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CFO Ivica Krolo explained that the company believes the 15% baseline tariff is manageable through pricing actions already taken and other levers like manufacturing efficiencies. He confirmed that while DTC growth will accelerate in Q4, B2B growth is expected to outpace DTC for both Q4 and the full year, driven by the consumer shift to in-person shopping.

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President of Americas David Kahan stated there has been no change in demand or sell-through trends and that the company manages its inventory flow based on stock-to-sales ratios, not in reaction to tariff timing. Executive Megan Kulick clarified that the fiscal third quarter, not the second, is seasonally the slowest growth quarter due to product mix.

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President Americas David Kahan highlighted the loyalty program's success, with membership up 30% YoY to 8.8 million. He noted members account for nearly 50% of D2C business and have a 30% higher spend per transaction. CSO Klaus Baumann addressed the APAC question, stating that while Q1 was strong, the company maintains its expectation for the region to grow at double the rate of mature markets, implying a normalization of the growth rate.

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CEO & CFO Martin Hoffmann stated that improved demand planning and merchandising capabilities allow the company to operate confidently with lower inventory levels without constraining sales, preferring a position where demand slightly outpaces supply. Regarding wholesale, he confirmed the strategy remains a selective, mid-single-digit growth in doors. He noted that strong brand momentum, evidenced by nearly 40% D2C growth in the Americas, allows them to achieve growth targets by focusing on premium same-store performance rather than aggressive door expansion.

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Executive Co-Chairman Caspar Coppetti explained the Cloud 6 is attracting a younger consumer and that a $10 price increase has seen no negative impact on demand. Co-CEO Martin Hoffmann clarified the April comment demonstrates sustained brand strength but declined to give a quarterly guide. He contextualized that the full-year outlook of at least 28% growth is well ahead of their long-term plan, driven by key strategic initiatives.

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Co-CEO Marc Maurer clarified that wholesale moderation was partly due to strategic door closures in Europe, not just inventory, and that sell-out demand remains very strong. An executive, likely CFO Martin Hoffmann, stated the Atlanta DC automation is on track for H1 2025. While it will have a higher fixed cost base, the financial benefits will scale with volume, and a more detailed outlook will be provided in the Q4 call.

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CFO Jesse Timmermans noted that while there was some comp pressure internationally in July, the overall trend was positive. He explained that the Q3 margin guidance reflects a greater negative tariff impact than in Q2, which is partially offset by improvements in markdown algorithms and owned brand expansion.

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CFO Jesse Timmermans stated that the company is not altering its markdown strategy in response to consumer behavior, as it is driven by internal algorithms to optimize inventory. He also confirmed that due to their customers' 'buy now, wear now' purchasing patterns, they did not see any meaningful evidence of demand being pulled forward.

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CFO Jesse Timmermans declined to provide specific breakdowns but confirmed that quarter-to-date growth was seen across both segments and both geographies. Co-CEO Michael Mente stated that the investment for the Revolve Festival would be in a similar dollar range as the prior year, with a continued focus on improving returns.

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Chairman and CEO Edward Rosenfeld quantified the DTC headwinds, estimating a 110 basis point comp impact from the systems implementation and a 160 basis point impact from tariff-related inventory disruptions. He noted a slight improvement in DTC comps in July versus Q2. Rosenfeld stated that providing a timeframe for returning to double-digit margins is impossible until the tariff situation is clear, but affirmed he believes Kurt Geiger has the potential to be a higher-margin business over time.

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CEO Ed Rosenfeld attributed the Q1 gross margin beat to a strong March, effective inventory management, and a favorable mix shift towards higher-margin branded products. He stated FX was not a significant factor and confirmed tariffs had a 20-basis point negative impact in Q1, which will be more significant in Q2. He described April's DTC trends as slightly softer than March but still healthy, without a major uptick in promotions.

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Chairman and CEO Edward Rosenfeld acknowledged a slow start to the year in DTC, particularly for spring products, which he attributed to potential factors like cold weather and declining consumer sentiment. He justified the Kurt Geiger acquisition as a strategic opportunity to acquire a high-growth, complementary brand at an attractive value. He noted that while Kurt Geiger sources 85% from China, its overall tariff exposure is limited as only 35% of its business is in the U.S. The acquisition is expected to contribute approximately $0.10 to EPS in 2025.

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CEO Andrew Rees confirmed that the strong gross margins are sustainable, attributing them to efficient vendor negotiations, logistics infrastructure investments, and a favorable customer channel mix. He stated that pricing is a key lever they will use strategically, expecting industry-wide increases. While they have initiated small, targeted price adjustments, they are currently in a 'wait-and-see' mode while conducting preparatory analysis.

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CFO Susan Healy stated that full-year gross margin will be down slightly, absorbing a 60 basis point headwind from FX and tariffs. CEO Andrew Rees noted a dynamic Q4 promotional environment where consumers shifted towards value. For HEYDUDE, Rees reiterated that the recovery is on track, with guidance embedding positive DTC growth driven by digital and 10 new outlet stores, but does not assume wholesale growth in 2025.

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CFO Susan Healy emphasized the company's disciplined approach to investments, with strong scrutiny and KPIs, noting they pivot nimbly when needed, as with HEYDUDE's marketing. She reiterated that 2024 and 2025 are investment years that will create incremental EBIT margin pressure, and the company expects to be below the 25% operating margin achieved in the current year.

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CEO Andrew Rees did not provide a specific dollar figure but stated that without the promotional pullback, Q2 North America revenue would have been only 'down slightly' instead of the reported 6% decline. He argued the broader athletic trend impacting their specific consumer base has recently accelerated. CFO Susan Healy did not quantify the international timing shift, noting such shifts are a regular part of their distributor business.

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CEO Christopher Hufnagel attributed Merrell's growth to broad innovation across hike, trail, and lifestyle, noting share gains in all three categories despite pressure in the overall hike market. He affirmed the company's commitment to improving Sweaty Betty's profitability. He also confirmed his earlier comment that Saucony had seen acceleration since early April, though it was a very early data point.

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CEO Chris Hufnagel confirmed a responsible expansion of Saucony doors throughout the year, many online, and noted Merrell is also opening new doors with a focus on the female consumer. CFO Taryn Miller stated that while pleased with gross margin progress from cost savings and full-price sales, there are still opportunities in sourcing and SG&A to fuel growth and work towards the long-term 45-47% goal.

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CEO Christopher Hufnagel confirmed that collaborations are a critical tool for driving brand heat and that the pace will likely increase for both Saucony and Merrell. CFO Taryn Miller clarified that the modest adjustment to the Q4 operating margin outlook was due to a discretionary increase in performance marketing spend to support growth, noting that margins still show strong year-over-year expansion.

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Executive John Vandemore clarified that the commentary was more about 'what we're watching than what we've seen,' driven by third-party consumer confidence indicators rather than a notable change in business trends in April. Regarding CapEx, he stated that no decisions to pull back have been made yet, and the company will continue to invest in projects that make long-term business sense, emphasizing the desire to not fail to take advantage of growth opportunities.

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John Vandemore (executive) explained that comfort technologies are features embedded across a wide array of products, with continued momentum in Slip-ins and Arch Fit. The slight ASP decline was due to broadening the technology across more price points and including some styles in promotions. He expects price stability or slight improvement in 2025. He also noted that while there was a minor freight headwind in Q4 and some expected in early 2025, it is not a major driving factor.

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CEO Mary Dillon described the current consumer as cautious, responding to key events but hesitant during lulls, a dynamic factored into the 2025 outlook. CFO Michael Baughn elaborated that the guidance range reflects this uncertainty, with the low end assuming continued caution and the high end a more stable macro environment. Baughn also explained that SG&A is modestly leveraged when excluding the normalization of incentive compensation, and the company continues to work on long-term cost structure improvements.

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CEO Mary Dillon expressed satisfaction with the loyalty program's launch and its path toward the long-term 50% penetration goal. CFO Mike Baughn detailed that the Q4 earnings ramp is driven by multiple factors, including lapping last year's promotions, scaling the loyalty program and store refreshes, a new mobile app launch, and the return to growth with Nike.

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Executive David Reeder noted that private brands have been stable, with future growth initiatives not yet reflected in results. CEO Sumit Singh reiterated the long-term goal for private brands to reach mid-teens sales penetration and add up to 500 basis points to gross margin. Regarding automation, Singh confirmed six fulfillment centers are automated, with the program on track to touch over 70% of volume and deliver previously stated benefits of up to 50% in productivity improvements.

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CFO David Reeder addressed both questions. On net adds, he reiterated the full-year guidance for a roughly flat customer count, stating it was too early to update the outlook despite a strong first half. For gross margin, he ranked the primary drivers as: 1) the growth of the high-margin sponsored ads business, 2) a favorable mix shift towards healthcare, and 3) increasing leverage from scaled fulfillment operations.

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