Lucas Hudson

Lucas Hudson, on for Alex Perry, asked about the expected drivers of sequential improvement throughout the year and how much of that improvement is based on better macro conditions versus the company's own initiatives. He also inquired whether the APAC region outside of Mainland China is expected to outperform Mainland China for the remainder of the year.

Answer

Neil Bowden, CFO, clarified they could not comment on sequential improvement without guidance but reiterated that their plan is to drive performance through internal initiatives in a tough macro environment. Beth Clymer, President & COO, added that as a small brand with significant runway, they can succeed even in volatile environments. Regarding APAC, Neil Bowden stated that the business outside Mainland China is relatively small and that given some softness in Japan and traffic pressure in Hong Kong, he suspects Mainland China has more upside for the rest of the fiscal year.

Lucas Hudson, on for Alex Perry of Bank of America, asked about the expected drivers of improvement for the rest of the year, specifically the balance between macro recovery and internal initiatives, and whether APAC outside of Mainland China could outperform the mainland.

Answer

President & COO Beth Clymer emphasized that as a relatively small brand with significant runway, the company can succeed even in challenging macro environments by focusing on controllable initiatives. CFO Neil Bowden added that their plans do not assume a major macro improvement. He suggested that Mainland China likely has more upside for the fiscal year than the rest of the APAC region, which is smaller and faces some traffic pressures in markets like Hong Kong.