Dylan Carden • William Blair & Company

Answer

CFO Jesse Timmermans credited the strong inventory performance to long-term initiatives and noted the benefit was seen across both Revolve and FORWARD segments. He attributed the gross margin beat to a combination of tariff mitigation, markdown algorithm improvements, healthy inventory turns, and owned brand expansion.

Ask Fintool Equity Research AI

Answer

Co-CEO Michael Karanikolas explained that the 15% level is based on current trends and their assessment of the optimal spending zone. He stated that while they haven't yet seen a major environmental shift from competitors pulling back, Revolve's own marketing efficiency has been driven by strong internal execution and tactics, such as the successful REVOLVE Festival.

Ask Fintool Equity Research AI

Answer

Co-CEO Michael Karanikolas confirmed that the AI used to expand reach in performance marketing was their 'own proprietary technology.' Regarding the return rate, he stated that while category mix shift had a 'meaningful impact,' the geographic mix shift between domestic and international was a larger contributing factor to the reduction.

Ask Fintool Equity Research AI

Answer

Co-CEO Michael Karanikolas reported growth across all international regions, driven by market rebounds, improved service levels, and targeted marketing, with a specific highlight on China. He explained that while some regions have different margin profiles, they are still positive opportunities, and the international business is net-net similar in profitability to domestic. He also noted that scaling up offers long-term efficiency gains.

Ask Fintool Equity Research AI

Answer

CEO Lisa Harper explained that the accelerated store closures are a direct response to customers increasingly preferring the online channel, which is a more effective platform for the brand's expanding sub-brand strategy. She clarified the negligible sales impact for the year is because most closures are slated for late Q4, these stores have very low sales volumes, and the company will ramp up digital marketing to offset the un-retained portion of sales.

Ask Fintool Equity Research AI

Answer

CFO Paula Dempsey stated that the primary store closure opportunity is concentrated in the current and next fiscal year, not a prolonged campaign. CEO Lisa Harper added they are testing larger store formats for the future. Chief Strategy and Planning Officer Ashlee Wheeler clarified that the 70% customer retention rate is a multi-year figure, not just for year one, and noted that new sub-brands sold through very well at full price despite the macro uncertainty.

Ask Fintool Equity Research AI

Answer

CEO Lisa Harper expressed confidence in a path back to low-to-mid-teens adjusted EBITDA margins in the next several years, citing the ability to leverage the newly built operational platform. CFO Paula Dempsey reiterated that the 50/50 store mix is the target for the next 3-5 years and will be achieved through a balanced approach of both closures and new openings. Both executives affirmed that, based on current data, the 50/50 mix is considered optimal.

Ask Fintool Equity Research AI

Answer

Co-CEO Neil Blumenthal responded that by focusing on delivering superior value and service, the company can drive strong repurchase cycles relative to the category. On pricing, Co-CEO David Gilboa acknowledged a significant 'price umbrella' in the industry but stressed the importance of maintaining consumer trust through value. He noted customers have responded well to higher-priced product introductions. CFO Steve Miller added that like-for-like price increases are rare and strategic, informed by past successes.

Ask Fintool Equity Research AI

Answer

CEO Sumit Singh confirmed that the migration to online has normalized, with e-commerce having captured a larger share of the market. He affirmed that Chewy expects to continue gaining share, noting that the company's 2025 growth guidance of 6-7% is roughly double the expected overall market growth rate. He added that Chewy continues to capture a significant portion of every dollar that moves online in the pet category.

Ask Fintool Equity Research AI

Answer

CEO Sumit Singh responded that newly acquired customers are considered higher quality, with strong adoption of repeatable categories and healthy NSPAC curves. He also highlighted the efficiency of converting existing site traffic at a lower customer acquisition cost. CFO David Reeder added that the expanding portfolio of high-margin offerings like health services and sponsored ads enhances the value proposition and profit flow-through for all customers.

Ask Fintool Equity Research AI

Answer

Executive Claire Spofford acknowledged a weather headwind early in the fall for seasonal categories, which later improved. Executive Mark Webb clarified the Q4 guidance is based on current business trends. Spofford explained the full-price customer situation is a mix shift, not a binary loss, with the direct channel showing more price sensitivity, noting that the May-June period had been unusually strong.

Ask Fintool Equity Research AI

Answer

Executive Mark Webb explained the guidance range: the high end assumes a return to pre-July full-price demand, while the mid-range assumes the current challenging trend persists. Executive Claire Spofford added that a recent customer survey indicated distraction from the election but also strong purchase intent for fall. Regarding capital allocation, Mark Webb reiterated the established priorities: first, investing in the business (OMS project, new stores), followed by debt reduction and the new dividend program, with no change to this hierarchy.

Ask Fintool Equity Research AI

Answer

CEO Fran Horowitz-Bonadies stated that the company does not blame weather for performance, relying on its global diversification and balanced assortments. COO Scott Lipesky defended the structural margin, citing a transformed and more productive store base, global growth opportunities, and a strong balance sheet to fund investments. Regarding tariffs, he confirmed that only 5-6% of U.S. receipts come from China and that the company's diversified sourcing from 17 countries provides flexibility to adapt if new tariffs are implemented.

Ask Fintool Equity Research AI

Answer

CEO Fran Horowitz-Bonadies stated that the business is diversified and not reliant on weather. COO Scott Lipesky explained the margin structure is supported by a more productive store fleet, strong new store economics, and global growth, not just top-line rates. He clarified that U.S. imports from China are low at 5-6% and the company has an agile, diversified supply chain to mitigate potential tariff impacts.

Ask Fintool Equity Research AI

Answer

CFO & COO Scott Lipesky confirmed that data shows the Abercrombie customer has successfully aged up into the target mid-20s demographic, filling a white space that was intentionally created. He stated that marketing efforts are effectively driving both new customer acquisition and retention, with new product categories like Best Dressed Guest and YPB serving as key tools to keep existing customers engaged.

Ask Fintool Equity Research AI

Answer

Co-CEO Marc Maurer responded that the running category is growing very strongly, second only to the much smaller tennis category. He noted that the product portfolio is now more effectively distributed across different running styles, citing the success of key franchises like the Cloudmonster for elevated cushioning, the Cloudsurfer Next for engaging younger runners, and the Cloudrunner for its strength in the run specialty channel. This confirms On's successful perception as a core running brand.

Ask Fintool Equity Research AI

Answer

CEO Reade Fahs acknowledged that demand from the cash-pay customer has not rebounded but stated the company is focused on controllable initiatives rather than waiting for a cycle. On pricing, he clarified that they are looking at price and promotion together. Promotions are specifically targeted at cash-pay customers, while the overall pricing architecture is being re-evaluated to better serve the growing managed care segment, ultimately believing they can use price as a lever more effectively.

Ask Fintool Equity Research AI

Answer

Former CEO Jim Conroy stated the promotional environment is stable and Boot Barn will not increase its promotional cadence, sticking to its everyday low price model. For long-term margin, he highlighted supplier contract renegotiations, distribution center efficiencies, and scaling a program to take direct possession of third-party vendor containers.

Ask Fintool Equity Research AI

Answer

Chief Financial Officer Christopher Work explained that the difference in margin flow-through between Q2 and Q3 is primarily due to a retail calendar shift, which moved approximately $10 million in sales and a corresponding $0.09 to $0.10 in EPS from Q3 into Q2. He also noted that reinstated incentive compensation costs are a partial offset to SG&A leverage. Regarding store closures, Work stated that the roughly 20-25 underperforming stores closed annually have a minimal impact on the bottom line. The go-forward strategy involves a multi-factor evaluation of each location, including profitability, its role in the local trade area, and the health of the shopping center.

Ask Fintool Equity Research AI