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CFO John Klinger clarified that while transactions were up, a higher average basket was a slightly larger factor in Q2, especially at Marmaxx. He noted the inventory hedge was a slight headwind. For the margin bridge, he pointed to the timing of expense reversals into Q3 as a headwind, while also reiterating the previously mentioned impacts from inventory capitalization in Q3 and shrink accrual in Q4.

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CFO John Klinger stated that mitigation efforts for the back half include better buying, expense initiatives, and productivity strategies, not just pricing. CEO Ernie Herrman and CFO John Klinger both confirmed there are no signs of customer trade-down. Klinger reiterated that sales growth is being driven by customer transactions, indicating strong foot traffic.

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CFO John Klinger confirmed that the operating model, where a 3% to 4% comp yields flat to slightly higher margins, still holds. Regarding real estate, he stated that TJX sees significant availability, particularly from department store and large box closures in rural and other areas, which supports the company's increased long-term store potential.

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CEO Ernie Herrman attributed the strong November start at Marmaxx to normalizing weather patterns and the arrival of strong gift-giving assortments. CFO John Klinger noted that one-time items provided a tailwind this year and that the planned expansion into Spain is not expected to be a major headwind for next year's margins.

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Arc'teryx CEO Stuart Haselden stated that with easier comparisons ahead, he expects the omni-comp to continue at H1 levels or higher. CFO Andrew Page attributed the modest Americas growth to strong double-digit gains at Arc'teryx and Solomon being offset by slower growth in the Ball and Racket segment, which was impacted by softness in certain categories and cautious retailer ordering. For Ball and Racket's long-term growth, he noted the business is still 85% equipment and its acceleration depends on scaling the Tennis 360 concept in North America.

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Arc'teryx CEO Stuart Haselden highlighted strong performance in footwear and the Gamma franchise as key drivers. He explained that shifting from partner to owned stores in China is a strategy to elevate brand execution with larger, more productive stores in premium locations. This move captures multiple benefits, including the financial uplift of recognizing full retail sales versus wholesale revenue.

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Arc'teryx CEO Stuart Haselden highlighted strong product performance, with footwear up 41% and the women's category up 38%. He explained the China strategy involves elevating the brand by moving to premium, larger-format owned stores. This shift from a wholesale to a retail model captures higher revenue and margin per location and improves brand execution.

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CFO Andrew Page clarified that the cautious EBIT margin outlook is due to general macro uncertainties early in the year. Regarding sourcing, he reiterated that of the approximately 20% of global sourcing destined for the U.S. from China, Vietnam, Canada, and Mexico, the majority comes from Vietnam and China, with China being slightly larger.

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CFO Andrew Page confirmed that SG&A leverage is expected to be flat next year. Arc’teryx CEO Stuart Haselden added that while the current guidance is responsible, there is significant upside potential from growth across regions, channels, and product innovations in footwear and women's categories. He noted the company is just getting started in North America, Europe, and Asia Pacific.

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CFO & COO Scott Roe explained that the early termination of de minimis, which allowed for duty-free e-commerce shipments, accounted for about one-third of the $0.60 tariff headwind but that the operational impact is manageable. Coach CEO Todd Kahn clarified that the Q4 slowdown in Europe was an intentional strategic pullback from certain wholesale accounts to protect brand equity, not a reflection of weaker consumer demand.

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CFO and COO Scott Roe stated the gross margin beat was due to solid operational fundamentals, including improvements in both Average Unit Revenue (AUR) and Average Unit Cost (AUC), with no price resistance from consumers. He noted Kate Spade's margin discipline is a positive indicator. Coach CEO Todd Kahn added that Coach achieved a record 79% gross margin for the third quarter and expects to remain in that 'neighborhood,' driven by brand strength and value proposition rather than just pricing.

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CEO Joanne Crevoiserat responded that she sees the opportunity as an 'and, not an or,' with potential for both continued AUR gains and future unit growth driven by new customers and category expansion. CFO and COO Scott Roe added that while profit flow-through will continue, the company will prioritize leaning into strategic investments, such as increased marketing for Kate Spade, to drive long-term brand health, even if it moderates short-term profit.

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CFO & COO Scott Roe confirmed the Amazon pipe fill from the prior year was a factor in the wholesale decline, but also attributed it to general order timing, noting it's not a fundamental business change. Coach CEO Todd Kahn added that excluding wholesale, the Coach brand grew 3% globally in constant currency, driven by strong direct business trends in North America and continued AUR growth.

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CEO & CFO Martin Hoffmann indicated that the full-year guidance implies a consistent growth cadence across Q3 and Q4, with continued strength in APAC, a strong but cautiously approached U.S. market, and a similar outlook for Europe. Co-Founder & Executive Co-Chairman David Allemann clarified the apparel strategy: it originates from core performance but expands into the broader 'sports fashion' space. He confirmed they are building a sports fashion brand for a wider audience but will do so in a distinct, elevated, and premium manner, not by entering the 'sea of sameness'.

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An executive, likely CFO Martin Hoffmann, clarified that overall Q4 net sales growth is expected to exceed Q3, without specifying the D2C channel's exact rate. Regarding the multi-year margin, he reiterated the philosophy of balancing growth with investment. The current outperformance demonstrates the model's strength, but the plan remains a gradual increase toward the 2026 EBITDA target, using the flexibility to invest in long-term drivers like innovation and technology.

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CFO Justin Picicci explained that the Q2 momentum is broad-based, led by the direct-to-consumer channel and continued international strength. He clarified that the anticipated second-half slowdown in Europe is due to a planned shift in wholesale receipts from chase reorders to pre-order bookings and lapping last year's timing shifts related to the Red Sea disruption.

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CFO Justin Picicci reiterated that AUR growth has multiple durable drivers beyond just price increases, such as mix and discount reduction. He confirmed that while proactive pricing was taken for Fall '25, the company retains flexibility to use its full toolkit to mitigate evolving tariff impacts. For the full-year geographic outlook, he guided Asia to high single-digit growth, Europe to mid-single-digits, and North America to be down low-to-mid-single digits due to second-half caution.

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Executive Justin Picicci explained the Q4 margin outlook reflects that it is a smaller, more promotional end-of-season quarter compared to the strong full-price selling of Q3. Regarding wholesale, he expressed confidence in the underlying trends and noted that stabilizing the business is a key milestone. Executive Patrice Louvet added that wholesale must be segmented, with strong momentum in luxury and online channels, while the company continues to prune lower-performing doors.

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CFO Justin Picicci noted encouraging signs in North America wholesale, with sell-in and sell-out aligning, but called for stabilization rather than positive growth. On SG&A, he confirmed the full-year guidance implies leverage and that while choiceful investments were made in H1, the company is controlling expenses and expects the marketing rate to rebalance in H2.

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CFO Antonio Piccon stated that 46 Daytona units were shipped in Q4. He explained that H1 2025 is expected to be stronger because Daytona deliveries will phase out by Q3, and the new F80 supercar will only contribute a few units late in Q4. CEO Benedetto Vigna addressed the EV question by stating Ferrari's electric car will be 'unique' and differentiated by technology and driving thrills, with more details to be shared in October.

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CFO Antonio Picca Piccon confirmed 77 Daytona units were shipped and explained that a less rich product mix and higher spending could pressure margins later in the year. CEO Benedetto Vigna emphasized the EV's focus is on emotion, with critical components like batteries and axles developed in-house to guarantee a timeless Ferrari experience.

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CEO Benedetto Vigna explained that personalization is consistently around 20% across models, driven significantly by demand for carbon fiber finishes. Regarding the EV, he emphasized the strategy of 'technological neutrality' to offer clients choices across all powertrain types, confirming a Q4 2025 launch for the first full electric model.

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President & CEO Bracken Darrell explained that Q1 is a seasonally small quarter for The North Face and that a stronger focus on spring/summer lifestyle apparel is a key future growth driver. For Vans in Europe, he stated the turnaround trajectory is similar to the U.S., with ebbs and flows, and the overall recovery is expected at a comparable pace.

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EVP and CFO Paul Vogel explained the working capital shift was a strategic prepayment of a payable. He noted CapEx plans remain flexible to support initiatives like store remodels. President and CEO Bracken Darrell outlined the Vans strategy, emphasizing new leadership, new product rollouts like the Super Low Pro, and disciplined channel management, with improvements expected to cascade through the upcoming seasons.

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EVP and CFO Paul Vogel explained the Q3 outperformance was split between wholesale and DTC, with wholesale being a larger factor due to order pull-forwards and stronger reorders. President and CEO Bracken Darrell stated that the Vans turnaround will take time, with new product influence expected around back-to-school and holiday, and emphasized the need for patience to allow the new brand leadership to operate effectively.

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CEO Bracken Darrell clarified that wholesale is outperforming DTC for Vans, which he had previously anticipated due to retail traffic challenges. He explained that the new regional platform is strengthening relationships and execution with key wholesale accounts in the Americas, mirroring successful strategies from other regions.

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CEO Stefan Larsson clarified that the Calvin Klein operational challenges were transitory, stemming from the necessary centralization of its global product engine, and are already improving. CFO Zac Coughlin then detailed the cost actions, stating they are on track to deliver 200 basis points of SG&A leverage by Q4 2025. He identified key pillars as creating a single global tech stack and optimizing the global logistics network, emphasizing these actions are improving efficiency without harming operations.

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CEO Stefan Larsson stated that significant value drivers in the second half of 2025, including European order book growth and cost efficiencies, are not dependent on consumer trends and will position PVH for a step-up in profit levels in 2026. CFO Zachary Coughlin added that these foundational actions will result in a much higher Q4 2025 operating margin, creating a new, elevated starting point for 2026.

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CFO Zac Coughlin attributed the Q4 gross margin decline to three main factors: a more promotional U.S. holiday season (~80 bps), modest freight cost increases (~40 bps), and a North America wholesale timing shift (~60 bps), noting most of the impact is transitory. CEO Stefan Larsson described the 'flywheel' as a cycle where stronger product drives consumer engagement and marketplace success, which is then amplified by data-driven operations and strategic investments to build brand relevance.

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CEO Stefan Larsson explained that the company strategically avoided deep, low-quality clearance sales in July, which impacted the top line but protected margins. He noted that as new, full-price fall products arrived in August, consumer demand trends began to recover. CFO Zac Coughlin confirmed that the Q3 and full-year outlook is based on these recent, more moderate trends and does not assume a significant re-acceleration.

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Group President and COO Michael Hartshorn attributed the wide Q2 guidance range to caution around prolonged inflation and the unknown impact of tariffs on consumer spending. Regarding sourcing, he noted that for closeouts, Ross is agnostic to origin, and direct control is limited to a small portion of imports. Executive James Conroy added that all off-price players are subject to the same market dynamics for China-sourced goods.

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Group President and COO Michael Hartshorn explained the wide guidance range reflects caution due to prolonged inflation impacting their core customer and the unknown effects of tariffs hitting consumers in late Q2. On sourcing, he clarified that Ross is agnostic to origin for closeouts and only has direct control over the small portion it directly imports, mainly in home and shoes.

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Group President and COO Michael Hartshorn explained the guidance was widened due to early-year uncertainty, with comps planned to be neutral through the rest of the year. EVP and CFO Adam Orvos added that the neutral merch margin guide balances the benefits of the branded strategy with factors like tariffs and a flattish outlook for shrink.

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CFO Adam Orvos attributed the Q3 EPS beat to one-time factors like a shrink true-up and packaway timing, as well as strong cost management. Both Orvos and Group President & COO Michael Hartshorn confirmed that the company's sales leverage point has not changed and remains in the 3% to 4% comp growth range.

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Group President and COO Michael Hartshorn attributed the strong margin flow-through to both sales leverage and better-than-planned performance on cost initiatives. CFO Adam Orvos clarified that the merchandise margin pressure from the brand strategy accelerated from Q1 to Q2 (80 basis points) and is expected to increase further in the second half as the penetration of brands continues to ramp up.

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EMEA President Nico Bouyakhf explained the EMEA result was against a very strong prior-year comparison and that the company is performing 'rightsizing' actions in certain markets to ensure high-quality growth. An executive covering APAC noted the region's strong performance was driven by DTC, with traffic and conversion rates remaining high. He confirmed product trends like premiumization are similar to other regions.

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VP, Global Finance Alexander Hoff stated that the gross margin headwind from the Pasewalk factory will lessen quarter-by-quarter. President Americas David Kahan explained that managing allocation is a core strategy to keep stock-to-sales ratios healthy, viewing unmet demand as part of the 'flywheel impact' that fuels the brand. CEO Oliver Reichert added that the company does not have a specific tariff-related price increase planned and instead adjusts prices surgically by style each season.

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Alexander Hoff, VP of Global Finance, confirmed that fiscal 2024 provides a 'clean' baseline for modeling 2025, with no unusual items to consider. He noted that gross margin improvement is expected primarily in the second half of fiscal 2025. For SG&A, he indicated that the quarterly cadence of fiscal 2024, accounting for normal seasonality, is a good starting point for projecting 2025.

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Co-CEO Michael Karanikolas noted that while they have initiatives to lower return rates, they expect year-over-year improvements to moderate. CFO Jesse Timmermans added that there is no significant consumer hesitation internationally, aside from specific weakness in Canada, and explained that Q2 S&D costs are typically seasonally higher.

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CFO Jesse Timmermans confirmed that the February sales growth rate bounced back nicely and was 'in the zone of that Q4.' He identified the full-price mix and the impact of tariffs as the main variables for the gross margin outlook. Regarding variable costs, he explained that approximately two-thirds of the 160 basis point improvement in fulfillment and S&D costs was driven by a lower return rate.

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CFO Jesse Timmermans detailed 2025 opportunities, including gross margin expansion and some leverage in fulfillment and distribution, but guided for marketing spend to remain elevated at 15-16% to support investment. He noted G&A leverage depends on sales growth. For Q4, he stated that despite a strong October, tougher multi-year comps in November and December and macro uncertainty led the company to model some moderation.

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CFO Meghan Frank attributed the 2024 gross margin beat to better-than-expected top-line leverage, a favorable product mix that improved initial mark-up (IMU), and reduced freight costs. For 2025, she stated the current guidance reflects their best view of the business, though acknowledges that outcomes for revenue and product mix could impact the final leverage points.

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CFO Meghan Frank clarified that the Q3 gross margin upside was driven by lower inventory provisions, higher IMU, and prudent management of fixed costs. For Q4, she guided to a 20-30 basis point gross margin decrease, expecting a 60-70 basis point product margin increase (with slightly improved markdowns) to be more than offset by deleverage on fixed costs related to store growth and distribution center projects.

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CFO Meghan Frank explained they are managing the P&L by protecting key long-term investments like international growth and brand awareness while finding efficiencies in discretionary spending. CEO Calvin McDonald detailed that the new structure, with design and merchandising as peers, fosters more creative conversations, better challenges the newness-to-core product ratio, and aligns the entire 'sell side' of the business under one leader for earlier and more effective demand creation.

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CFO Meghan Frank explained that the company is protecting key long-term investments like international growth while finding efficiencies in discretionary spending. CEO Calvin McDonald detailed that the new structure gives design and merchandising equal footing, fostering more creative outcomes and better alignment on the newness-to-core product ratio. It also integrates brand and merchandising under one leader for earlier alignment on demand creation.

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CEO Kecia Steelman emphasized that a balanced approach is essential in the competitive beauty landscape. She highlighted the 'Ulta Beauty Unleashed' plan's focus on supercharging core strengths like brand building, personalization, digital acceleration, and marketplace expansion, all centered on the guest.

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CFO Jill Timm stated that the Sephora rollout will be completed in 2025, but since these are smaller shops in smaller stores, the sales contribution will be less than in prior years, though the business saw an accelerating 13% comp in Q4. CEO Ashley Buchanan explained that 'friction' was created when highly productive and incremental categories like jewelry and petites were eliminated to make space for new initiatives like Sephora, alienating core customers with no substitute product. On promotions, she noted that efficiency can be gained by reallocating markdown dollars from less-impactful, point-of-sale discounts to more elastic, value-driving offers that customers actively seek, rather than 'peanut butter spreading' promotions across all categories.

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CFO Michael Baughn affirmed that the company is comfortable with the high-end guidance algorithm for the next few years, supported by margin recovery and a healthier store fleet. He explained that the refresh program is slowing because it has addressed the stores with the best return profile for that investment level, while other locations are better candidates for the more intensive 'reimagined' concept. He noted the fleet has already been significantly optimized by reducing exposure to lower-tier malls.

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EVP and CFO Michael Baughn explained that the Q4 guidance midpoint aligns with the trend from the past 180 days, balancing a favorable launch calendar against a tough apparel trajectory and a promotional environment. He stated that management views the current margin pressures as 'transitory, not structural,' and intends to continue recovering promotional costs into next year, contingent on the market firming up.

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CCO Frank Bracken acknowledged minor Red Sea shipping disruptions but stated they are being managed and are not a major risk. CFO Mike Baughn quantified the combined savings from the corporate and international changes, projecting a contribution of over 20 basis points to EBIT margin by 2027, excluding potential royalty upside.

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CFO Mike Baughn confirmed that confidence for the Q2 guidance stems from improving sales trends in March and April alongside reduced markdowns. Key Q2 drivers include the U.S. launch of the FLX loyalty program, accelerated store refreshes, and a new workforce management tool. CCO Frank Bracken provided specifics, stating the Canada FLX pilot drove higher enrollment, engagement, frequency, and basket sizes. He also noted that refreshed stores are delivering comp improvements, healthier margin profiles, and higher NPS scores compared to the rest of the fleet.

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President and CEO Elliott Hill outlined a focused investment strategy centered on sport, shifting marketing dollars to brand-building, and resourcing key cities and sports categories. CFO Matt Friend added that while overall expenses are being managed tightly, demand creation spending is increasing. He also highlighted significant near-term investments in Q3 to liquidate inventory and reset the marketplace, which is reflected in the financial guidance.

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EVP & CFO Matthew Friend explained that while overall spring order books were flat, newness and innovation within those orders are set to grow footwear units by mid-to-high single digits, led by strong momentum in Running. Regarding DTC, he stated the focus has shifted to balanced growth across the entire marketplace, but opportunities remain to improve Direct's profitability by leveraging the supply chain capacity built for it.

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COO & CFO Adrian Mitchell stated that sequential improvement is being seen across all dimensions—digital, stores, Macy's, and luxury—and that the goal is for 'all boats to rise.' He emphasized that learnings from the 'First 50' are proving replicable. CEO Antony Spring added that the higher penetration of best-performing categories in Q4 also supports the guidance. Mitchell noted they would share more on 2025 specifics on the next call but are focused on fundamentals.

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COO and CFO Adrian Mitchell noted that non-go-forward stores were performing slightly better than planned, which is factored into the outlook. He reiterated that sequential comp improvement is expected from executing on strategic initiatives. CEO Tony Spring added that inventory levels are well-managed, down double-digits from a few years ago, and the company is better positioned with transitional inventory and newness for Q3 than it was a year ago, with a focus on being in-stock for the customer.

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COO & CFO Adrian Mitchell confirmed there were no unusual one-time items in Q1 SG&A. Chairman & CEO Tony Spring stated that sales recapture from closed stores is slightly ahead of expectations. Regarding beauty, Spring acknowledged increased competition but expressed confidence in Macy's position as a key holiday destination, emphasizing value sets and a full-service staffing model.

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