Question · Q1 2026
Alex Dennis inquired if buyers are trading down to value-oriented products, the key factors influencing the gross margin outlook amidst tariffs and sourcing costs, the progress and challenges of moving production outside China, and strategies to broaden the e-commerce channel mix.
Answer
Brian D. Murphy, President and CEO, addressed consumer shifts, noting some trading down among retailers but strong performance for their premium/enthusiast products. Andy Fulmer, CFO, and Brian D. Murphy discussed gross margin factors, including tariff monitoring, cost concessions, and fluid pricing adjustments. Murphy detailed the progress and challenges of shifting production from China, emphasizing quality and cost-competitiveness for specialized products. Murphy also explained that traditional retailers' e-commerce growth might be obfuscating the full e-commerce picture, and their strategy is to be where the consumer expects to find them.