Mauricio Serna

Mauricio Serna inquired about the long-term opportunities and potential for increased distribution for Saucony's Endorphin Azura franchise. He also asked CFO Taryn Miller to elaborate on the cadence of the tariff impact on gross margin, specifically which quarters are expected to be most affected.

Answer

President and CEO Chris Hufnagel expressed bullishness on the Endorphin Azura, citing strong initial market response domestically and globally, and its potential to open additional distribution. He highlighted the product's innovation and $150 price point as a testament to the product team. CFO Taryn Miller explained that while Q1's unmitigated tariff impact on gross margin is lower due to inventory composition, the impact is expected to become more pronounced in Q2 and the back half of the year, with the full $60 million unmitigated impact assumed through year-end.

Mauricio Serna from UBS asked for observations on consumer reactions to recent price increases and the progress of the turnaround at brands like Merrell and Sweaty Betty. He also sought clarity on the quarterly timing of the estimated $20 million tariff impact.

Answer

CEO Christopher Hufnagel stated it was too early to judge consumer reaction to price increases but noted wholesale partners expected them. He highlighted that Merrell is already demonstrating strong growth and that both the Work Group and Sweaty Betty showed sequential improvement. CFO Taryn Miller clarified that the majority of the tariff impact is expected to hit in Q4, as it will be the first full quarter with the higher rates.

Mauricio Serna requested clarification on the term 'better conversion of Fall 2025 U.S. wholesale orders' mentioned in the CFO presentation. He also asked about the expected growth for U.S. wholesale in the second half and plans for new store openings in the U.S. DTC business.

Answer

EVP and CFO Jim Swanson explained that 'better conversion' refers to improved cancel rates, reorder rates, and replenishment metrics, making it the best performing season in several, driven by demand exceeding curtailed inventory supply and strong sell-through of new products and the 'Engineered for Whatever' campaign. For the second half, Jim Swanson stated the Fall 2026 U.S. wholesale order book is up, at the low end of mid-single- to low-single digit growth. For DTC, modest store openings worldwide are planned, with U.S. new openings offsetting closures due to fleet rationalization.

Mauricio Serna requested clarification on the term 'better conversion of fall 2025 U.S. wholesale orders' and its meaning. He also asked about the expected growth rate for U.S. wholesale in the second half and the company's plans for new store openings and their cadence for the U.S. DTC business.

Answer

EVP and CFO Jim Swanson explained that 'better conversion' signifies improvements in cancel rates, reorder rates, and replenishment metrics, marking it as the best-performing season in several years. This was attributed to curtailed inventory leading to demand exceeding supply, and strong sell-through driven by new products and marketing. For the second half, he projected U.S. wholesale growth at the low end of mid-single- to low single-digit rates. Regarding U.S. DTC, new store openings are modest and largely offset by closures as the company rationalizes its fleet.

Mauricio Serna inquired about the underlying growth in the 2025 order book, the factors driving the U.S. DTC deceleration (promotional strategy vs. consumer pressure), and the rationale for the implied revenue deceleration from Q3 to Q4 in the guidance.

Answer

Chairman, President & CEO Tim Boyle explained that the U.S. DTC comparison is difficult due to heavy liquidation of PFAS inventory in the prior year and expressed optimism for improvement driven by new marketing and a revamped website. He attributed the cautious Q4 outlook to the anticipated negative impact of tariff-related price increases on consumer sentiment and spending, which are expected to manifest late in Q3 and into Q4.

Mauricio Serna asked about the readiness of the spring 2026 assortment across the major brands, considering the Q4 challenges, and the potential for stronger results in the first half of next year. He also requested clarification on the specific price increases planned for spring 2026 to offset tariffs.

Answer

Chairman and CEO Tom Chubb reiterated that assortment challenges were primarily for the current season's product, as spring 2026 buys were placed after the significant tariff threat had subsided or alternative sourcing was secured. He noted that tariffs would still be present in spring 2026, unlike spring 2025. Mr. Chubb and CFO and COO Scott Grassmyer confirmed price increases for spring 2026 ranging from 4% to 8%, with approximately 4% specifically targeting the dollar impact of tariffs.

Mauricio Serna inquired about the impact of the Tommy Bahama sale timing on quarter-to-date positive comps and sought clarification on why the full-year EPS outlook was maintained despite a lower net tariff impact. He also asked about the drivers for the expectation of inventory levels decreasing or moderating.

Answer

Scott Grassmyer, CFO and COO, clarified that the Tommy Bahama sale shift was within the quarter, and current quarter-to-date comps are now on an 'apples-to-apples' basis. He explained that while overall tariff exposure increased, further mitigation efforts (accelerated receipts, sourcing shifts, vendor concessions, and select price increases) kept the net tariff impact neutral to previous expectations, thus maintaining the EPS outlook. He added that inventory levels are expected to moderate because the need for accelerated purchases, which previously drove increases, has subsided as the tariff situation stabilized.

Mauricio Serna asked for clarification on the positive quarter-to-date comp trend, specifically the impact of the Tommy Bahama sale timing. He also sought an explanation for maintaining the full-year EPS outlook despite a lower net tariff impact, and the drivers behind the expectation for inventory levels to moderate.

Answer

CFO and COO Scott Grassmyer clarified that the Tommy Bahama sale timing was entirely within the quarter, shifting from early September last year to August this year, and the business is now back to an 'apples-to-apples' comparison. Regarding tariffs, he explained that while overall exposure increased, accelerated receipts and sourcing shifts mitigated roughly half of the potential $80 million impact, with additional mitigation from price increases and vendor concessions, keeping the net impact neutral to prior expectations. On inventory, Mr. Grassmyer stated that the expectation for moderation excludes capitalized tariff costs, as the need for accelerated purchases to avoid tariffs has subsided, with Q2's increase primarily due to capitalized tariffs and acceleration.

Mauricio Serna asked about the positive quarter-to-date comp trend, specifically if the timing of the Tommy Bahama sale was a tailwind and if the business was positive excluding that. He also questioned why the full-year EPS outlook was maintained despite a lower net tariff impact and unchanged sales outlook, and sought clarification on the expectation for inventory levels to decrease.

Answer

Scott Grassmyer, CFO and COO, clarified that the Tommy Bahama sale timing shift (August to September) was within the quarter, and the business is now on an apples-to-apples basis after Labor Day. Regarding EPS, he explained that while overall tariff exposure increased, further mitigations like accelerated receipts and sourcing shifts kept the net impact similar to previous guidance. For inventory, Mr. Grassmyer stated that levels are expected to decrease, excluding capitalized tariff costs, as the need for accelerated purchases subsides now that the tariff situation has stabilized.

Mauricio Serna of UBS Group AG requested clarification on the updated $40 million tariff impact, asking if this was a gross or net figure and about the timeline for mitigation strategies to take effect in operations.

Answer

EVP, CFO & COO Scott Grassmyer clarified that the $40 million is the gross impact, an increase from the prior $9-10 million estimate due to newly implemented tariffs. He explained that mitigation efforts, such as sourcing shifts and select price increases, will not fully impact the current year's largest seasons but are expected to fully mitigate the tariff impact by spring 2026 as the company reduces its China sourcing from 40% to below 10%.

Mauricio Serna from UBS requested clarification on the updated $40 million tariff impact, asking if it represented a gross or net figure, and inquired about the timeline for the company's mitigation strategies to take effect.

Answer

CFO and COO Scott Grassmyer clarified that the $40 million is the gross impact, up from a $9-10 million estimate, due to newly implemented tariffs. He detailed the mitigation plan, stating that while little could be done for the Spring/Summer 2025 seasons, the company expects to be fully mitigated by Spring 2026 by significantly reducing its sourcing from China to below 10%.

Mauricio Serna from UBS inquired about Designer Brands' quarter-to-date sales momentum in Q4 and sought clarification on the wide range for full-year Q4 sales guidance. He also asked about Q4 gross margin expectations and the current promotional environment.

Answer

Doug Howe, CEO of Designer Brands, confirmed Q3's momentum continued into Q4, highlighting strong performance in top eight brands, boots, and affordable luxury. He attributed the Q4 sales guidance range partly to temporary timing shifts in brand segment deliveries. Regarding gross margin, Howe anticipated continued markdown rate favorability in Q4, noting a promotional environment but no significant customer resistance to higher prices, and a strategic pullback on unprofitable digital promotions.

Mauricio Serna from UBS Group inquired about the sequential sales trends within the quarter, including comparable sales performance and momentum into August. He also asked for details on the anticipated impact of tariffs on Q3 profitability and a breakdown of the $20-$30 million SG&A savings for the full year.

Answer

CEO Doug Howe reported sequential improvement in sales, particularly in athletics and women's dress, with positive momentum continuing into August, though total comps remained slightly negative. EVP, CFO & Chief Administrative Officer Jared Poff clarified that store comps turned positive in August, driven by a strategic shift away from less profitable digital sales. Mr. Howe addressed tariffs, emphasizing concern over indirect consumer sentiment impacts rather than direct costs, noting selective price increases. He also detailed the inventory strategy, reducing choice count by 25% while increasing depth by 15% to boost in-stock levels and store conversion. Mr. Poff outlined SG&A savings: one-third from professional fees, half from personnel actions, and the rest from depreciation and occupancy.

Mauricio Serna from UBS followed up by asking for more details on Designer Brands Inc.'s strategy for deeper assortment, specifically which brands or categories are seeing increased depth. He also requested a breakdown of the $20-$30 million SG&A dollar savings expected for the full year.

Answer

CEO Doug M. Howe explained that the deeper assortment strategy focuses on increasing product availability and in-stock levels for top brands and categories. He noted that choice count for the back half of 2025 is down 25%, while depth is up 15%, which is driving strong in-store conversion by ensuring customers find their desired style and size. CFO Jared Poff detailed the SG&A savings, attributing about a third to reduced professional fees and consultants, roughly half to personnel-related actions (corporate and store-level flex), and the balance to other areas like depreciation and occupancy.

Mauricio Serna inquired about the interquarter sales trends, specifically how comp sales progressed throughout the second quarter and the momentum observed continuing into August.

Answer

CEO Doug Howe noted sequential improvement throughout Q2, highlighting strong performance in women's dress and athletics, with positive momentum extending into August. CFO Jared Poff clarified that while total comps were still slightly negative, the company is deliberately pulling back on less profitable digital sales, and store comps turned positive in August.

Mauricio Serna from UBS asked about quarter-to-date business trends, the expected impact of tariffs in Q2, revenue expectations for the Topo brand in 2025, and the specific performance of the athletic and athleisure category.

Answer

CEO Doug Howe stated that Q2 trends are similar to the end of Q1 and that the primary tariff impact is indirect, affecting consumer sentiment. While not providing a specific revenue target for Topo, he highlighted its 84% growth. He confirmed the athletic category outperformed the broader assortment, with DSW gaining market share and the top eight brands (mostly athletic) posting a flat comp for the quarter.

Mauricio Serna requested more details on the performance of other parts of G-III's business, specifically asking about Nautica, and initial thoughts on the launches of Nike (Converse apparel) and BCBG. He also followed up on gross margin guidance, asking if the pressure for Spring 2026 would be more aligned with Q3 or sequentially better than Q4.

Answer

Morris Goldfarb (CEO, G-III Apparel Group) explained that Nautica was licensed to replace categories vacated by Tommy Hilfiger, and it is growing nicely, exceeding expectations. He described Halston as a long-term opportunity, not yet at scale but showing promise with improving deliveries. BCBG, recently shipped to over 300 doors, is performing well. Converse apparel, a global license through Nike, is a unique and exciting opportunity, expanding G-III's active/skate business without cannibalization. He also mentioned plans for one or two other scalable license announcements and a focus on private label initiatives. Neal Nackman (CFO, G-III Apparel Group) clarified that the tariff impact was most significant in Q4, with pickups expected in the reverse order for next year, implying sequentially better gross margins than Q4.

Mauricio Serna requested more details on the performance of other licensed businesses, specifically Nautica, and initial insights into the launches of Nike (Converse apparel) and BCBG.

Answer

Morris Goldfarb (CEO) reported that Nautica is growing nicely and exceeding expectations, serving as a replacement for categories vacated by Tommy Hilfiger. He described Halston as a long-term opportunity, improving with each delivery. BCBG, launched recently in over 300 doors, is performing well. Converse apparel, a global license through Nike, is a wide-open field and a new, non-cannibalizing initiative for G-III. He emphasized focusing on scalable licenses with potential to exceed $100 million in sales within three years. Neal Nackman (CFO) clarified that tariff impacts were most significant in Q4, with pickups expected in reverse order next year.

Mauricio Serna from UBS Group AG asked for quantification of the Q2 revenue timing shift and its distribution between Q3 and Q4. He also sought clarity on the expected mitigation of the $135 million potential tariff impact and whether a similar impact should be anticipated for the first half of the next fiscal year.

Answer

CFO Neal Nackman attributed approximately $30 million of the Q2 revenue decline to supply chain disruptions from tariff uncertainty, with the remainder being sales shifts into both Q3 and Q4. Chairman & CEO Morris Goldfarb added that the Hudson Bay bankruptcy and Sonia Rykiel launch cancellation also contributed. Regarding tariffs, Nackman described the mitigation process as fluid and ongoing, involving negotiations with retailers and vendors, and thus declined to specify a bottom-line impact. He noted that for future seasons, higher costs can be incorporated into upfront pricing.

Mauricio Serna from UBS Group AG asked for clarification on the size of the Q2 revenue timing shift and its distribution into Q3 and Q4. He also questioned how much of the $135 million potential tariff impact G-III expects to mitigate and if a similar impact is anticipated for the first half of the next fiscal year.

Answer

CFO Neal Nackman stated that approximately $30 million, or half of the Q2 revenue shortfall, is due to supply chain disruptions from tariffs, with the remainder being sales shifting into both Q3 and Q4. CEO Morris Goldfarb added that the Hudson Bay bankruptcy and Sonia Rykiel postponement also contributed. Regarding tariffs, Nackman described the mitigation process as fluid and ongoing, making it difficult to quantify the final impact, but noted that for future seasons, higher costs can be built into upfront pricing. He also confirmed the full-year sales guide was maintained due to strength in the rest of the brand portfolio.

Mauricio Serna asked about the strategies for maintaining momentum post-fashion show, initiatives planned for early 2026, and market share opportunities in bras and beauty, especially with PINK intimates returning to growth. He also inquired about strategies to reduce promotions and their contribution to gross margin expansion.

Answer

CEO Hillary Super explained that momentum is sustained by the fashion show's halo effect, strong traffic, and focus on Path to Potential pillars, leading to increased market share and customer file growth. She highlighted a strong innovation pipeline for bras and beauty in 2026, and learnings from PINK collaborations. CFO Scott Sekella added that promotional pullbacks significantly benefited Q3 gross margin, with GWPs effectively driving higher average order values, and noted that reducing promotions is a multi-year journey.

Mauricio Serna with UBS inquired about the strategies for maintaining post-fashion show momentum into 2026, focusing on market share opportunities in bras and beauty, especially with PINK intimates' growth. He also asked about the impact of promotional pullbacks on gross margin expansion.

Answer

CEO Hillary Super highlighted sustained momentum from the fashion show, strong traffic, and international growth, driven by bras and sexy/glamour categories. She emphasized the success of the Path to Potential strategy, customer file growth, and higher Average Unit Retail (AURs). She also mentioned a strong innovation pipeline for bras and beauty in 2026, leveraging learnings from PINK collaborations like LoveShackFancy and the TWICE partnership. CFO and COO Scott Sekella added that promotional pullbacks significantly benefited Q3 gross margin, with a strategic shift to Gift With Purchase (GWP) offers driving higher average order values, noting that promotions will be a multi-year journey.

Mauricio Serna from UBS Group AG asked about quarter-to-date sales trends, excluding the impact of the recent security incident, and sought clarification on the drivers of the Q1 gross margin miss relative to guidance.

Answer

CEO Hillary Super confirmed that the positive sales trajectory seen in March and April continued into May, indicating solid underlying business momentum. CFO Scott Sekella attributed the gross margin miss versus expectations to an unexpected raw material write-off related to tariff-driven resourcing and a strategic decision to amplify 'gift with purchase' promotions more than originally planned.

Mauricio Serna sought clarification on Signet Jewelers' statement of being 'well within the range' for Q4 guidance, asking if it implied the top end or midpoint. He also asked about the promotional environment, specifically what Signet has observed at an industry level and its expectations for promotional intensity year-over-year.

Answer

COO and CFO Joan Hilson explained that being 'well within the range' for Q4 top-line guidance is based on Black Friday being a small part of the quarter and historical improved run rates from November to December. She noted that the guide's variability provides flexibility for pricing actions and EBIT, expressing cautious optimism for December. CEO J.K. Symancyk stated that it's prudent to be prepared for a promotional environment given consumer uncertainty, noting a slight increase in promotional response in November. He emphasized Signet's readiness to deliver value propositions without quantifying exceptional promotional activity, focusing on flexibility to drive top-line performance.

Mauricio Serna sought clarification on the Q4 guidance statement, 'well within the range,' and asked about observations and expectations for the industry's promotional environment.

Answer

COO and CFO Joan Hilson clarified that 'well within the range' reflects the small impact of Black Friday weekend on the overall quarter and historical improved run rates from November to December. She stated that the range provides flexibility for pricing actions and consumer spending variability. CEO J.K. Symancyk added that it's wise to be prepared for a promotional environment given consumer uncertainty, noting a slight increase in promotional response in November, but nothing exceptional.

Mauricio Serna from UBS Group asked for more detail on the quarter-to-date performance in Q3, comparing it to the strong results seen in July. He also sought clarification on the specific tariff assumptions underpinning the high and low ends of the updated full-year operating income guidance.

Answer

Chief Operating & Financial Officer Joan Hilson stated that the positive comp trend from July has been fairly consistent into August, though she noted some pricing resets and cool-downs will occur in Q3. Regarding guidance, Hilson clarified that the middle-to-lower end of the EBIT range assumes the 50% Russian penalty on Indian imports remains, while the upper half assumes the penalty is removed, reverting the tariff to 25%.

Mauricio Serna requested more details on the third quarter's quarter-to-date performance compared to the end of July, which was noted as the strongest month, and how this impacts the Q3 sales guidance. He also asked for a breakdown of the expected tariff pressure on Q4 guidance, specifically differentiating between the high and low ends of the adjusted operating income range.

Answer

COO and CFO Joan Hilson confirmed a strong exit from Q2, with July being the toughest but highest comp month. She noted consistent comp trends across recent months and a positive comp trend in August, with some pricing resets and cooldowns expected in Q3. Regarding tariffs, Joan Hilson clarified that if the Russian penalty on Indian imports remains (50% tariff), they expect to be in the middle to lower end of the EBIT range. If the penalty is removed (reverting to 25% tariff), they anticipate being in the upper half of the range.

Mauricio Serna from UBS Group AG requested details on the current lab-grown diamond penetration, confirmation of quarter-to-date sales trends, clarification on the two-year stack guidance, and the outlook for full-year gross margin leverage.

Answer

CFO Joan Hilson confirmed that lab-grown diamond (LGD) penetration is now approximately 20% of the business, up five points year-over-year, largely driven by fashion. She stated that quarter-to-date performance was near or above the high end of the Q2 guidance range. She clarified that the full-year guidance provides flexibility, with the low end reflecting a two-year stack consistent with Q2. For gross margin, she expects continued expansion for the full year, with leverage achievable on a slightly positive comp.

Mauricio Serna requested more details on the marketing strategies for each brand and the planned investments for Q4. He also asked for a breakdown of Abercrombie brand's Q3 comparable sales performance, specifically how it reflected AUR versus units or total sales.

Answer

CFO Robert Ball stated that marketing is intentional, focusing on brand building, customer engagement, and long-term growth, with optimized spend. For Abercrombie's Q3 performance, he noted a 7% comparable sales decline, with sequentially improved AUR (though still down), positive traffic, and improving conversion rates.

Mauricio Serna from UBS inquired about the specific marketing strategies and investment plans for each brand in the current quarter, as indicated by increased Q4 guidance. He also requested a breakdown of Abercrombie brand's Q3 comparable sales performance, specifically how it reflected average unit retail (AUR) versus units or total sales.

Answer

CFO Robert Ball explained that marketing efforts are intentional, focusing on brand building, customer engagement, and long-term growth, with continued optimization of spend. For the Abercrombie brand's Q3 performance, he noted a 7% comparable sales decline, with sequentially improved AURs (though still down from prior year), positive traffic, and improving conversion rates.

Mauricio Serna of UBS Group AG asked for clarification on Abercrombie's 'third-party channel headwinds,' any quarter-to-date signs of improvement for the brand, and a more detailed breakdown of the Q2 gross margin decline.

Answer

CEO & Director Fran Horowitz expressed confidence in Abercrombie's trajectory, citing a strong start to Q3 driven by a successful denim event and emerging trends. SVP & CFO Robert Ball clarified the third-party headwind was minor and related to order timing. He attributed the Q2 gross margin decline to AUR pressure from clearing inventory and a $5M tariff impact, noting freight costs had normalized as expected.

Mauricio Serna requested a breakdown of the Q1 gross margin decline between carryover inventory and freight costs, the outlook for inventory growth, and how Hollister plans to sustain growth in the second half against tougher comparisons. He also asked for more color on Q2 gross margin evolution.

Answer

CFO Robert Ball explained that freight pressure accounted for more than half of the Q1 gross margin decline, with carryover pressure making up the balance. He expects inventory units to align with sales growth going forward. CEO Fran Horowitz addressed Hollister's growth, citing its evolution to be more culturally relevant and its focus on key life moments for teens. For Q2 gross margin, Ball guided for sequential improvement from Q1 as freight and carryover pressures are expected to lessen.

Mauricio Serna asked about Q4 promotional activity, the components of the Q4 gross margin change, the plan for store openings by region and brand, and whether Abercrombie's growth would come from comps or new stores.

Answer

CFO Robert Ball explained that while promos were pulled back for much of Q4, higher freight costs offset AUR gains. He noted January was more promotional to clear seasonal inventory. For 2025, the company will be a net store opener again, with a slight lean towards EMEA and the A&F brand. COO Scott Lipesky added that the goal is always to drive positive comp sales, with new stores and future third-party partnerships providing additional layers of growth.

Mauricio Serna asked for a breakdown of the Q1 gross margin decline between freight and inventory pressure, the inventory growth outlook, and the strategy for sustaining Hollister's growth against tougher second-half comparisons.

Answer

SVP & CFO Robert Ball stated that freight accounted for 'more than half' of the 440 basis point gross margin decline in Q1, with carryover pressure making up the balance. CEO Fran Horowitz attributed Hollister's momentum to its cultural relevance and expressed confidence in future initiatives. Ball emphasized the goal is to grow the total company portfolio, not just one brand.

Mauricio Serna from UBS inquired about the health of the U.S. consumer entering the holiday season, specifically regarding potential pressure on lower-income consumers. He also asked about the sustainability of women's denim business growth, men's denim demand trends, and the factors contributing to the 10 basis point decrease in merchandise margin during the quarter.

Answer

Dennis Nelson, President and CEO of Buckle, noted no significant change in consumer behavior, with excitement for products despite a slight dip in units per sale, and expressed optimism for the excellent and varied ladies' denim business, including the positive impact of higher-priced branded sources. He also confirmed solid performance for men's private label denim. Tom Heacock, Senior Vice President of Finance, Treasurer, and CFO, clarified that while Q3 merchandise margins saw a slight decrease, year-to-date margins were strong, with Q1 and Q2 reaching all-time highs. He attributed the Q3 margin shift primarily to a slight reduction in private label business due to strong branded performance, especially in women's denim, and minor cost increases from tariffs.

Mauricio Serna from UBS asked for details on the cadence of second-half revenue growth, particularly the drivers behind the Q4 acceleration. He also requested more information on the Lee brand's distribution opportunities and the specific actions being taken to improve the business in the APAC region. Lastly, he asked about tariff mitigation strategies, including production shifts and the market reaction to price increases.

Answer

EVP, CFO & Global Head of Operations, Joe Alkire, explained that the Q4 revenue acceleration is driven by the inclusion of a 53rd week and the fact that Helly Hansen's business is seasonally weighted toward the fourth quarter. President, CEO and Chair, Scott Baxter, and Alkire added that actions for Lee in APAC involve improving inventory and strengthening the retailer base to establish a stronger foundation for growth. Regarding tariffs, Alkire noted mitigation is a holistic strategy involving production moves, supplier partnerships, and pricing, while Baxter emphasized that the brands' stronger competitive positions enable strategic pricing actions.

Mauricio Serna of UBS Group inquired about the organic growth expectations for the Rag & Bone brand, the performance trajectory for the Americas retail business, and the potential for operating margin expansion in the second half of the year.

Answer

CEO & Director Carlos Alberini expressed strong satisfaction with Rag & Bone's performance, citing growth from new stores, expanded product categories, and a robust wholesale business, projecting revenues to exceed $320 million. For Americas Retail, he noted that despite traffic headwinds, improved product assortment and execution are leading to better conversion and positive signs. Interim CFO Dennis Secor detailed that the year's growth has an 'inverted bell curve' shape, with operating margin compression expected through Q3 but with an opportunity for leverage and improvement in Q4, driven significantly by a favorable currency tailwind.