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Chief Operating & Financial Officer Joan Hilson noted that bridal performance is strong in the three largest brands (Kay, Zales, Jared), with AUR as a key strength. She mentioned fortifying lower price points to drive units. Hilson also detailed the success of pricing tests, which involved reduced discounting and fewer promotion days, particularly at Jared, with good customer response. CEO & Director J.K. Symancyk added that significant assortment newness has allowed them to maintain key price points despite commodity cost pressures.

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CEO Virginia Drosos explained that declining lab-diamond prices have been a consistent story since 2019, leading to a more educated consumer. She stated that customers understand lab-created diamonds offer an opportunity to get a larger stone for the price but may not hold value like natural diamonds. Drosos confirmed the perception differs, with fashion customers using lab diamonds to add 'bling' affordably, which helps drive up average transaction values.

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CEO Daniel Heaf described practical marketing elevations, such as improved digital photography and using store windows for storytelling, which have been well-received by consumers. CFO Eva Boratto detailed that tariffs will have a disproportionate impact on Q3, representing a 240 basis point headwind ($40 million), compared to a 100 basis point impact in Q4, primarily due to the temporary 145% China tariff.

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CEO Daniel Heaf explained his vision for marketing to be more emotionally resonant and less reliant on promotions, with a focus on product innovation and ingredient stories. Regarding international expansion, he sees a significant opportunity and plans to assess priority markets and business models. For distribution, he emphasized a strategic approach to reaching new consumers on new platforms where they already are, moving beyond the company's existing channels.

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CEO Michael O'Sullivan described Q2 performance as broad-based, noting that stores in lower-income trade areas and high-Hispanic trade areas (excluding Puerto Rico and border stores) both performed slightly above the chain average. He confirmed that merchandise availability is currently 'very strong,' which enabled the company to chase the 5% comp. He reiterated that tariff cost pressure is real but was successfully offset in Q2 through aggressive actions, a strategy they will continue.

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CEO Michael O'Sullivan stated that while the Q1 sales slowdown was broad, stores in lower-income and high-Hispanic trade areas continued to show relative outperformance. EVP & CFO Kristin Wolfe explained that the 31% year-over-year increase in reserve inventory was a strategic decision to purchase tariff-free, branded merchandise already in the U.S., providing flexibility and value for later in the year.

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CEO Michael O'Sullivan explained that the company made faster-than-expected progress on margin improvement in 2024, achieving 100 bps of expansion versus the 10-50 bps guide. This was driven by exceeding sales plans and accelerating merchandise margin and supply chain savings. For 2025, the guidance reflects a more measured pace of progress. Executive David Glick addressed the CapEx question, stating that the increase is driven by the opportunistic purchase of the California DC. He noted that while they may evaluate raising debt, the impact on leverage ratios would be modest, and the company expects to continue its share repurchase program at levels similar to fiscal 2023 and 2024.

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CEO Michael O'Sullivan explained that a greater focus on value has spread across demographic groups, driving trade-down traffic. He also noted that pressure on the core low-income shopper has moderated, with their store performance now aligning with the chain average. He identified favorable weather as a significant tailwind, estimating it contributed 1-2 percentage points to the quarterly comp.

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CEO Michael O'Sullivan confirmed that while the Q1 slowdown was broad-based, stores in lower-income and high-Hispanic trade areas continued to outperform the chain average, continuing a trend from 2024. He noted the one exception was a significant fall-off in performance at southern border stores. EVP & CFO Kristin Wolfe explained that the large increase in reserve inventory was a strategic move to acquire great deals on branded merchandise already in the U.S. to get ahead of tariffs, making it a key lever of flexibility.

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Tricia Smith, Global CEO of Anthropologie Group, explained that Anthropologie will use gentle price increases where value permits, while protecting opening price points. Sheila Harrington, Global CEO of Urban Outfitters & Free People Groups, confirmed a similar strategy for Free People and Urban Outfitters, emphasizing the importance of the value equation and maintaining welcoming price points for consumers.

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CFO Jill Timm explained that the 'Other Revenue' guidance was lowered because the company will begin lapping the launch of its co-brand card in the second half of the year, diminishing that revenue benefit. She also noted that sales from the core credit customer are down in the low teens, which negatively impacts accounts receivable balances and associated revenue, contributing to the lowered outlook for the credit business.

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CEO James Conroy clarified that any price changes have been very modest, with a low single-digit change in AUR. He emphasized a cautious approach, stating Ross will monitor the broader retail landscape before making significant changes to maintain its value proposition. He anticipates that by next year, the market will reach a new price equilibrium, and the company will not need to call out tariff impacts separately.

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CEO James Conroy responded that any investments would need to be prudent, either cost-neutral or justified by a proven ROI. He mentioned that the company has already been investing in upgrading the store fleet and will look to find funds to enhance marketing over time.

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CFO Adam Orvos declined to quantify the second-half merchandise margin impact but stated it is expected to be greater than the 80 basis point decline in Q2. He identified domestic freight, distribution costs, and incentive costs as the primary offsets. Group President and COO Michael Hartshorn noted it was too early to discuss specific plans for 2025.

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CFO John Klinger stated that customer transactions continued to drive overall comps. CEO Ernie Herrman clarified that the primary driver of tariff mitigation was not raising prices but rather merchants capitalizing on excellent market opportunities to buy better. He also credited the planning and allocation teams for efficiently managing markdowns, which supported merchandise margin.

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CEO Ernie Herrman acknowledged a growing skew towards younger customers (18-34) but stressed the company's core competitive advantage is trading broadly across all age and income demographics. CFO John Klinger added that TJX saw positive performance across all income categories it tracks during the quarter.

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CFO Andrew Page stated that the company has implemented some price increases for the Wilson brand, approximately 10% on certain products, to mitigate tariff impacts. However, for the Arc'teryx and Solomon brands, he noted that while they possess 'untapped pricing flexibility,' they have successfully managed tariff pressures so far without needing to raise prices.

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CFO & COO Scott Roe attributed the leverage to a 20 basis point benefit from the Stuart Weitzman divestiture, increased productivity and profitability of the existing store fleet, and disciplined corporate expense management. He noted the company continues to invest in strategic priorities like data and analytics while finding efficiencies elsewhere, creating a positive 'flywheel' effect.

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CFO and COO Scott Roe explained that while specific 2026 guidance is premature, Tapestry is actively mitigating tariff impacts by pulling inventory forward, optimizing its diverse supply chain, and collaborating with suppliers. He quantified the potential exposure, noting that a 10% tariff on the roughly $900 million of U.S. imports would be a $90 million unmitigated impact. Coach CEO Todd Kahn added that AUR growth is driven by compelling innovation and brand desirability, not just cost pass-through, providing another powerful mitigation lever.

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Todd Kahn, CEO and Brand President of Coach, explained that the strategy is not to replace successful platforms but to innovate within them. He cited the Pillow Tabby as an example that created a new opportunity while enhancing the original Tabby franchise. This approach of building on cohesive platforms, like the new New York family, creates a compelling and focused story for the consumer and ensures longevity.

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CEO Joanne Crevoiserat stated that while the brand's foundation is healthy with expanding margins, the key opportunity is in amplifying product innovation with more effective brand building and storytelling. She highlighted the hiring of new CEO Eva Erdmann to sharpen strategy and execution. CFO & COO Scott Roe clarified that they do not expect revenue growth for Kate Spade in fiscal 2025 and that the current trend is expected to continue for the balance of the year.

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President & CEO Bracken Darrell reaffirmed the company's target of achieving a 55% gross margin, emphasizing that opportunities exist across all brands, especially through premiumization at The North Face and Vans. EVP & CFO Paul Vogel added that key initiatives in product creation, business planning, and markdown management are driving this, with markdown improvements already delivering results.

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President and CEO Bracken Darrell clarified that the value channel constitutes about one-third of the Vans business and will remain an important component to serve a broad consumer base. He noted inventory health is good and that the non-value channel is expected to grow faster over time as the company actively shifts its store mix.

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CEO Bracken Darrell stated it was too early to comment on the winter season's progress but expressed confidence in delivering on guidance regardless of weather, citing the significant internal improvements in go-to-market structure that are within the company's control.

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CFO Matt Friend stated that margins will remain under pressure in the first half of fiscal 2026 due to 'WinNow' actions and tariff timing, but he expects the pressure to moderate in the second half. He noted the full-year gross margin will be impacted by about 75 basis points from tariffs, with a 100 basis point impact in Q1.

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President and CEO Elliott Hill clarified the strategy is to "rightsize, not sunset" key franchises like the Air Force 1, Dunk, and Air Jordan 1, accelerating inventory cleanup to create space for a more balanced product portfolio. CFO Matt Friend added that by the end of Q4, these franchises' mix contribution will be down 10 percentage points, with further reductions planned for fiscal 2026. He specified that the wholesale channel cleanup will likely extend through the first half of fiscal 2026, though Air Force 1 inventory is already beginning to stabilize.

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EVP & CFO Matthew Friend described partner engagement as 'very encouraging,' citing positive meetings in Paris and new collaborations like the women's fitness concept with DICK'S Sporting Goods and the HomeCourt concept with Foot Locker. He framed this as a return to a proven playbook of using sport to ignite growth across the marketplace, a strategy previously championed by incoming CEO Elliott Hill.

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CEO Hillary Super explained that younger consumers prioritize comfort and versatility, leading to a shift from traditional bras to sports bras, wireless styles, and bra tops. CFO Scott Sekella added that while sports bras carry a lower margin than traditional bras, the overall impact on the total business margin is minimal given the relative size of the categories.

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CEO Lisa Harper outlined the upcoming sub-brand launches, with 'Lovesick' targeting a younger demographic debuting in August and 'Studio Luxe,' a higher-end concept, launching in September. She also noted that the delivery frequency for existing sub-brands like Festi and Belle Isle will increase to a monthly basis by the fourth quarter.

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The high Q2 SG&A is due to a combination of factors including a tough comparison to last year, increased foundational and strategic investments, and the timing of adding back expenses like store labor. The full-year guidance shows a much smaller deleverage, indicating the Q2 impact is outsized and related to timing.

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CFO Meghan Frank stated that the outlook for the rest of the year reflects trends similar to those seen in Q1. CEO Calvin McDonald added that while they are always testing marketing effectiveness, they are pleased with the current guest response and have major campaigns planned, such as the Align franchise's 10th-anniversary celebration, within the existing guidance parameters.

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CFO Meghan Frank explained that while Q3 inventory growth was lower than guided at 8%, the forecast for Q4 remains in the mid-teens. She noted this is intentionally driven by chasing seasonal newness to position the business, particularly in the U.S., for the first half of 2025. Frank added that while the long-term goal is to align inventory with sales growth, current inventory turns are only slightly slower than historical levels, and the company feels well-positioned.

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CEO Calvin McDonald confirmed that the action plan includes chasing strong performers and fast-tracking designs, which will lead to a sequential improvement in newness through Q3 and Q4. However, CFO Meghan Frank specified that the second-half guidance is based on Q2 trends and does not factor in any meaningful positive impact from this accelerated newness, positioning it as a potential upside.

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CFO Katrina O'Connell clarified that while underlying merchandise margin was flat, total gross margin expanded 60 basis points due to ROD leverage. For Q2, she noted a year-over-year decline is expected due to lapping a prior-year credit card benefit. For the full year, she reiterated guidance for slight gross margin expansion, driven by both ROD leverage and merchandise margin improvement.

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CFO Katrina O'Connell clarified that the Q1 gross margin expansion of 60 basis points was driven entirely by ROD leverage, with underlying merchandise margin remaining flat. For Q2, she noted the year-over-year decline is due to lapping a significant credit card benefit from the prior year. For the full year, she reiterated guidance for slight gross margin expansion, driven by both merchandise margin and continued ROD leverage.

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President of Americas David Kahan confirmed that the trend appears to be global. He attributed this to younger consumers' tendency to shop 'live' and the importance of the tactile, in-person experience with the Birkenstock brand, especially for first-time buyers.

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President, EMEA Nico Bouyakhf explained that since final assembly is in Germany, the company would only be impacted by tariffs on German imports. He noted that Birkenstock has historically been able to take pricing to offset such pressures without impacting the business. The company will monitor the situation and use a combination of cost initiatives and pricing adjustments to mitigate any impact, while also acknowledging the potential indirect effects on consumer sentiment.

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CSO Klaus Baumann stated the long-term plan is for the APMA region to represent about 30% of total sales, growing at double the speed of mature markets. He highlighted progress with partners in China and a focus on B2C development, with 25 owned and 256 partner stores now in the region. CEO Oliver Reichert added that the growth strategy is balanced across all of APMA, not just China, to ensure mindful expansion.

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CEO Trina Spear stated that FIGS is actively using the current situation to take share and widen its competitive moat, leveraging its scale, brand, and supply chain advantages. She noted that while a few very small competitors have raised prices, it is not a widespread trend. Spear emphasized that the tariff environment will be a challenge for other companies, creating an opportunity for FIGS to solidify its leadership position.

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CFO Sarah Oughtred confirmed there would be some rate leverage, but not to historical levels, as a portion will be reinvested. She specified investments would target top-of-funnel brand building, digital personalization, international localization, and building teams for growth channels.

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Global CFO Lindsay Drucker Mann highlighted the importance of product innovation for driving conversion and repeat sales. She noted a new neck cream for IL MAKIAGE launching in Q1 2025, along with other items like liquid magnesium and eye creams in the pipeline. CEO Oran Holtzman added that the company's typical cadence is to launch around five new products per brand each year.

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CFO Jesse Timmermans explained that the updated, more favorable guidance was a direct result of the 'continued efficiencies' the company is observing in both its brand and performance marketing channels, which increased their confidence in maintaining a lower spend ratio.

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CFO Jesse Timmermans clarified the issue was not widespread but was caused by deeper markdowns on existing markdown inventory, stemming from heavy inventory at REVOLVE and clearing older stock at FWRD. He expressed confidence for 2025 due to continued full-price strength, significant margin recovery potential at FWRD, and the expansion of higher-margin owned brands starting mid-year.

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CFO Robert Helm confirmed the 40% gross margin guidance for the year assumes current tariffs remain in place. He noted that Ollie's has already taken steps to mitigate the impact, including reducing its exposure to China from approximately 15% of imports in the past to an expected 10% this year, leveraging its flexible buying model.

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