Ethan Saghi

Ethan Saghi asked about the year-to-date business trends across Rocky Brands' portfolio and any observed changes in consumer health or the broader macro environment during the initial months of 2026 compared to the last reporting period.

Answer

COO and CFO Tom Robertson stated that the momentum from 2025 has carried into 2026, benefiting from favorable early-year weather, with anticipated normalization. He noted strong order books for Spring 2026 across all brands and positive feedback on new products. He indicated no significant change in consumer behavior but acknowledged potential benefits from increased tax refunds.

Ethan Saghi asked for an update on the business's year-to-date trending across brands and any observed changes in consumer health or the broader macro environment since the last earnings report.

Answer

COO and CFO Tom Robertson indicated that the momentum from 2025 has continued into 2026, benefiting from favorable weather conditions early in the year, with similar successes seen across wholesale and e-commerce. He noted that the Spring 2026 order book is up across all brands with positive product feedback. From a macro perspective, Robertson stated no significant change in consumer behavior, acknowledging the potential benefit from increased tax refunds.

Ethan Saghi of BTIG asked for an update on the company's sourcing exposure to Mexico given potential tariffs and requested more detail on the business momentum observed quarter-to-date across brands and categories.

Answer

CFO Thomas Robertson stated that sourcing from Mexico is minimal, representing less than a few percent of inventory, and would not have a meaningful impact on the business. Both Robertson and executive Jason Brooks confirmed that Q4's positive momentum has continued into the new year, with the MUK and XTRATUF brands and the e-commerce channel remaining strong. They reiterated caution for Q1 guidance, however, due to the anniversary of a nonrecurring contract and a timing shift of some spring product shipments into Q2.

Ethan Saghi from BTIG asked for an update on Torrid's business performance specifically for the period exiting Q2 and through August. He also inquired about any customer pushback experienced following recent price increases and how Torrid is approaching additional price adjustments for the latter half of the year.

Answer

Chief Strategy & Planning Officer Ashlee Wheeler noted softer performance during peak holiday periods like Memorial Day and 4th of July, but a strong June semi-annual sale. She indicated that the consumer remains value-oriented, leading to continued promotional activity through August to drive conversion. CEO Lisa Harper clarified that price increases related to tariffs were minimal and product-specific, not leading to direct pushback. She acknowledged that pricing is a consistent customer complaint and outlined plans to introduce opening price point (OPP) products, aiming for 25% of apparel sales to be OPP next year, to offer better value while maintaining quality.

Ethan Saghi requested an update on Torrid's business performance from the end of Q2 through August. He also inquired about any customer resistance to recent price increases and the company's strategy for additional price adjustments in the latter half of the year.

Answer

Chief Strategy and Planning Officer Ashlee Wheeler reported softer performance during peak holiday periods but a strong June semi-annual sale, noting continued consumer value-orientation and responsive promotional activity through August. CEO Lisa Harper clarified that tariff-related price increases were minimal and product-specific, without significant customer pushback. She acknowledged consistent customer complaints about pricing and highlighted a strategic initiative to introduce opening price point products, targeting 25% of apparel sales next year, to offer better value.

Ethan Saghi of BTIG, on for Janine Stichter, asked for an update on Kurt Geiger's performance since the acquisition, its current margin profile, and its present level of sourcing from China compared to the 80% figure mentioned previously.

Answer

Chairman and CEO Edward Rosenfeld reported that Kurt Geiger continues to perform well, with strong double-digit digital growth in the U.S. and new stores exceeding expectations. He noted the brand's EBIT margin was 9.3% last year and is expected to decline slightly this year due to tariffs but has long-term double-digit potential. He also updated that Kurt Geiger's sourcing from China is now in the 'low 60s' percent, down from 80%.

Ethan Saghi, on behalf of Janine Stichter at BTIG, asked for color on how newness in the Tommy Bahama assortment is resonating with customers. He also inquired about the drivers behind the mid-teens sales decline at Johnny Was and the basis for confidence in the brand's full-year guidance.

Answer

Chairman, CEO & President Tom Chubb explained that new and differentiated products are performing well across all brands, including Tommy Bahama. Regarding Johnny Was, he clarified that the current guidance does not assume a significant rebound in fiscal 2025, as the ongoing initiatives to improve profitability are expected to yield results primarily in fiscal 2026 and beyond. EVP, CFO & COO Scott Grassmyer concurred with this assessment.

Ethan Saghi of BTIG, on behalf of Janine Stichter, asked for color on how new products are resonating at Tommy Bahama and questioned the reasons for the mid-teens sales decline at Johnny Was, as well as the confidence in that brand's full-year guidance.

Answer

Chairman and CEO Tom Chubb confirmed that newness is a key driver across all brands, not just Lilly Pulitzer. Regarding Johnny Was, he explained that the current guidance does not assume a significant rebound in fiscal 2025, as the comprehensive improvement plan is expected to yield results primarily in 2026 and beyond. CFO and COO Scott Grassmyer concurred with this outlook.

Ethan Saghi of BTIG, on for Janine Stichter, asked whether customers are still responding positively to new products amidst macro uncertainty. He also questioned what specific internal initiatives the company is undertaking to improve conversion rates across its channels.

Answer

Chairman and CEO Thomas Chubb confirmed that newness is driving the business and that customers are responding well. He provided examples such as the Tommy Bahama Barbados Pro short, the Lilly Pulitzer Tazie dress, and the new Lilly Pulitzer menswear line. Regarding conversion, he described efforts as "blocking and tackling," including better product knowledge in stores and significant upgrades to the e-commerce websites for Tommy Bahama, Lilly Pulitzer, Southern Tide, and Beaufort Bonnet to streamline the checkout process.

Ethan Saghi of BTIG asked about Oxford's sourcing strategy to mitigate potential tariff impacts and questioned how the holiday promotional environment has compared to the company's initial expectations.

Answer

Chairman & CEO Thomas Chubb explained that the company has exposure to China and would mitigate tariffs by shifting some production, negotiating cost-sharing with vendors, and implementing minor price increases, a strategy that worked previously. He also confirmed that promotional activity was higher and started earlier in the season, which was factored into the company's guidance.

Ethan Sage, on for Janine Stichter, asked for more detail on future opportunities in private label brands, particularly in Men's and Work. He also inquired about other potential margin drivers and SG&A leverage points for the next fiscal year.

Answer

CFO Jim Watkins highlighted the Hawx exclusive brand as having significant upside in the work boot category. Interim CEO John Hazen discussed SG&A, noting that headwinds from increased lease expense and incentive-based compensation in the current year should not repeat, suggesting potential for leverage next year.