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CEO Brad Nelson explained that the significant inventory reduction in FY25 allows for wholesale growth in FY26. He characterized the planned FY26 destocking as a 'fine-tuning adjustment' to increase dealer turns amid market uncertainty, not a major reduction. CFO Scott Kent added that any destocking would be modest, spread throughout the year in response to retail trends, and not necessarily front-loaded in Q1.

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CEO Bradley Nelson explained that the company is actively modeling scenarios that could include both traditional price adjustments and a more variable pricing model to cover input costs, though no final decisions for model year 2026 have been made. CFO Timothy Oxley added that they have discussed the variable nature of tariff-related costs with dealers, noting that the potential temporary nature of tariffs supports a variable pricing approach.

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CEO Bradley Nelson stated the company is proactively modeling various scenarios to balance volume, price, and cost. He indicated a move toward a more variable pricing model is likely, in addition to traditional price adjustments, to manage tariff volatility, though no final decisions have been made. CFO Timothy Oxley added that they have discussed the variable nature of these costs with dealers, noting that the potential temporary nature of tariffs lends itself to a variable pricing approach.

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President and CEO Rati Sahi Levesque asserted that the growth is not a 'one-time benefit,' as it's the second consecutive quarter of double-digit growth and is directly attributable to internal initiatives like the referral and Reconsign programs. CFO Ajay Gopal quantified Athena's impact by pointing to the 310 basis points of leverage on the ops and tech line in Q2 and reiterated the goal of taking out 'multiple dollars of cost on a per item basis' as it scales.

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CFO Curtiss Bruce confirmed that the record 40.4% gross margin was driven by a favorable mix of both higher-margin products and channels, including the strategic de-emphasis of the honest.com business. Regarding apparel, he highlighted its expected contribution in the second half of the year, driven by the award-winning 'Fam Jams' line, and noted its role in the strong Q4 performance anticipated in the company's full-year guidance.

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CEO Carla Vernon clarified that the deceleration was largely isolated to their diaper business at Target, following a distribution change involving the removal of gendered prints. She contrasted this with nearly 20% consumption growth in the rest of the market. Vernon noted that while categories have slowed, Honest's 8% consumption growth significantly outpaced the competitive set's 1% decline, indicating resilient demand for their products, particularly in the sensitive skin segment.

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CFO David Loretta explained that while some 2024 pricing benefits have been lapped, the cost savings from supply chain optimization are structural and ongoing. He noted that margin expansion in 2025 will be supported by a favorable product mix and the continued, deliberate shift away from the company's less efficient DTC channel towards more scalable retail partner platforms, which offer superior cost structures.

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CEO Carla Vernon confirmed that Prime Day is a powerful tool for acquiring new-to-brand shoppers, noting that strong performance on the platform boosts search rankings and drives trial. CFO David Loretta addressed the China sourcing risk, acknowledging that the wipes portfolio is sourced there. He stated the team is proactively working on diversification and cost-reduction plans to mitigate potential tariff impacts and does not expect a material impact in 2025.

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CFO Michael J. Yates explained the Adventure segment is focusing on basics, such as increasing vehicle fits to 579 and rationalizing NPD for high-return projects. He noted promotional sales of older inventory impacted margins but improved cash flow. Neil Fiske, President of Black Diamond Equipment, confirmed that reduced PFAS clearance was a factor in lower discontinued sales but also highlighted a strategic shift towards a full-price model and a healthier overall inventory mix.

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The company is focusing on basics in the Adventure segment, such as increasing vehicle fits for top-selling models and creating a nimbler organizational structure. Promotional sales in Adventure were to clear out old inventory, which boosted revenue but dragged on margins. The reduction in discontinued Outdoor sales was indeed impacted by clearing less PFAS inventory this year, but is also part of a broader strategic shift towards a full-price model to improve margins and buffer against tariffs.

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The Adventure segment is no longer using the off-price channel and is instead focusing on specialty distribution, such as specialty auto rack and bicycle shops. Distribution is expanding, not on hold; bike rack doors have increased from 300 to 800, driven by the RockyMounts acquisition. Black Diamond believes it was one of the first in its industry to transparently raise prices to offset tariffs and expects competitors will have to follow suit.

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CFO Michael J. Yates confirmed that the Outdoor segment is targeting a double-digit EBITDA margin on its guided $175 million revenue for the full year, with performance weighted to the second half. McNeil Fiske, President of Black Diamond, stated it was too early to see a material impact from tariff discussions on ordering but noted consumer sentiment has been 'a little bit rattled.' Both Yates and Fiske explained that IGD inventories are normalizing after lagging North America, with the business exceeding expectations in Q4.

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CFO Mike McLamb affirmed that their long-term view on the boating lifestyle's appeal has not changed, despite the current pause. CEO Brett McGill noted that the soft June quarter necessitates ongoing inventory recalibration with manufacturers. Regarding July, McGill highlighted that innovative new models continue to sell well and that the month did not suffer from the 'cliff effect' that hampered April.

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Executive William McGill stated there has not been an increase in order cancellations. He also confirmed that current inventory levels will carry them through the season and that they are working with manufacturers to mitigate any potential price increases on future model year products. Executive Michael McLamb added that MarineMax has a history of successfully passing on necessary price increases in the premium segment.

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CEO Mike Dennison clarified that in the bike business, Fox delivers products to OEMs within Taiwan, so the direct tariff impact is more on their partners. He explained that product mix improvement is happening across all segments, driven by focusing innovation on higher-end, more profitable products and expanding the portfolio in categories like premium wheels, which helps the company pivot during volatile periods.

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CEO Mike Dennison clarified that FOXF's premium truck partnerships (Ford, Toyota) are somewhat insulated, but consumer demand could be impacted by inflation from tariffs. He noted Stellantis is rebounding from 2024 lows. He affirmed that Marucci is expected to be a double-digit growth business in 2025, citing its record 2024 performance and new product pipeline.

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CFO Dennis Schemm stated that after prolonged OEM uncertainty, the company is taking decisive action to improve margins through footprint consolidation, product portfolio optimization, and inventory reduction. CEO Mike Dennison added that returning to historical EBITDA margin levels strengthens the brand and positions the company for exponential growth when demand returns. An executive also noted that predictable margins enable continued investment in growth initiatives like the Marucci MLB partnership.

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Executive Matthew Reintjes described a multi-layered allocation strategy that is product-dependent rather than channel-biased. Decisions are based on supply levels, with some products launching internationally, others being constrained across all channels, and some being delayed to build sufficient stock. CFO Michael McMullen added that the company is using this period to learn how to operate with lower inventory levels going forward.

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CEO Jeremy Andrus stated they have not sensed a reluctance from retailers to take on inventory, though there has been a shift from direct import to domestic fulfillment to navigate tariff complexities. CFO Dom Blosil clarified that the company is planning inventory conservatively, reducing purchase orders to avoid a future destocking issue. He emphasized that current inventory on hand is sufficient for near-term demand, allowing them to pause new orders and react to demand signals during the peak season before re-ordering.

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CFO Dominic Blosil explained that the company is conservatively forecasting MEATER's performance and that any potential inflection would be upside to the current guidance. He noted it is too early to determine if advertising ROAS has normalized for MEATER, as Q1 is not a significant quarter for the brand. Blosil clarified that the anticipated Q1 decline is reflective of multiple segments, driven by uncertainty in order pacing related to potential tariffs, which complicates quarter-to-quarter predictions.

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CFO Dom Blosil confirmed that Q4 grill growth is expected to moderate from Q3's strong performance but will remain positive, driven by strong sell-through and retail replenishment. CEO Jeremy Andrus added that the competitive landscape for pellets has not shifted meaningfully, and Traeger's vertical integration and brand loyalty provide a strong defense against private label and other brands.

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The company views the firearm trade-down as an opportunity to gain share by being in-stock on value-oriented items, which has led to outperformance vs. NICS data. The personal protection category is currently about 25% of sales (mostly handguns/ammo) and is seen as a major growth opportunity. The March slowdown was attributed specifically to the strategic shift of ad campaigns due to the later Easter, not to a change in consumer behavior from tariff news.

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Executives attributed softer Q3 gross margin to product mix shift towards firearms and freight costs from inventory build. They expressed high confidence in meeting Q4 guidance without intense discounting. They confirmed that direct tariff exposure is minimal (under 3%) but they are monitoring indirect impacts.

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CFO Jeff White attributed the softer-than-expected Q3 gross margin to a product mix shift toward lower-margin firearms and higher freight costs from a strategic inventory build. He expressed high confidence in achieving Q4 guidance without intense discounting. He also confirmed that direct tariff exposure via private brands is minimal, under 3% of sales, though they continue to monitor the impact on branded goods.

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CFO Jeffrey White stated the investment focuses on the core '20% of SKUs that drive 80% of the sales,' an area they were unable to invest in last year. CEO Paul Stone added that this open-to-buy allows them to purchase seasonal holiday goods and special buys that 'scream value,' a key differentiator from last year's liquidation focus. He expressed confidence that this targeted inventory will turn by year-end, enabling them to meet their inventory guidance.

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CEO Steve Lawrence confirmed that apparel performance improved significantly with colder weather around Black Friday, leading sales during that key period. On market share, he stated their goal is to gain share across categories, noting they have held onto significant gains made since 2019. CFO Carl Ford added that the largest share opportunity comes from geographic expansion into new markets where they have no presence.

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The executive detailed plans to accelerate retail growth, supported by an expanded team and a new 130-store test, while stabilizing DTC in the first half of 2025 and returning it to growth in the second half, driven by a new website and product innovation. Regarding promotions, the long-term goal is to be less promotional, but they will be very promotional in Q4 to drive sales, which is factored into guidance. The Chubbies brand is performing very well, growing, and is a key part of the company's dual-platform strategy.

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Retailer demand for Chubbies remains strong, with key partners like DICK's Sporting Goods expanding the brand's presence and product categories. For Solo Stove, average order value is holding up despite macro pressures due to a successful bundling strategy, which offers value to consumers without eroding margins like simple discounting would.

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Executives acknowledged headwinds in specialty outdoor retail but are offsetting them with strong D2C and mass channel performance. They see continued momentum for their brands in the mass channel. The impact from a weak snow season is expected to be minimal for Q4 as it's a small part of the business and the main sell-in period has passed.

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