, which ramped up in the Q3 as we anticipated. We still expect Q4 to be the most impacted quarter this fiscal year in terms of year-over-year gross margin pressure, and that's consistent with our planned cadence, right? It's a combination of the reciprocal tariffs and the timing shifts we made to accelerate receipts earlier in the fiscal year during the pause periods, and it's been one of our smaller sort of revenue quarters of the year, the transitional quarter between seasons. As I mentioned, the benefit from cotton cost also moderates, and it's worth noting we are up against a very, very strong gross margin baseline in Q4 of last year. But even with that year one tariff pressure, right, we're now expecting 40 to 80 basis points of gross margin expansion this fiscal year, and we've also taken up our Q4 AUR guide to the high single- to low double-digit range. Beyond this fiscal year, we still expect to expand gross margin and mitigate the cost inflation. You'll start to see our broader mitigating actions take shape, country of origin shifts, optimization, merchandising actions. You'll start to see those all come into play as we move through fiscal 2027. Thank you. Next question, please. Thank you. Our next question comes from Ike Boruchow with Wells Fargo. Your line is open. ... Hey, Justin, I just wanted to quickly clarify, sorry, based on the margin guide for Q4, are you essentially SG&A flat, so grosses are effectively flat, up 20 to down 20? Just let me know if I'm looking at that right. And then you mentioned headwinds to start next year, but up for the annual, as you commented relative to your algo. Are there any quarters where grosses should be negative? I'm just kind of curious the magnitude of the margin pressure from tariffs in the first half, if it's large enough to actually put to plan the gross margins down to start in the first half before inflecting. Thanks. Yeah, so when you think about Q4, I really what you're seeing there is, you're seeing from a growth margin perspective, you're seeing the pressure from what I just outlined, sort of the peak tariffs in this transitional quarter and the timing of some of the receipt flow through. That's really the pressure there. And we always expected that to be the most pressured quarter for this fiscal year. I think as we move forward, you think about sort of the tariff ramp up and ramp down period, you know, we know we do start to lap that higher cost base once we get into sort of the mid-fiscal 2027. That being said, you know, it's fair to say that Q4 is really where we expect the peak pressure, and you can see sort of that pressure come through in the gross margin, which is pressuring the bottom line as well. Still feel really good about the view we're delivering, both on the top and bottom line. Obviously, we just raised both our outlooks. Thank you. Next question? Thank you. Our final question comes from Brooke Roach with Goldman Sachs. Your line is open. Good morning, Patrice and Justin. Thank you for taking our question. With your updated operating margin guidance for fiscal 2026 of 100-140 basis points, you're quickly achieving your fiscal 2028 investor day targeted operating margin expansion. Do you see further operating margin expansion opportunity for the balance of the plan? And if so, can you outline the opportunity and the core drivers that we should be considering? Thanks very much, Brooke. Listen, we feel really good about how we're tracking to deliver year one of the long-range plan that we shared back in September at our Investor Day. You know, our three-year plan's off to a strong start. You know, we're not guiding beyond Q4 of this fiscal year today, but we feel good about the broad-based momentum and the strength behind our brand and our business around the world. It's you know, the healthy, sustainable growth that we see across markets, categories, channels. I think that we do expect to continue to balance margin expansion with making strategic investments to drive longer-term growth in each year of our three-year long-term plan beyond year one, right? Our lens is long term, and we're building for the long term, and we wanna deliver attractive, consistent performance on the top and bottom line. Our approach outlined at our September Investor Day has not changed. More to come again when we chat in May. All right. Very good. Well, thank you all for your questions. Thank you for joining today, and we look forward to reconnecting now late, May, to share our Q4 and fiscal year-end results. We're really pleased with where we are three quarters in. Look forward to engaging with you at the end of next quarter. Until then, take care and have a great day. Ladies and gentlemen, that does conclude your conference for today. Thank you for your participation. You may disconnect now.