Robert Drbul

Robert Drbul asked about the business development trends from December to February, including initiatives and current weather impact, and the status of the 85% complete order book. He also inquired about the optimal level of brand advertising spend for 2026 and metrics on U.S. brand equity progress.

Answer

Chairman and CEO Tim Boyle noted strong bookings, a cautious approach for Spring 2026 due to tariffs, and conservative winter product inventory, leading to low U.S. inventory. He highlighted the success of the Amaze collection and exciting brand impact projects. Regarding advertising, Tim Boyle felt they were efficient and in the right spot, while EVP and CFO Jim Swanson added that marketing spend increased from 5.9% in 2025 to 6.5% and is planned to be maintained at 6.4% in 2026 to ensure a louder market voice.

Robert Drbul asked about the business development trends from December to February, including current weather impacts, the status of the 85% complete order book, and expectations for remaining bookings.

Answer

Chairman and CEO Tim Boyle and EVP and CFO Jim Swanson expressed encouragement regarding strong bookings and the positive acceptance of the Amaze collection. They noted a cautious approach to Spring 2026 sales due to tariffs, resulting in low U.S. inventory. They also discussed the significant impact of weather and the potential for small lifts in orders. Regarding marketing spend, they confirmed an increase from 5.9% in 2025 to 6.5%, with plans to maintain around 6.4% in 2026, believing these investments provide a louder voice and differentiation.

Robert Drbul of Guggenheim Securities inquired about the positive order book for spring and fall 2025, asking for details on geographic differences and the drivers behind the impressive growth in China. He also asked about the timing of the increased demand creation spend in 2025.

Answer

CEO Tim Boyle stated that growth will be led by China and Europe, attributing success in China to localized products and a focus on store productivity. EVP & CFO Jim Swanson specified that the spring '25 order book supports mid-single-digit growth, while the fall '25 order book indicates low-single-digit growth. Regarding marketing, Boyle noted the spend would be more moderate in the first half and more aggressive in the fall, which Swanson confirmed would be amplified in the back half of the year.

Robert Drbul asked about the "Accelerate" growth strategy, specifically how Columbia plans to attract younger consumers and whether they are already in existing sales channels. He also inquired about the condition of the wholesale channel inventory given the slow, warm start to the season and humorously asked if a "Tough Father" ad campaign was planned.

Answer

Chairman, President and CEO, Tim Boyle, explained that younger consumers are already engaged with the brand internationally and the focus is on improving domestic engagement through a differentiated, humorous, and irreverent marketing approach with a new agency. Boyle confirmed the wholesale channel is in a good inventory position, awaiting colder weather to drive sales, and stated he would not be returning to acting for new ad campaigns.

Robert Drbul inquired about a timeline for Nike's commitment to returning to double-digit EBIT margins. He also asked about the depth of the necessary reset in China and whether the company is nearing a bottom in revenue or EBIT declines for that region.

Answer

President and CEO, Elliott Hill, affirmed that improving margins is a top priority, with a clear path back to double-digit EBIT margins despite pressures from Win Now Actions and tariffs. Regarding China, he described it as a powerful opportunity requiring a reset of approach, including structural changes and a focus on retail basics. He acknowledged that while early successes are seen, the pace is not yet ideal, but expressed confidence in returning Nike to a premium brand. EVP and CFO, Matthew Friend, added that margin expansion will be driven by growth, recovery of full-price mix, supply chain leverage, and disciplined cost management, particularly in operating overhead.

Robert Drbul asked for more details on the reception from NIKE's retail partners and the company's strategy for earning back shelf space.

Answer

President and CEO Elliott Hill stated that NIKE is committed to a consumer-led marketplace that serves both direct and wholesale channels. He emphasized his deep, long-standing relationships with key partners and noted their desire for NIKE to return to its roots of innovative products and bold brand marketing. Hill explained that earning back shelf space requires delivering coveted products and driving mutually profitable sell-through, confirming that partners are receptive to renewed collaboration.

Robert Drbul inquired about the current inventory situation, asking for a regional breakdown, particularly concerning North America and China, and the impact from the managed decline of classic franchises.

Answer

EVP & CFO Matthew Friend acknowledged that retail sales underperformed expectations, leading to slightly elevated inventory levels in North America and China. He clarified this affects the entire portfolio, not just classics. Friend stated that the outlook now incorporates a more muted view on retail sales and the need for increased promotional activity to clear inventory and scale new products.

Robert Drbul asked if pricing adjustments were a key driver of the improved trend in Canada and questioned how weather impacts have affected the in-store apparel assortment.

Answer

Executive Mark Walsh stated that while some prices were sharpened on a small set of items, it was not a material driver of the Q4 improvement, emphasizing the company's strong overall price-value proposition. Executive Jubran Tanious explained their inventory strategy involves backstocking seasonal items, which allows them to be opportunistic and ensure proper selection regardless of weather patterns.

Robert Drbul requested more details on the new store economics, including payback periods and investment returns, especially as the company accelerates its store opening cadence.

Answer

CFO Michael Maher detailed the new store economic model: stores typically lose money in year one, become profitable by year two, and reach maturity around year five, generating returns well in excess of the cost of capital. He emphasized that while this acceleration creates a near-term EBITDA margin headwind, it will become a powerful tailwind as these stores mature. Executive Jubran Tanious added that the accuracy of their predictive models for new store performance gives them confidence in accelerating the opening pipeline into 2026.

Robert Drbul asked about the flexibility within the company's 24% operating margin commitment given rising marketing spend, and humorously inquired if brand partner Travis Hunter would wear HEYDUDE shoes at the NFL draft.

Answer

CEO Andrew Rees affirmed the company's commitment to a 24% operating margin floor, explaining that current investments in DTC, talent, and marketing (planned at 10% of sales) are crucial for long-term growth. Regarding Travis Hunter, Rees emphasized the authenticity of the partnership, which is based on Hunter's genuine affinity for the brand, but made no predictions about his draft day attire.

Robert Drbul of Guggenheim Securities asked about the recent change in HEYDUDE's marketing investment strategy and the associated KPIs. He also sought clarification on whether the Crocs brand is expected to grow in North America in 2025.

Answer

CEO Andrew Rees detailed a significant strategic shift for HEYDUDE, pulling back on performance marketing to reinvest those funds into long-term brand-building with ambassadors like Sydney Sweeney and Jelly Roll. He acknowledged this hurt short-term revenue but is the right long-term decision. He also confirmed the current plan is for modest growth for the Crocs brand in North America in 2025, while reiterating that international remains the primary value driver.

Robert Drbul asked for an update on the North American reset, whether growth is expected in fiscal 2026, and if there are plans to increase marketing focus on key athletes like Juan Soto.

Answer

CEO Kevin Plank expressed confidence in the North American turnaround, stating the company is in a better position than it has been in years but that growth is necessary to unlock long-term profitability. He highlighted the new product engine and a goal of double-digit operating margins. Regarding marketing, he used the recent agile Notre Dame campaign as a model for future culturally relevant content, emphasizing the plan to better leverage their entire roster of elite athletes.

Robert Drbul of Guggenheim Securities asked for an update on the North American market reset, whether growth is expected in fiscal 2026, and how the additional marketing dollars in the second half will be allocated.

Answer

CEO Kevin Plank stated that while not providing FY26 guidance, the North American reset is progressing. He believes the consumer has affinity for the brand and the focus is on competing with science and design, not just price, supported by SKU rationalization. Regarding the incremental marketing spend, Plank explained the $25 million investment will be used for top-of-funnel brand building, with specific strategies for each region: bolstering an existing campaign in Europe, playing defense in APAC, and establishing the 'underdog' positioning in the U.S. around key moments like the NBA All-Star Game and Super Bowl.

Robert Drbul from Guggenheim Securities inquired about the evolution of Under Armour's marketing, the timeline for building confidence in it, and the specific contributions expected from new hire Eric Liedtke.

Answer

CEO Kevin Plank explained that Eric Liedtke's hiring is critical to strengthening the "story" component of their "product, story, and region" strategy, with a primary focus on being more aggressive in North America. Plank noted that the company's significant marketing spend has not been fully felt, and the plan is to shift the narrative from the gym to the authenticity of the playing field and "to and from" sportswear, targeting the 16- to 24-year-old varsity athlete.

Robert Drbul asked about the primary drivers behind Coach's recent success, whether that momentum is sustainable, and for an expanded view on the go-forward strategy for the Kate Spade brand.

Answer

Todd Kahn, CEO and Brand President of Coach, affirmed that Coach's growth is sustainable, attributing it to four pillars: a culture of innovation, deep consumer insights, successful Gen Z customer acquisition, and a sharp focus on core handbag and leather goods. CEO Joanne Crevoiserat added that for Kate Spade, the company is taking decisive action under new leadership by streamlining styles, reducing promotions, and accelerating marketing investments to reignite long-term growth, leveraging learnings from Coach's successful playbook.

Robert Drbul inquired about the status of the Capri acquisition and the company's strategic vision and capital allocation priorities in a potential deal-break scenario, including future M&A.

Answer

CEO Joanne Crevoiserat confirmed the appeal process for the Capri deal is ongoing. She stated that in a deal-break scenario, the immediate priority would be share repurchases, given the company's strong free cash flow and compelling valuation. She emphasized a commitment to their investment-grade rating and noted that while the platform can support more brands, no near-term M&A is expected if the deal fails, as the focus would be on strengthening Coach and returning Kate Spade to growth.

Robert Drbul inquired about the specifics of strategic pricing initiatives at Michael Kors and Versace, including the magnitude of AUR changes, and whether marketing plans for Kors involve new spending or reallocation.

Answer

CEO John Idol explained that Michael Kors' marketing will pivot back to its 'Jet Set' heritage, moving away from a recent strategy that alienated core customers. On pricing, he noted Kors' AUR was down high-single-digits and that prices are being realigned to historical levels to drive full-price sell-through, which should ultimately lift AURs. He cited new bags at lower price points ($258-$398) seeing strong results and mentioned that ready-to-wear prices, previously raised 30-40%, will be reduced.

Robert Drbul requested a quantification of the wholesale revenue pulled forward from Q4 into Q3 and asked for commentary on the significant 31% decline for the Vans brand in the APAC region.

Answer

EVP and CFO Paul Vogel did not provide a specific dollar amount but stated that about half of the wholesale outperformance was due to the pull-forward. President and CEO Bracken Darrell acknowledged the sharp decline for Vans in APAC, attributing it to a later but harder impact on the brand in the region. He emphasized a focus on a long-term fix, including resetting the store footprint, rather than chasing short-term results.

Robert Drbul asked for an update on brand performance in China and whether the current inventory-to-sales ratio is the new target for the company.

Answer

CEO Bracken Darrell noted that while China's macro environment is soft, The North Face continues to perform strongly there. Regarding inventory, he stated that while current levels are good, he believes there is room for further reduction over time through operational improvements and does not expect levels to increase.

Robert Drbul of Guggenheim asked about the drivers of improvement in shoe and handbag test locations, specifically brand assortment versus labor support, and inquired about inventory levels and the timeline for adjusting future order books.

Answer

CEO Antony Spring clarified that the improvement in shoe and handbag performance is predominantly driven by adding dedicated staff to assist customers, which gives him optimism for further gains when assortment changes are layered in. Regarding inventory, he stated that order books for 2025 are already positioned for flat to slightly down levels, and he does not foresee inventory being an issue heading into the new year.

Robert Drbul asked for details on what is driving the acceleration in the handbags and shoes categories and for insights into positive trends in women's apparel. He also requested more color on credit card trends, including delinquencies and cardholder behavior.

Answer

CEO Tony Spring attributed the 'green shoots' in ready-to-wear to an apparel cycle and newness from brands like Donna Karan and Karl Lagerfeld. For handbags and shoes, he cited the positive impact of staffing and assortment in the 'First 50' stores, noting strong performance from brands like COACH and Lauren by Ralph Lauren. COO and CFO Adrian Mitchell explained that credit losses are in line with expectations, though slightly lower payment rates are leading customers to carry revolving balances longer, which has benefited revenue.

Robert Drbul asked for details on the third-quarter outperformance, the key factors influencing the remainder of the year, the shipment timing for the new Converse license, and a breakdown of the updated EPS guidance.

Answer

Chairman and CEO Morris Goldfarb attributed the Q3 strength to owned brand growth, noting that minor logistical issues shifted some sales into Q4. He highlighted strong recent sales trends, the turnaround in the retail segment, and the successful launch of Donna Karan. For Converse, he expects initial shipments in Spring 2025 with a global push for Fall 2025. Executive Neal Nackman added that while the Q4 sales outlook was slightly reduced due to warm weather impacting outerwear, strong gross margins and prudent expense management drove the Q3 beat and support a raised full-year EPS forecast.

Robert Drbul asked for an update on the performance trajectory in North America and for commentary on inventory levels at retail partners given the heightened promotional activity in the region.

Answer

CEO Stefan Larsson reported that North America delivered its fifth consecutive quarter of double-digit EBIT margin, demonstrating strong execution despite a tough macro environment. He noted that while the holiday promotional season started earlier and was more intense, PVH is well-positioned with less inventory relative to sales and a fresher product mix, which mitigates promotional risk.

Robert Drbul requested an update on the progress being made in North America, particularly in relation to the profitability targets for the region.

Answer

CEO Stefan Larsson described North America as a key proof point for the PVH+ Plan, delivering high-quality growth and an 11.7% EBIT margin in Q2. CFO Zac Coughlin added that this was the fourth consecutive quarter of double-digit operating margins for the combined Calvin Klein and Tommy Hilfiger businesses in the region, driven by hundreds of basis points of improvement in both gross margin and SG&A efficiency.

Robert Drbul of Guggenheim Securities inquired about which strategic actions would most significantly impact customer traffic in the near term and into 2025, and also requested an update on the performance and trends within Kohl's credit card business.

Answer

CEO Tom Kingsbury explained that driving traffic involves showcasing value, targeting engaged customers with direct mail, and using social media to leverage the 4 million new rewards members. CFO Jill Timm added that the credit business is performing as expected, with the new co-brand card's financial benefits expected to materialize more significantly in Q4 and 2025.

Robert Drbul asked for an update on the core business, specifically how women's apparel and dress shops are performing, and for expectations on the promotional environment for the remainder of the year.

Answer

CEO Thomas Kingsbury stated that the promotional environment will be highly competitive, especially in the fourth quarter, due to financial pressure on the middle-income customer. He acknowledged that the women's business performance declined from Q1 to Q2, with intimate apparel being a significant drag. While dresses are a bright spot and are being expanded, the team is working intensively to turn around the broader women's category, which includes repositioning the juniors department to the front of the store.

Robert Drbul requested an update on the performance of the HomeSense banner across its various regions and asked about merchandise availability in the luxury 'Runway' section of Marmaxx.

Answer

CEO Ernie Herrman and CFO John Klinger both confirmed that the Home business, including HomeSense, is performing positively across all geographic regions. Regarding the Runway business, Ernie Herrman declined to comment on specific availability, stating it's a limited store base and not a bellwether for overall merchandise availability.

Robert Drbul requested data on the progress of brand awareness following the Olympics marketing campaign and asked for a more detailed breakdown of the pressures on Average Order Value (AOV) and the strategy to restore its growth.

Answer

Co-Founder and CEO Trina Spear positioned the Olympics campaign as a long-term brand-building success, citing over a billion media impressions and strong growth in brand search and 'teams' business leads. CFO Sarah Oughtred explained that AOV pressure stemmed from an accounting reclassification for international duties, higher discounts related to the growing 'teams' business, and targeted promotions to clear inventory.

Robert Drbul asked for an expansion on the drivers of the performance improvement at the Lee brand and for clarification on the outlook for product cost inflation in 2025, given the current environment of cost benefits.

Answer

CEO Scott Baxter attributed Lee's improvement to new leadership driving a refreshed strategy in design, product, and go-to-market, leading to 'green shoots' in the female business. CFO Joseph Alkire clarified that for 2025, they expect a neutral product cost environment overall. He explained that while they will anniversary lower costs in H1, leading to modest inflation in H2, this will be offset by structural mix benefits and savings from Project Jeanius.

Robert Drbul of Guggenheim Securities asked for details on the drivers of the Q3 revenue miss, the company's confidence in a Q4 revenue acceleration, and the rationale and timing behind the strategic evaluation of the Dockers brand.

Answer

CFO Harmit Singh attributed the revenue miss to foreign exchange impacts and underperformance in Mexico wholesale, China, and the Dockers brand. He expressed confidence in Q4 acceleration due to strong momentum in the U.S. and Europe, DTC strength, and the new Beyonce campaign. CEO Michelle Gass explained the Dockers evaluation is driven by a strategic pivot to focus on the Levi's brand and Beyond Yoga, noting Dockers' historical underperformance. She confirmed the process has begun with Bank of America engaged.

Robert Drbul asked about the performance of shrink, how California stores are performing versus the chain, and the current state of labor and wage pressures.

Answer

Group President and COO Michael Hartshorn stated that the retail theft environment remains 'very difficult' and that guidance assumes some shrink deterioration. Geographically, California outperformed the chain, Florida was in line, and Texas was slightly below. He described wages as 'relatively stable,' with increases mainly tied to statutory mandates, and noted that a stable DC labor market is improving productivity.