Janine Stichter

Janine Stichter sought an update on the company's tariff mitigation strategy, specifically the target of offsetting 50% of the gross impact this year, the progress of initial pricing actions, and the timing for fully offsetting tariffs by fiscal 2027.

Answer

Paul Vogel, EVP and CFO, VF Corporation, stated that pricing actions to mitigate tariffs would primarily begin in Q4, with minimal impact in Q2 and Q3. He reiterated that Q3 would experience the most significant tariff impact without corresponding revenue offsets. He confirmed the expectation to fully offset tariffs within fiscal 2027, with more specific details to be provided at year-end 2026.

Janine Stichter of BTIG inquired about updated expectations for mitigating 50% of the gross tariff impact this fiscal year, given initial pricing actions, and sought clarification on the timing for fully offsetting tariffs by fiscal 2027.

Answer

Paul Vogel (EVP and CFO) clarified that tariff pricing actions are minimal in Q2/Q3, primarily commencing in Q4. He reiterated that Q3 will experience the most significant tariff impact without full revenue offset. He confirmed no change to previous guidance regarding full tariff mitigation within fiscal 2027, with more specifics expected at year-end after observing elasticity and pricing.

Ethan Sage, on behalf of Janine Stichter, asked about the promotional environment for Vans and The North Face, as well as the broader industry, heading into the holiday season.

Answer

CEO Bracken Darrell described the promotional environment as better than last year, attributing the improvement to healthier inventory levels for both VF and its wholesale partners. He also noted a positive trend of increased full-price selling, though promotions remain part of the strategy.

Janine Stichter asked about the company's pricing strategy in response to tariff headwinds, specifically how pricing plans have evolved and the initial reception of price increases. She also sought clarification on the improved gross margin from promotional activity at Tommy Bahama and its repeatability.

Answer

Chairman and CEO Tom Chubb explained that price increases have been selective and item-by-item, balancing margin protection with tariff uncertainty. The strategy aims to cover gross margin dollars for the balance of the year, with Spring 2026 focusing on recouping gross margin dollars, not necessarily percentage. He cited the new Boracay Island Chino as an example of a successful price increase on an improved product. Regarding Tommy Bahama's gross margin, Mr. Chubb noted selling more full-priced product during promotional periods, while CFO and COO Scott Grassmyer added that there was less inventory for end-of-season sales and less severe markdowns.

Janine Stichter inquired about the company's ability to reiterate gross margin guidance despite incremental tariff headwinds, focusing on the evolution of pricing strategy and the initial reception of price increases. She also asked for clarification on improved gross margins from Tommy Bahama's promotional activity and its repeatability.

Answer

Tom Chubb, Chairman and CEO, stated that price increases have been selective and item-by-item, aiming to cover gross margin dollars for the balance of the year, with spring 2026 focusing on recouping dollars, not necessarily percentage. He cited the new Boracay Island Chino as an example of a successful price increase on an improved product. Scott Grassmyer, CFO and COO, clarified that improved gross margins at Tommy Bahama during promotional periods were due to selling more full-priced product and having less inventory for end-of-season sales, resulting in less severe markdowns.

Janine Stichter asked how Oxford Industries was able to reiterate its gross margin guidance despite incremental tariff headwinds, specifically inquiring about the evolution of pricing strategies in response to tariffs and the reception of initial price increases. She also sought clarification on the improved gross margin from promotional activity at Tommy Bahama and its repeatability.

Answer

Tom Chubb, Chairman and CEO, explained that pricing adjustments have been selective and item-by-item, balancing margin protection with tariff uncertainty. He noted low to mid-single-digit price increases, with higher adjustments for Lilly Pulitzer's spring collection, and highlighted the successful launch of the higher-priced Boracay Island Chino as an example of consumer acceptance for improved products. Regarding Tommy Bahama's promotional gross margin, Mr. Chubb mentioned selling more full-priced products during promotional periods, and Scott Grassmyer, CFO and COO, added that less inventory and less severe markdowns contributed to the improvement.

Janine Stichter inquired about the impact of product department changes on the back half of the year, the proportion of casual wear in the assortment, and the confidence in the identified fixes. She also asked about the observed impact of recent price increases and whether the new tariff environment would alter pricing strategies for the next year.

Answer

CEO Calvin McDonald detailed the product pipeline's focus on performance, new lounge/social styles like LoungeFull and Big Cozy, and fresh perspectives on iconic items. He noted that new styles would increase from 23% to 35% by Spring 2026, with casual wear representing 40% of the mix. CFO Meghan Frank stated that modest price increases were rolling out as planned, with positive reception to date, and pricing would continue to be evaluated as a lever.

Inquired about the drivers of comparable sales, specifically trends in traffic, transaction size, and conversion, and asked about the business progression from April into May.

Answer

In Q1, U.S. store traffic decline moderated but was still lower, conversion was slightly down, and average dollars per transaction were up. No material changes in trends were noted progressing from April into May.

Janine Stichter inquired about lululemon's SG&A philosophy, asking how spending would adjust if sales came in either above or below guidance.

Answer

CFO Meghan Frank stated that about 20 basis points of the guided 40-50 basis point SG&A deleverage is from FX headwinds, with the remainder funding strategic investments in international growth, stores, marketing, and technology. She explained that future SG&A adjustments would depend on business momentum and the broader environment, noting the company has contingency plans for both upside and downside sales scenarios.

Janine Stichter asked for more detail on the women's business, which saw a nice pickup from Q2. She specifically highlighted the positive mention of leggings and inquired about what is driving this and what to expect going forward.

Answer

CEO Calvin McDonald explained that the women's business is performing well globally, and in the U.S., guests are responding strongly to newness in categories like leggings, particularly through new colors, prints, and patterns. He noted that Lululemon gained market share in women's activewear globally and in the U.S. The key opportunity remains increasing the level of newness in the assortment back to historical levels, which is the team's focus for Q4 and 2025.

Asked about the timeline for reintroducing the 'Breathe Through' fabric and for details on the potential impact of new product launches in the second half, particularly in the training category.

Answer

The 'Breathe Through' fabric was well-received and teams are working to reintroduce it in new styles, but it will not return in 2024. In the back half, newness is coming to the Wunder Under and Align franchises, along with a new performance train legging, to help address the newness gap.

Janine Stichter, using the name Janine Hoffman Stichter, asked for the timeline to reintroduce the 'Breathe Through' fabric in new styles and for details on the potential scale and impact of new product launches planned for the second half of the year.

Answer

CEO Calvin McDonald confirmed the 'Breathe Through' fabric was a success and the team is working to bring it back in a different style, though it will not return in 2024. For the back half, he highlighted upcoming innovation in the training category, including a new performance legging and new fabrics for the Wunder Under franchise. He emphasized that a key focus is adding more seasonal newness (color, print) to core lines like Align.

Janine Stichter asked Mary Ellen Coyne for insights into the current sentiment of J.Jill's consumer, particularly after a challenging start to Q2 and considering their sensitivity to economic headlines. She also sought clarification on expected promotional levels for the back half of the year, given clean inventory but a price-sensitive customer base.

Answer

Mary Ellen Coyne (CEO and President, J.Jill) noted a slow but steady return of the consumer, with sequential month-over-month improvement in Q2, expressing optimism for Q3 as tariff-related uncertainty settled. Regarding promotions, she reiterated that back-half levels would depend on customer acceptance of strategic price increases, forming part of the range of outcomes in their guidance.

Janine Stichter asked for an update on new store openings, including the performance of recent openings and the rationale for lowering the full-year target. She also asked CEO Mary Ellen Coyne for more details on potential 'white space' or new product categories.

Answer

EVP, CFO & COO Mark Webb clarified that the reduction in the 2025 new store forecast is due to deal timing and availability, not a change in the long-term strategy of opening 50 net new stores by 2029. He noted recent openings are performing in line with expectations. President & CEO Mary Ellen Coyne stated that plans for new categories are in development and will be shared on the September earnings call.

Janine Stichter from BTIG asked about the potential ceiling for growth within existing B2B doors, given that they account for 90% of growth, and inquired about performance in newer distribution channels like sporting goods and run specialty.

Answer

David Kahan, President of Americas, explained that growth in existing doors comes from deeper penetration with more styles and inventory. He emphasized that expansion into new points of distribution is very deliberate and that the brand's core strategy of maintaining relative scarcity continues to fuel demand and performance, preventing a ceiling.

Janine Stichter asked for elaboration on the company's e-commerce initiatives and investment plans for the online channel for the remainder of the year.

Answer

President of Americas David Kahan identified the membership program as the biggest growth driver for DTC. The member base has grown to over 10 million, up 25% year-over-year, with members spending 20% more on average. He explained that investments are focused on personalized, 'lasered' marketing to this fan base to achieve a higher return on investment.

Janine Stichter from BTIG inquired about performance in newer distribution channels, such as outdoor, professional, and run specialty stores, asking about market penetration and potential for shelf space gains.

Answer

President Americas David Kahan explained that there is immediate adoption of the brand in these new, adjacent channels. He emphasized that the core driver is the footbed, which translates across multiple use occasions (recovery, work, outdoor). As the brand expands into more use occasions, it increases its 'share of closet' with consumers, who on average already own multiple pairs. The strategy is to continue expanding the footbed's presence across these new environments.

Janine Stichter asked for details on FORWARD's strong performance in a tough luxury market and inquired about the current status and future opportunity for the beauty category.

Answer

Co-Founder & Co-CEO Michael Mente attributed FORWARD's success to strong merchandising, new brand additions as competitors weaken, and progress in high-touch sales. For beauty, he described it as being in the early stages, with growth driven by assortment, and noted that improving the site experience is the next key step before a larger marketing push.

Janine Stichter asked for an update on the performance of the core business, specifically dresses, and inquired about the company's plans for its significant cash balance, including potential acquisitions.

Answer

CFO Jesse Timmermans reported that the dresses category performed well, growing 10% in Q4, which was healthy although slightly below the company's overall growth rate. Regarding the cash balance, he stated that the company continues to be opportunistic, with a share buyback plan in place and an ongoing evaluation of strategic opportunities.

Janine Stichter inquired about the competitive landscape amid tariff volatility, specifically the potential for market share gains from independent retailers. She also asked for clarification on when the higher costs from tariff-impacted inventory will begin to affect the gross margin.

Answer

CEO John Hazen expressed confidence that Boot Barn is well-positioned to gain share due to its exclusive brands and strong inventory, expecting smaller competitors to become more risk-averse. CFO Jim Watkins explained that there will be a temporary gross margin benefit in Q2, as retail price increases are implemented before the higher-cost inventory fully flows through cost of goods sold.

Janine Stichter from BTIG asked about the relative performance of new versus legacy markets and requested more detail on the e-commerce 'halo effect' observed when new physical stores open in a market.

Answer

CEO John Hazen confirmed that new store openings for the year will be split across both legacy and new markets. He elaborated on the e-commerce halo effect, citing New York as a prime example where online sales have steadily climbed the state rankings as the store count grew to 12. While not providing specific universal metrics, he noted that in smaller new markets like Vermont, the online business can increase fivefold almost immediately after a store opens.

Janine Stichter asked about the company's inventory position, which she initially thought was lean, and inquired about its sourcing exposure to China and potential tariff risks.

Answer

CFO Jim Watkins clarified that same-store inventory was intentionally up 10.5% and the company feels well-positioned for the holidays. Former CEO Jim Conroy stated that sourcing from China for exclusive brands has been reduced from over 50% to a planned 30%, significantly de-risking tariff exposure.

Janine Stichter of BTIG asked for an assessment of the current consumer environment compared to previous quarters and sought more detail on the growing lifestyle opportunity for the ExtraTough brand.

Answer

President, CEO & Chairman Jason Brooks described the consumer as 'a little confusing' but noted that sell-through data from retail partners in the work, farm, and outdoor categories remains positive, leading to cautious optimism. CFO & COO Thomas Robertson added that e-commerce data showed no dramatic negative shift following recent price increases. Regarding ExtraTough, Brooks highlighted its expansion into women's and kids' footwear and its growing popularity inland, while Robertson emphasized the growth of the ADB Sport line and its entry into new retail channels.

The analyst inquired about the company's strategy for building brand awareness, future marketing spend, and the consumer response to reduced promotions and potential price increases.

Answer

The company is re-evaluating its marketing funnel to focus more on upper-funnel brand awareness, with plans to reinvest cost savings into marketing as returns improve. The reduction in promotional depth and frequency has led to sequential gross margin improvement in March and April. The company is seeing positive trends in conversion and full-price sales, especially in the retail channel. Price increases are being implemented selectively on unique products to mitigate tariff impacts while being mindful of the overall value equation for the consumer.

Janine Stichter of BTIG asked about Duluth's strategy for building brand awareness, the outlook for marketing spend, and the consumer's response to reduced promotions and potential price increases.

Answer

President & CEO Stephanie Pugliese stated the company is focusing on upper-funnel marketing to drive brand awareness and will reinvest cost savings into marketing as ROI improves. She explained that promotional pullbacks are being carefully balanced with customer retention and that targeted price increases on unique products are mitigating tariff impacts. SVP & CFO Heena Agrawal added that shallower promotions are already yielding positive trends in conversion, full-price sales, and store performance, with sequential improvements seen from March through May.

Janine Stichter asked for more detail on the observation that e-commerce growth is stronger in markets with higher store density. She sought to understand the halo effect and the interplay between store growth and e-commerce performance.

Answer

Co-CEO Neil Blumenthal explained that as store density in a market reaches a critical mass, the channels become synergistic rather than cannibalistic. The physical stores act as powerful billboards, increasing overall brand awareness that benefits both channels. Co-CEO David Gilboa added that once a market is dense, its e-commerce growth often outpaces e-commerce-only markets. He noted that while new customers may start in-store, the e-commerce channel is highly effective for repeat purchases, contributing to strong revenue retention.

Janine Stichter from BTIG asked about the medium-term growth outlook for the e-commerce channel and whether new store customers tend to convert to the online channel for subsequent purchases. She also requested more detail on the expected timeline and benefits of the Versant Health partnership.

Answer

Co-Founder and Co-CEO David Gilboa affirmed the goal of returning e-commerce to growth, noting underlying momentum is stronger than the 1% reported revenue figure suggests. He confirmed that while customers tend to repeat in their initial channel, some cross-channel purchasing occurs. Regarding the Versant Health partnership, he explained it will be a multiyear tailwind as it takes time for members to become aware and use their benefits, with revenue per member expected to increase steadily over time.

Janine Stichter asked for more details on the improving performance at the Champs Sports and WSS banners, questioning what specific strategies are working. She also inquired about demographic trends, particularly regarding the lower-income consumer at WSS.

Answer

EVP and CCO Frank Bracken credited the Champs turnaround to its repositioning toward the 'active athlete' with focused assortments under the 'Sport For Life' platform. For WSS, he noted a strong August drove positive comps but acknowledged continued pressure on its lower-income consumer base (nearly 60% sub-$50k income), which has led to a slowdown in new store investments for that banner.

On behalf of Janine Stichter, an analyst asked how learnings from the new 'Reinvented Retail' concept store in Wayne, NJ, will be applied to future stores and what the expansion plans are. A second question concerned the current macro environment and any observed differences in behavior between lower- and upper-income consumers.

Answer

CEO Mary Dillon acknowledged that consumers face economic pressures but emphasized that sneakers remain a prioritized discretionary purchase, and the Lace Up plan is designed to capture that spend. CCO Frank Bracken explained that the new store concept and the broader Store Refresh program share the same goals: improving the customer journey, enhancing brand storytelling, and elevating employee service. Learnings from the new concept, which is showing strong results, are directly informing the refresh program that will scale through 2024 and 2025.

Asked about the increased use of markdowns and promotions, questioning whether it was driven by the need to clear underperforming inventory or by liquidity needs, and if this trend would continue into Q4. Also requested an update on physical retail performance.

Answer

The increased markdowns in Q3 were driven by a combination of needing to reset the separates and shoe business and generating liquidity. This promotional activity is expected to continue through Q4 and into early 2025. Regarding retail, the wholesale business is performing well with double-digit comps, and the Melrose store is a successful brand activation center, but there are no near-term plans for additional stores.

Janine Stichter from BTIG inquired about the medium-term gross margin outlook, asking about potential offsets to tailwinds like D2C mix, lower airfreight, and price increases.

Answer

An executive, likely CFO Martin Hoffmann, affirmed the 60%+ gross margin outlook remains valid, noting that while the current environment is stable, they always account for potential supply chain disruptions. He identified several sustainable drivers for high margins: strategic price increases like the upcoming Cloud 6, ongoing economies of scale in manufacturing, and the continued over-proportional growth of the high-margin D2C channel.