Ladies and gentlemen, thank you for standing by. Welcome to the Ralph Lauren Fourth Quarter Fiscal Year 2026 Earnings Call. At this time, all participants are in 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. Thank you for joining Ralph Lauren's fourth quarter and year-end 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, Corie. Good morning, everyone, and thank you for joining today's call. As we reflect on this past year, our teams around the world executed with excellence and agility to deliver a strong first year of our Next Great Chapter: Drive strategic plan. We drove broad-based performance across our lifestyle categories, geographies, and channels, all while continuing our long-term journey of elevating our positioning in the marketplace. To our customers around the world who are engaging with Ralph Lauren like never before, we want to thank you for stepping into our world and for your enduring loyalty. From your TikTok posts that feature your interpretation of a Ralph Lauren Christmas, the classic quarter zip, or Team USA gear, to all of you who have waited patiently for a cup of Ralph's coffee. We're inspired by the ways in which you're interpreting Ralph's vision and have made us a part of your everyday lives. Our consumers' passion and unique loyalty are a testament to the power of our iconic brand and our ability to connect authentically across generations and cultures. These deep connections are translating into healthy, consistent, sustainable growth and value creation across our business. In the first year of our Drive plan, both our top and bottom-line results exceeded expectations, supported by our diversified drivers of growth and our strongest quality of sales to date. Our reported full-year revenues surpassed $8 billion for the first time, driven by growth across our retail and wholesale channels in every region. Operating margins exceeded our expectations, reflecting gross margin expansion more than offsetting the meaningful impact of tariffs, and disciplined expense leverage with our cost savings used to fuel investments in our long-term strategic priorities, from our rolling thunder of brand activations to new AI capabilities and expanding our key city ecosystems. This established model of balancing operating discipline and agility with investments in long-term growth gives us the confidence to continue expanding margins, including over the remainder of our plan and longer term. We achieved all of this while accelerating returns to shareholders, including taking up our dividend once again this year. Let me take you through a few recent highlights across the three strategic pillars of our plan. As a reminder, these include, first, elevate and energize our lifestyle brand. Second, drive the core and expand for more. Third, win in key cities with our consumer ecosystem. Starting with our efforts to elevate and energize our lifestyle brand. We are engaging with consumers in more powerful ways than ever before, cutting through cultural moments via sports, entertainment, and style. Our advanced data and analytics are delivering brand activation insights that give us the confidence to further increase our marketing investments to support long-term sustainable growth. Key highlights from the fourth quarter included, first, we reinforced our leadership in the world of sports. As the official outfitter of Team USA since 2008, we were proud to once again participate in the world's biggest stage in sports at the 2026 Milan Cortina Olympics and Paralympics. The spirit of the games and the athletes' passion and pursuit of greatness is authentically connected to our brand values. We activated around the world and across the games with celebrities and friends of the brand, including Usher, Shaun White, Maggie Rogers, Snoop Dogg, and Taylor Swift, who kicked off the opening ceremony broadcast wearing our Team USA Polo Bear tee. Our Olympics activations supported our new customer acquisition and elevation strategies as we achieved the number 1 share of voice across social media and drove further increases in luxury perception, brand relevance, and consideration. We also invited consumers to step into Ralph's vision of timeless style through our women's collection runway show in New York City, our women's Polo presentation in Paris, and our first menswear show in Milan in more than 20 years. Each of these events showcased the effortless elegance of our brand, seamlessly blending heritage with modern sensibilities. In Asia and around the world, we welcome the Lunar New Year with a series of exciting Lunar New Year activations designed to deepen our connection with consumers from our digital red envelopes on WeChat, to our spectacular drone show in Shenzhen, a stunning dynamic constellation that combined our brand's heritage and spirit of optimism with rich cultural symbolism. Around the world, these activations are driving strong, sustainable growth in new customer acquisition and retention. In the fourth quarter, we added 1.4 million new customers to our DTC businesses, a low double-digit increase to last year, led by digital and Ralph Lauren stores. We were encouraged by our continued momentum in building brand equity this year, including increased luxury and value perception scores and our ongoing recruitment of women, luxury, and younger customers. We increased our social media followers by high single digits to approximately 70 million, led by Instagram, LINE, and Douyin. Looking ahead, we remain focused on building brand desirability as we inspire people to step into their dream of a better life. Moving to our second key initiative, drive the core and expand for more. Ralph and our creative teams continue to bring his cinematic vision to life with our commitment to quality and timeless signature styling, capturing the easy elegance of a life well-lived. It's not about chasing fashion cycles or trends. This philosophy shapes how we drive our core products as well as our high-potential and complementary lifestyle categories, enabling us to deliver our unique form of inclusive luxury. Starting with our core, which represents more than 70% of our business. Core product sales grew mid-teens, both for the quarter and full year. Recent highlights include a diverse range of sweaters, linen, and rugby shirts. While our seasonal Bayport cotton windbreakers, chino, and RL67 tweed jackets led the transition into spring. We also introduced our coastal Maine-inspired children's collection, delivering double-digit performance led by our core cable knit, flag, and Polo Bear sweaters and down jackets in Q4. Our high-potential categories, including women's apparel, outerwear, and handbags, continue to be accelerators for our business. Together, these categories increased more than 20% for both the quarter and full year, outpacing total company growth. In women's, we drove outsized performance across multiple categories from our core cable knit and jersey sweaters to lightweight outerwear and colorful linen shirts. Meanwhile, playful iterations of fleece sweatshirts and hoodies are appealing to next-generation consumers. Our oversized windbreaker was the highlight of our Polo fashion presentation in Paris. Our spring handbag campaigns focused on our foundational Polo Plaque collection, featuring bright pops of color, stripes, and seasonal new textures. We also unveiled our newest foundational handbag family at Paris Fashion Week, the saddle-inspired Polo Blaze, which we're excited to launch this fall. Special releases this quarter included our Major League Baseball capsule, featuring an exclusive release in Japan ahead of the World Baseball Classic, and our Team USA collection for the Winter Olympics, reflecting the sophisticated style and bold energy of the games. Moving into fiscal 2027, we will continue to leverage the unparalleled breadth of our lifestyle product offering, both connecting with consumers around the world while driving resilience in our business. Turning to our third key initiative, win in key cities with our consumer ecosystem. From the rich backdrop of our palazzo in Milan during Salone del Mobile to our holiday chalet in Sloane Square and the cozy elegance of a dinner at the Polo Bar in New York, our teams continue to raise the bar for innovative consumer lifestyle experiences. Through our timeless storytelling, we are bringing Ralph Lauren to life in our top 30 cities around the world while also laying the groundwork for long-term growth in our next 20 cities. Within DTC, which comprises the majority of our business, we delivered another quarter of healthy comp growth across regions. Global comps increased high teens on top of 13% growth last year, led by our Ralph Lauren stores and digital commerce. By region, Asia once again led our growth with sales up nearly 30%, driven by all key markets. China sales accelerated to more than 50% growth as we continue to drive our brand desirability and engagement. Our China performance was supported by an exceptionally strong Lunar New Year, along with further expansion across our top six city clusters and on Douyin. Europe also delivered high-quality results this quarter on top of last year's strong compares. We're encouraged by the momentum in our largest region, North America, led by mid-teens retail comps. As we continue to deepen our presence in our top cities, we opened 108 new owned and partner stores globally this year. New store highlights included our new emblematic store at Chengdu IFC Mall in China, along with new stores in Vancouver, London, Munich, New Delhi, Sydney, and more. We also purchased our iconic store locations in New York City's SoHo and on Boston's Newbury Street this year to reinforce our long-term presence in these key U.S. markets. 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 advanced technology, AI, and analytics, we made significant progress in enhancing our creativity, productivity, and customer engagement. We accelerated the iteration of core icons in the design process, successfully integrated automation to support teams in our global distribution centers, and enabled brand discovery across agentic search and commerce. In addition, we were proud to be named one of "Fast Company's" most innovative companies of 2026, recognizing the exciting innovations across our business, from the design and storytelling efforts behind our Polo Ralph Lauren for Vogue collection, to how we are leveraging AI to bring our iconic styling to our consumers' fingertips with Ask Ralph and more. As we focus on enabling resilient partners and communities, this quarter, we announced our expanding partnership with the Council of Fashion Designers of America, CFDA, to provide financial support for American manufacturers who play a critical role in our global sourcing approach. Finally, we are proud to have endowed The Ralph Lauren Corporate Foundation with a $26 million contribution to support the foundation mission, including its work across cancer care in communities around the U.S. In closing, Ralph and I are exceptionally proud of our team's progress. On behalf of Ralph and our leaders, I want to thank you, team, for your excellent execution through this first year of our Next Great Chapter: Drive plan. We met or surpassed each of our financial commitments and key consumer metrics, while also continuing to invest back into our strategic growth priorities, laying the groundwork for healthy, sustainable long-term growth and value creation well into the future. While we are in touch with the dynamic global operating environment, we remain on offense, focused on what differentiates Ralph Lauren and our ability to create value through our diverse growth drivers, including our powerful brand, our iconic core with acceleration in our high-potential categories, and significant geographic expansion opportunities with a focused approach on our top cities, all enabled by our talented team's proven ability to execute. 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. We delivered strong financial performance and made meaningful progress on our Next Great Chapter: Drive strategy in fiscal 2026. We exceeded the expectations we laid out last May with healthy revenue growth across every region and channel, underscoring the strength of our diversified growth drivers and further elevation of our brand, products, experiences, and environments. Gross margin also outperformed our outlook, supported by our compelling value proposition and pricing power, which enabled further improvements in quality of sales, more than offsetting meaningful headwinds from tariffs as we progressed through the year. Each region contributed to operating margin expansion this year, as disciplined expense management enabled reinvestment in our key strategic priorities, supporting sustainable growth and long-term value creation. This strong performance is underpinned by our key enablers, including our talented teams around the world, our advanced analytics and technology capabilities, and our fortress balance sheet. Let me walk you through our financial highlights from the fourth quarter, which, as a reminder, are provided on a constant currency basis. Total company fourth quarter revenue grew 12% ahead of our mid-single-digit outlook, driven by better-than-expected performance in both our direct-to-consumer and wholesale channels. By region, Asia, once again, led our performance, increasing 28%, followed by North America, up 8%, and Europe, up 6%. Total company retail comps increased 17%, accelerating from the prior quarter, with double-digit growth in both our own digital and brick-and-mortar channels. Total digital ecosystem sales, including our own sites and wholesale digital accounts, grew at a mid-teens rate, reflecting broad-based growth across all regions. Total company adjusted gross margin expanded 40 basis points to 69%, compared to our expectation of roughly 100 basis points of contraction this quarter. The expansion was primarily driven by stronger than expected AUR growth and favorable channel mix, which more than offset the planned step-up in U.S. tariff to peak levels, as well as modest headwinds from higher labor and non-cotton material costs. AUR increased 16% in the fourth quarter, with approximately half of the growth driven by stronger full price selling, reduced discounting, and modest targeted pricing, and the remaining half attributable to favorable product, channel, and geographic mix. Looking ahead, AUR growth remains durable and we expect continued, albeit more normalized, mid-single-digit growth in fiscal 2027 on top of last year's 15% increase. In the first quarter, we expect high single-digit AUR growth with contributions from all regions. We expect this continued AUR growth to more than offset modest pressure from higher freight due to the recent increase in energy costs. Adjusted operating expenses increased 14%, or 90 basis points as a percentage of sales compared to last year, as higher marketing investments more than offset 60 basis points of leverage in non-marketing expenses. Marketing was 8.1% of fourth quarter sales, compared to 6.6% last year, reflecting increased investment to support key campaigns, including the Winter Olympics and our fashion presentations in Milan, New York City, and Paris, and to drive brand momentum into fiscal 2027. For the full year, marketing spend increased 21%, reaching 7.9% of sales aligned with our outlook of 7.5% to 8% this year. With strong multi-year progress in new customer acquisition and healthy consumer metrics, we plan to continue growing our marketing investments above the rate of revenue growth to around 8% of sales in fiscal 2027. Fourth quarter adjusted operating margin contracted 60 basis points to 9.7%, while full-year operating margin expanded 140 basis points to 15.4% in constant currency, ahead of our plan. Turning to segment performance and starting with North America, our largest region, which is firmly on a growth trajectory. Fourth quarter revenue grew 8%, exceeding both our outlook and our Next Great Chapter: Drive plan targets, driven by 14% growth in our direct-to-consumer business. In North America retail, fourth quarter comps were up 16%, led by our full price channels. Digital comps increased 21%, supported by merchandising enhancements and full funnel marketing activations, notably around Team USA. North America wholesale revenue was flat and ahead of plan as stronger replenishment orders and full-price selling offset a strategic reduction in off-price sales and further rationalization of lower-tier wholesale doors. While sell-out trends across the broader North America wholesale channel remain healthy, we continue to plan for modest growth in fiscal 2027 in the context of a dynamic macro environment and given the potential for further industry consolidation. We also expect performance to be weighted towards the first half of the fiscal year, reflecting the timing of shipments. Turning to Europe. Fourth quarter revenue increased 6%, with balanced growth across both our direct-to-consumer and wholesale businesses. By market, Germany, the U.K., Italy, and Spain led our regional performance. Europe retail comps were up 5% on top of an extremely strong 18% compare last year, led by our own digital business. Europe wholesale increased 7%, driven by better than expected reorders and healthy sell-out trends exceeding our long-term outlook. Looking ahead, we expect a more normalized level of wholesale growth in fiscal 2027, notably as we lap strong double-digit compares in the prior year with the strongest growth expected in the first quarter. We also anticipate modest headwinds to our EMEA business more broadly due to disruptions in the Middle East, which represents a low single-digit percentage of our EMEA revenue, as well as softer inbound tourism into Europe. Moving to Asia. Fourth quarter revenue increased 28% ahead of plan with all markets contributing to growth for both the quarter and the full year. Retail comps grew 25% with strong double-digit growth in each channel. We continue to build top-of-funnel brand awareness and purchase intent across the region through high impact marketing activations with more to come in fiscal 2027 as we celebrate our 50th anniversary in Japan. China, once again, led our regional growth with sales up more than 50% in the quarter, supported by exceptionally strong Lunar New Year performance, along with healthy comps and high-quality new customer acquisition. Asia digital ecosystem sales increased double digits in the fourth quarter. We continue to expand our elevated presence across Chinese social platforms while scaling our own digital sites in China, Japan, and Korea. Moving to the balance sheet. Our strong balance sheet and cash flow generation remain key enablers as we execute our strategic plan and deliver value to shareholders in a dynamic operating environment. We ended the period with $2.1 billion in cash and short-term investments and $1.2 billion in total debt. During fiscal 2026, we generated approximately $750 million in free cash flow and returned more than $700 million to shareholders through dividends and repurchases. Our Board of Directors recently approved a 10% increase in our annual dividend, reflecting our continued commitment to strong shareholder returns while reinvesting in our business to drive high-quality growth and compelling returns on invested capital. Fourth quarter net inventory increased 5% in constant currency, with a healthy composition of current product in each region aligned with our future revenue growth outlook. Looking ahead, our initial outlook for fiscal 2027 is based on our best assessment of the current operating environment, including the geopolitical backdrop, foreign currency dynamics, and broader macroeconomic trends. Our guidance does not currently assume any potential impact from tariff refunds. Based on ongoing volatility in the environment, this outlook is subject to change as macro conditions evolve. Our fiscal 2027 outlook is aligned with our Next Great Chapter: Drive targets. We expect full year constant currency revenue to increase mid-single digits to last year on a 52-week comparable basis centered around 4%-5%. Fiscal 2027 includes a 53rd week, which is expected to add approximately one point to revenue growth. While our core consumer has remained resilient exiting fiscal 2026 and into the start of fiscal 2027, our outlook reflects prudence around consumer demand as well as modest cost pressure related to recent energy price volatility. Similar to last year, however, if the consumer is stronger than anticipated, we have built the capabilities to capture additional demand, supported by our proven supply chain agility as well as the strength and high penetration of our core and replenishment products, which continue to resonate with consumers across our markets. By region for fiscal 2027, we expect North America revenue to grow approximately low single digits, aligned with our long-term targets, with continued momentum in our direct-to-consumer business and healthy wholesale sell-through, partly offset by ongoing strategic investments in quality of sales and lower tier door exits. We expect Europe revenue to increase approximately low to mid single digits, reflecting solid underlying growth balanced with a measured approach to the consumer backdrop and near-term macro pressures, including elevated energy costs and disruption to Middle East partner sales and tourism, as well as lapping strong fiscal 2026 compares. We expect Asia revenue to increase approximately high single digits, driven by our strong brand momentum and expansion opportunities across key markets. We expect China to grow approximately mid-teens this year, slightly ahead of our Next Great Chapter: Drive targets, as we lap outsized growth of 40% in the prior year. We currently expect full-year operating margin to expand in the range of 40- 60 basis points in constant currency, with modest gross margin expansion and operating expense leverage more than offsetting our continued brand investments, including ongoing quality of sales initiatives, strategic door exits, and further distribution optimization. The 53rd week is expected to have a slight benefit on operating margin for the full fiscal year. Foreign currency is expected to have a relatively neutral impact on both revenue and gross and operating margins in fiscal 2027. Gross and operating margin expansion are expected to be relatively stronger in the first half of the fiscal year, largely due to the benefit of a lower prevailing tariff rate of 10% for most of the period, following the U.S. Supreme Court's ruling earlier this year. Our outlook currently includes a sequential increase in tariff headwinds in the second half of fiscal 2027, which assumes that rates rise above the current 10% level following the expiration of the tariff relief window. Nevertheless, we expect second half gross margins to be in line with our Drive target of modest expansion year-over-year. For the first quarter, we expect constant currency revenue to increase approximately mid- to high-single digits. We expect operating margin to expand approximately 80- 120 basis points in constant currency, led by gross margin expansion. Gross margin is expected to benefit from AUR growth as well as product, geographic, and channel mix, more than offsetting the modest impact of increased tariff cost versus the prior year. Higher marketing in the quarter is expected to be fully offset by leverage of non-marketing operating expenses. Foreign currency is anticipated to have a relatively neutral impact on revenue and gross and operating margins in the quarter. We expect our first quarter tax rate to be in the range of 22%-23% and a full-year fiscal 2027 tax rate of approximately 21%-22%. Capital expenditures are expected to be in the range of approximately 4%-5% of sales, in line with our long-term outlook. This includes traditional capital investments such as new stores, renovations, and digital commerce capabilities as well as our ongoing multi-year next generation transformation initiative. In addition, we will continue to invest in priority areas to advance our AI capabilities and scale cloud-enabled technologies that support our long-term growth and operating model. In closing, our Next Great Chapter: Drive plan is progressing well, supported by our diversified growth drivers globally and the excellent execution and agility of our teams. With top line and AUR growth, as well as gross and operating margin expansion all exceeding our expectations and more than offsetting the impact of tariffs and higher energy costs, we are delivering strong returns. At the same time, we are advancing our elevation journey, improving the quality of our sales and optimizing our distribution to enhance our product and brand experience for consumers. Together, these actions further strengthen our foundation and position us well to drive healthy, consistent, and sustainable growth, reinforcing our confidence to continue investing behind our business, both now and over the long term. With that, let's open up the call for your questions. Ladies and gentlemen if you wish to ask a question, please press starthen one on your touchtone phone. You will hear a tone indicating you have been placed in queue. You may remove yourself from queue at any time by pressing star two. If you are using a speakerphone, please pick up the handset before pressing the number. 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 Matt Boss with JPMorgan. Your line is open. Thanks, and congrats on another nice quarter. Thank you, Matt. Patrice, you exceeded expectations in the first year of this plan. What were the largest drivers, and are they sustainable in years two and three of the plan? By region, North America and Asia for next year, you've outlined in line with your three-year targets. Europe's at the lower end. Are you seeing anything that worries you about the health of the consumer or your brand momentum in Europe? For Justin, 13% global comps this year on top of 10% the year before. What's your confidence in mid-single digit same store sales off this higher base? Just any areas of give back that you would flag at all? Sounds good. Good morning, and thank you for your question, Matt. We continue to be on offense. Our performance is the result of delivering across our multiple drivers of growth. There's no single or one-time element that drove the outperformance. That's really the power of our diversified model. If I take the pillars one by one, first, our brand momentum remains strong around the world. In every region, in every key city that we operate in. We're very encouraged by the ways our teams have been able to connect authentically with consumers, whether they're completely new to the brand or whether they've been with us for decades. This depth of connection across generation, I really insist on the point that cross-generations is such a differentiator for this company, has enabled us to continue our shift toward a more elevated, younger, less price-sensitive consumers, including through this year as evidenced by our increased full price selling that you saw in our results and our stronger retention. On the second pillar, we continue to successfully tap into the breadth of our products across our lifestyle offering. That's another differentiator for us, which is the multiplicity of consumer options and solutions that we provide, allowing us to drive newness and to drive excitement through our distinct styling while staying true to who we are, being very clear on who we are and making sure that we show up consistently around the world. This is a competitive advantage in a world of ever-changing designers and trends. Third, we're bringing innovative lifestyle experiences to consumers through our warm and inviting retail and digital experiences that showcase unique worlds and concepts like coffee that consumers want to step into and become a part of. This helped drive our performance above target in every region, led by our most elevated channels. We are not, to your question specifically on consumer changes, our core consumer continues to be resilient. That is true across all three regions, and we're very encouraged by the underlying growth rates that we're seeing across EMEA, North America and APAC. To answer the second part of your question, our company outlook is right on track with our three-year targets. You saw in our approach last year, as when we began the year and set the plan, we always consider a number of macro drivers as we define our plan. We're feeling good, as I mentioned, about the underlying growth rates that we're seeing broadly, about the resilience and breadth of our consumer recruiting, resilience of consumers around the world. As we noted and you highlighted, we are taking a more prudent view of the Europe operating environment looking ahead, given some of the energy and consumer sentiment pressures that we're seeing there. Now, this being said, I'll reinforce that our brand is strong, that we have multiple diversified drivers of growth, and all of this gives us confidence in delivering on our plan as we come into this year and as the operating environment evolves, as I'm sure it will, we have a proven agility, as you saw this past year, to lean into opportunities. Matt, on the comp question. After our strong year one of revenue growth, moving into year two, as we guided, expecting on algo, total company revenue growth, mid-single digit growth across regions. We feel good about that. Fiscal 2027, still DTC, full price-led growth. No shifts, but one thing to be mindful of is we do have some strong compares, specifically as we get into the second half of the year, but no pull forward of comps. We still feel good about the longer-term year-over-year expectations on revenue growth and comps that we shared at our Investor Day back in September. Thank you. Next question, please. Thank you. The next question comes from Jay Sole with UBS. Your line is open. Great. Thank you so much. Justin, year one of the Next Great Chapter: Drive plan was clearly ahead of your three-year targets, while this year, fiscal 2027, it looks like it's more back to on auto. Can you just walk us through how you're thinking about investment priorities to continue driving strong momentum into the future and balancing growth investments with margin durability? Also, if you can tell us how you're thinking about marketing as a percentage of sales for this year, that would be helpful as well. Thank you. Absolutely. Good morning, Jay. Thanks for the question. We successfully step changed our top line growth trajectory over the last few years of our Next Great Chapter journey. Importantly, our core investment priorities, they remain consistent, right? We continue to be focused on three key areas. First, reinforcing our iconic brand and creating authentic, lasting connections with both new and with existing consumers. Second, reinvesting back into our product, elevating quality, driving innovation, ensuring we're presenting a compelling value proposition to customers. Third, building out our key city ecosystems globally, including with digital and AI-enabled capabilities to deliver that differentiated full lifestyle experience that's really unique to Ralph Lauren. At the same time, a critical enabler of our sustainable growth is continued brand elevation. This underpins all three of the priorities I just talked about. It includes investing behind the quality of our sales. Think things like strategically reducing discounting and off price, increasing full price selling, further optimizing our distribution. Even as we leaned into meaningful quality of sales enhancements this past year, if you take a look at the most significant pressures throughout the course of our elevation journey, in fiscal 2026, we were able to inflect back the positive unit growth to the total company, drive healthy quality growth in our global wholesale businesses, and return North America, our largest region, to a sustainable growth trajectory, all while continuing to drive really strong momentum across APAC and EMEA. Taken together, this puts us at our most elevated position to date across product, brand, distribution, and enables us to continue to drive that healthy, sustainable growth going forward. On margins, we've demonstrated over the past several years, we can successfully do that balance of reinvesting with expanding. That remains a core focus of ours going forward. As we guided, we expect both gross and operating margin expansion in fiscal 2027, more than offsetting modest increased pressure from freight and from potential tariffs. We remain confident in our year-over-year margin progression that we laid out in our three-year plan back at Investor Day in September. On the marketing investments. If you step back, Jay, if you recall a few years back, we were around 3.5% of revenue in marketing when we started on this journey. Now we're just a tad below 8%. I think we finished the year at 7.9%. We expect to get to 8% this fiscal year. That's what we're guiding for this fiscal year. There is no ceiling to our marketing investment as a percentage of revenue. The key driving factor here is the return on investment that we get. I have to say, our marketing teams around the world have done an excellent job expanding the portfolio of activations so that we, one, continue the strong new consumer recruiting that we're doing across the board, disproportionately higher value, less price sensitive, younger consumers. Two, continue to build retention and lifetime value. That is what is so exciting about our business model, is we can bring you in on a specific product, but then we have the ability to take you, either by trading you across or trading you up, across the very broad range of products that we have to offer. Think 8% for this coming year. Again, we experiment around the world. We are constantly trying new things. You saw some fun activations recently with American Icon stamp collection that was designed and launched with Ralph Lauren. We had a catwalk book that summarized all the amazing collections that Ralph and our teams have developed over the past decades. We are going to continue to have a range of foundational elements to our plan around fashion presentations. We had three this last quarter, Paris, New York, Milan. Sports activations. We obviously had the Olympics. We're coming on to Wimbledon and then the U.S. Open. Cultural moments and cultural engagements. Those are the foundational elements combined with innovation, and I expect that we'll continue to expand marketing as a percentage of revenue over the years to come. As Justin rightfully said, we will do that in concert with expansion of operating margin for the company. Thanks, Jay. Next question, please. Thank you. The 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 follow up on Europe. Justin, I think as you mentioned, the guide for both in mid-single digits. If I heard correctly, you expect the strongest growth in the first quarter. Maybe can you unpack that a little bit more, what you're seeing in that market? I think you also anticipate modest headwinds for EMEA, particularly it sounds like more of inbound tourism. I'd love to hear, maybe can you quantify what your expectation is in terms of that headwind? That would be very helpful. Thank you very much. Thanks, Laurent. We continue to see healthy underlying demand across our EMEA business, really supported by a resilient core consumer. That fiscal 2027 outlook that you referenced, it reflects a more prudent view of the broader operating environment, right? If you think about, take a step back, our core consumer remains resilient in all three of our regions, right? Especially as we shift our customer base to be more full price and less price-sensitive quarter-over-quarter, year-over-year. That's including in EMEA, where we continue to drive healthy underlying growth. We expect that growth to continue in fiscal 2027. We're guiding for growth both in Q1 in that low single-digit range and on the lower end of our algo for the full year. That said, we are mindful of the macro pressures, right? The higher energy prices and sentiment pressures. We've taken these factors into account with our initial fiscal 2027 outlook, which reflects that more prudent view of the operating environment. We're also, to your point, monitoring tourism trends closely given the Middle East conflict, and which we've seen soften a bit, but they do represent a very small portion of our business, Laurent. I mean, our total Middle East business is low single digits of Europe and when you add on tourism, you're still at low single digits of Europe, even a smaller percentage of the total company. Monitoring closely. We'll continue to stay in touch with the environment that we're operating in as always, as it evolves. We know we have a proven agility, as we saw this past year, to respond if the consumer is stronger than we anticipate. Next question, please, Julie. Thank you. The next question comes from Michael Binetti with Evercore. Your line is open. Hey, guys. Congrats on a great quarter. Let me ask to Patrice category expansion. You mentioned the focus categories grew 20% in the quarter and in the year. Can you just tell us a little bit about how those contribute to the mid-single-digit growth this year, or just bigger picture, how they contributed to AUR in 2026, and maybe talk a little bit about the opportunities for those categories to continue to outpace growth longer term? Then Justin, in the fourth quarter, AUR was up 16%, DTC comps up 17%, so it implies very low unit growth. If you think about the 4%-5% total growth this year, DTC faster than wholesale, AUR, you said up mid-singles again. I'm gonna ask probably for the ninth year in a row here. It seems like you're expecting units to decline in DTC again, despite all the new customer additions, new store growth, new markets, new categories. How does the algorithm for unit growth work in your head this year, Justin? All right. Well, you're consistent, Michael, that's good. Regarding accelerator categories, we coin them accelerator categories because we expect them to be accelerators to our performance. You saw that indeed they were accelerators for this fiscal year, fiscal year 2026. We expect that to continue next fiscal year. As we guide mid-single digits, we expect these three categories to over-deliver versus that. What's super exciting is while we're building scale across the three of them, the size of prize continues to be massive, right? If you think about our women's apparel business in particular, across collection, Polo women and Lauren, we have about a 1% market share. While we're already meaningful in terms of size, that's close to a $2 billion business. There are actually very few women's apparel brand in these price tiers of that size. We're only a 1% market share. Still significant runway, and the same applies across outerwear, and we're even earlier on the journey on handbags. I feel very good about the fact that these will continue to be accelerators for us. Of course, we need to execute with excellence, but that's what the teams are focused on. If you look at this coming fiscal year on handbags, we have an exciting launch with the Blaze addition to the women's Polo collection. In addition to Polo ID, which is now an established pillar, and Polo Play, which is also becoming a foundational element of our women's Polo handbag presentation, we'll be adding a third pillar with Blaze. Energized by how that will contribute to continued performance for our handbag business. On the AUR front, these categories are all AUR accretive. Right? If you look at the kind of price points that we play out across both women's apparel, outerwear, and handbags. We expect as you've seen continued strong AUR growth, I think we're on our 36th quarter of AUR growth, obviously mix is a key factor here and product mix is an important element here. These accelerator categories will certainly contribute to that moving forward. Justin, over to you. On the units versus the AUR question, Michael. Our top-line outlook for fiscal 2027 of that mid-single-digit growth, it continues to be supported by our three diversified revenue drivers, right? High-value new consumer acquisition, durable AUR growth, and targeted unit growth. There are both durable drivers and meaningful runway ahead of us for all three of these top-line growth engines. On units, we did inflect, as I mentioned, to total unit growth in fiscal 2026 as our elevation journey continues to progress. The growth in units is where we want it to be, right? Full price, high potential categories that Patrice just talked, digital, China, et cetera. It's now more than offsetting the step change elevation in those channels that still have more distorted opportunities for elevation, like outlets. That all said, we're on a continued elevation journey. We do expect AUR to continue to lead our growth and outpace units. We also expect units to continue to be slightly up as we think about our fiscal 2027 outlook. Now, we do assume some plasticity around units, largely in EMEA, given the macro pressures there. Overall, we feel really good about our three diversified, durable, top-line growth drivers, and you see it reflected in our on algo guide. Next question, please. Thank you. The next question comes from Kendall Toscano with Bank of America. Your line is open. Hi. Thanks for taking my question. On wholesale, both North America and Europe outperformed in the fourth quarter. As you plan for more normalized growth in fiscal 2027, curious what you're seeing today from your wholesale partners and how much of the normalization is conservatism as opposed to a change in the underlying demand environment. Thanks. Sure. We'll probably tag team on this one. Good morning, Kendall. Just to step back, strategy on wholesale is now about 30% of the company, right? 70% DTC, 30% wholesale, primarily, as you noted, EMEA and North America. We have a three-pronged strategy on wholesale, which is win with the luxury players. Think the Nordstrom, Harrods, La Rinascente, Bloomingdale's of this world. We're seeing very strong interest from these players now in our brand. I wouldn't have said that a few years back. We've got very good momentum and share gain there. Second is winning digital wholesale. Think the big players, the Zalando of this world, the macys.com of this world. We're seeing very strong disproportionate momentum. I think our scale and the breadth of our portfolio is certainly supporting that performance. Third is key doors within premium wholesale. We're really encouraged by the share progress that we're seeing across every single category, which really indicates that the partnership that we have with these different department stores is working very well for us. What particularly feels really good is we're aligned on the elevation strategy, which wasn't necessarily the case a few years back. We're all rowing in the same direction, and we're seeing strong momentum across the board. I'll let Justin provide additional color. Yeah, we are, to that point, Patrice, really healthy quality growth across our wholesale businesses. In terms of the normalized growth rate, for North America, we expect that normalized rate to be in that up low single-digit range with some prudence in the near term, given the context of the dynamic macro environment and given the potential for further industry consolidations. I would just say that our underlying organic growth rate is going to continue to be partly mitigated by ongoing brand elevation reinvestments, right? As we pull back on off-price, and as we continue to cull that lower level distribution. We are guiding for North America, up low single digits on ongoing fiscal 2027 with both growth in DTC and wholesale. DTC on the higher side and wholesale on the lower side of that up low single digit growth. On EMEA, our outlook for fiscal 2027 is really in line with that regional guide for the full year of up low to mid-single digits, reflecting a little bit of prudence on the macros and some unit elasticity for full 2027 orders. Underlying normalized growth rate there is consistent with what we've been seeing out of that channel, which is that mid-single digit growth, and that's what we saw in fiscal 2026 and for a number of consecutive quarters now. Thanks, Kendall. Next question, please. Thank you. The next question comes from Blake Anderson with Jefferies. Your line is open. Good morning. Thanks for taking my question. I wanted to ask on AURs. That continues to be really strong at double digits, despite all the macro dynamics. I know your guidance is closer to mid-single digits. We've talked about AUR today. I just wanted to drill down on a bit more on the outlet channel and the opportunity there, especially at U.S. and Europe. How much opportunity is there really from continued promo optimization? You talked a bit, Patrice, about the product mix. Be curious about that as well. Thanks so much. Thanks for the question. On the AUR outlook, yes, we expect AUR growth to remain healthy and durable as we think about fiscal 2027, albeit at a more normalized level following the outperformance we delivered over the past year plus. We're guiding in that mid-single-digit range. That does reflect growth across all of our regions and really across all of our channels. Outlets has always been the channel that probably had the most runway when we started the elevation journey. It's where we've made the most progress on AUR growth, and it's where we probably still have the most opportunity as we look ahead. If you think about discount rate as an example, so many levers to assess and activate, frequency, depth, duration, breadth, what product is included within promotion. As we get sharper with product performance analytics, customer segmentation, leveraging AI, we're going to be able to get more precise and more targeted with our offers, tailoring specifically to customers by stores, by channels. I would say that across all of our regions, still a lot of opportunity there, and it's not just around the targeted marketing communications and product offering, but it's also about as we elevate the mix in those outlet channels, that is a pretty meaningful driver of our AUR growth. Blake, on the product mix, you're absolutely right. I think what we're doing actually in outlet is very consistent with what we're doing actually across all the channels, which is elevating the mix. In outlet, what you'll see is more emphasis on sweaters, more emphasis on outerwear, more dedicated space on handbags, right? Better presentation of our shirts. You're going to see less of our traditional big T-shirt rounders that might have historically been right smack in the middle of the section where, of course, they're still available because consumers are looking for them and interested in them, but they're no longer front and center as we focus the energy and the activation on these higher AUR categories. We're seeing a very nice response from consumers across the world on this shift. If anything, Blake, I would tell you we're surprised on the upside on the types of price points that we can actually implement within outlets. We're seeing, particularly on our women's products, some of the leather outerwear, which are relatively elevated pricing, are getting very strong response. We are encouraged by the momentum we're seeing there, and I think that journey of mix elevation within outlets as we change and evolve the overall experience for the consumers, we lean into clienteling as we enhance the environment, is designed to be productive and effective for many years to come. Thank you. Next question, please. Thank you. The next question comes from Bob Drbul with BTIG. Your line is open. Hi. Good morning. Congratulations. Great results. Thanks, Bob. I guess the question I'd like to focus on is China. When you look at the trends in China, the cultural tolerance, can you just unpack it a bit in terms of how you see this year playing out with these strong results? Sure. We love talking about China. It's part of our diversified growth driver. First zooming out a little bit, because obviously the numbers are particularly strong this past fiscal year, up 40% total fiscal year, up 51% this last quarter. If you look back past four years now, we've been growing at above a 20% rate in China. This is not a one-off. This is a result of sustained implementation of our strategy and excellent execution by our teams on the ground. The China opportunity remains a major opportunity for this company, mid and long term, if you look at the penetration of our business there and the runway that we still have ahead. A few things to call out. One is consumers are really gravitating towards the core values that Ralph Lauren represents, the values of authenticity, of timelessness, of quality, of entrepreneurship, of optimism. Not only are they attracted by our products, but they want to be parts of that world. Two is we're actually recruiting broadly across generations. We're obviously excited about the momentum that we have within the Gen Z population, but we're seeing appeal very broadly, as we had seen historically in other core markets. Three is the teams have done a really nice job balancing the global campaigns and programs that we implement, and then local activation. Local activation ranges from marketing to digital commerce. You've heard us talk about our activations on Douyin. Our women's Polo Douyin shop is doing incredibly well. We just reopened our men's Polo shop and encouraged by the initial results that we're seeing there. I think that combined with the focus on these six key cities, resisting the temptation to go too broad, to go too fast. We're working really hard to pace. I know the numbers don't necessarily show that, but working really hard to pace our growth because we're in China not just to win this year. We're in China to win for the next 10 and 20 years and really make sure we're building the right foundations for the long term and staying close to that consumer and making sure that he and she sees both the luxury perception the way we intend it and also sees the value in what we have to offer. Looking to next fiscal year, we have guided to mid-teens for China performance, and feel that that's the right number based on what we're seeing in the market and based on the plans that we have today. We'll take one last question, please, Julie. Thank you. Our final question comes from Paul Lejuez with Citigroup. Your line is open. Hey, thanks, guys. The sponsorship of the Winter Olympics would seem to provide nice platform for the brand. I'm curious what kind of activations you're most excited about for this upcoming year, how that differs by region. Can you do anything tied to the World Cup? That's my first question. I was just curious on the margin expansion guidance, how much of that is simply regional mix versus region versus itself margin expansion? If you could talk about the dynamics of margins within each region. Thanks. Sounds good. Good morning, Paul. Yeah, we were really pleased with the response we saw from consumers actually around the world on the Winter Cortina Olympic activation, and our teams did a great job, both in terms of overall campaign and also activations online and in our stores. We were proud that in a world that's pretty crowded with a lot of brands activating the Olympics, we had the number one share of voice during that time. Our philosophy, Paul, on our marketing approach is diversification, right? We have a broad range of marketing activations every year, and we have this notion of always-on rolling thunder of marketing activity. As I look ahead, it's going to be really challenging, Paul, to point to one specific one because we really don't build the plan that way. Well, we just had the launch of the American Icon Stamp collection, which we're, I think, officially launching in two weeks. We have our men's show coming up in Milan pretty soon. We just had a presentation in Salone. We have Wimbledon. We have the U.S. Open. We have a women's collection show in the fall. We're celebrating our 60th next year. We are celebrating 50 years in Japan this year. We're celebrating the 40th year of our Madison Avenue store, the Omotesando store in Tokyo this year. You're going to see a continued rolling drumbeat of marketing activation. They won't mirror one-for-one what we've done in the prior year, because that's not how we think. We will have a program that will bring energy, excitement, and interest to bring in new consumers as we've been doing consistently quarter-on-quarter, and also to continue to energize and engage our loyal customers. Paul, on your operating margin, all three regions are expected to contribute to op margin expansion in FY 2027, including North America. We've got opportunity on gross margin expansion with our durable AUR growth drivers, as well as on our SG&A expense leverage as we start to scale some of the fixed target investments that you've seen us make over the past couple of years. Paul, I didn't answer your World Cup question. We're not sponsors of the World Cup. Just trying to be choiceful in terms of where we engage. We will activate in different ways across our stores to take advantage of the energy around the World Cup. Go France. On that listen, I want to thank everyone for joining today's call. We look forward to reconnecting with you in the middle of the summer, early August, to share our first quarter results. 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 now disconnect.