Samuel Poser

Samuel Poser asked about inventory plans for Q1, specifically if the company was pulling forward inventory ahead of potential tariffs. He also requested more detail on the HOKA wholesale expansion strategy and inquired about any new, unannounced HOKA models in the pipeline, such as those with different cushioning profiles.

Answer

CFO Steve Fasching confirmed that Q1 inventory levels will be intentionally higher year-over-year, partly to get ahead of potential tariffs and also to manage a distribution center transition in Europe. CEO Stefano Caroti described the wholesale expansion as systematic and focused on door productivity, mentioning partners like the JD Group. He also confirmed a strong product pipeline for Spring/Summer 2026, including lower-profile shoe versions.

Samuel Poser requested specific Q3 wholesale revenue figures by brand, questioned the expectation for normalized Q4 markdowns given tight inventory, and asked for specific basis point impacts on Q4 gross margin from freight, FX, and promotions.

Answer

Executive Erinn Kohler provided the requested wholesale revenue figures. CFO Steve Fasching explained that Q4 markdown expectations are driven by model changeovers (like Clifton 9), seasonal inventory closeouts, and tough year-over-year comparisons. He quantified the anticipated Q4 gross margin headwinds as approximately 150 basis points from freight, 50 basis points from FX, and up to 100 basis points from promotions, with offsetting mix benefits under 50 basis points.

Samuel Poser from Williams Trading, LLC requested specific data points, including DTC sales by brand, U.S. sales for HOKA and UGG, a breakdown of gross margin headwinds from freight versus promotions, and the potential markdown impact from product updates. He also asked about tariffs.

Answer

Executive Erinn Kohler provided global wholesale and distributor revenue by brand. CFO Steven Fasching quantified the Q2 freight headwind at approximately 70 basis points but declined to provide specific markdown or U.S. sales breakdowns. He noted that potential future tariffs are not factored into current guidance.

Samuel Poser of Williams Trading asked if recent sales strength could be a pull-forward of demand from consumers aware of tariffs, the timeline for tariff headwinds to clear, and why sourcing from Mexico wasn't increasing more significantly.

Answer

CEO John Hazen stated that data analysis shows no evidence of demand pull-forward from customers. Regarding the tariff timeline, he confirmed that due to inventory turns of less than 2x a year, the impact will extend into the next fiscal year. On sourcing, Hazen explained that while most leather-soled boots are already from Mexico, there is an immediate opportunity to move some rubber-soled boot production back there, and the team is actively exploring it.

Sam Poser asked about the exclusive brand penetration rate, trends with new versus returning customers, and whether the strength in branded denim impacted exclusive brand mix.

Answer

Chief Digital Officer John Hazen stated exclusive brand penetration was down 50 bps in Q2 against a tough comparison but is guided to grow 200 bps in Q3 and Q4. Former CEO Jim Conroy noted customer count grew 14% to 8.9 million, with strong re-engagement from female shoppers. Hazen added that exclusive brand denim is also growing well.

Samuel Poser questioned whether the company's outlook was tempered by potential tariff impacts on consumer demand and how the 'relative scarcity' model provides confidence in navigating this.

Answer

President of Americas David Kahan explained that the company's 'relative scarcity' model ensures a healthy stock-to-sales balance. He stated that while they are mindful of consumer pressures, they see a flight to quality and high-demand brands like Birkenstock and have not observed any negative impact on demand. CFO Ivica Krolo also reiterated the path towards a 60% gross margin and continued SG&A investments.

Samuel Poser of Williams Trading questioned how D2C could outgrow wholesale for the full year given Q2 is a large wholesale sell-in quarter, and asked if D2C growth would be heavily weighted to the second half. He also followed up on the implications for Q2 gross margin.

Answer

CEO Oliver Reichert confirmed the general cadence, stating the first half of the year is typically wholesale-heavy while the second half is more D2C-heavy, which will drive the balanced full-year growth. VP, Global Finance Alexander Hoff agreed that this channel mix seasonality means Q2 gross margin, while potentially up year-over-year, would be lower than Q1 and the full-year average.

Samuel Poser questioned if the B2C digital penetration in the Americas is mature, suggesting future growth would rely on new stores and international expansion. He also asked about the long-term global owned-store target.

Answer

David Kahan, President of the Americas, stated the company will increase its physical door count by 50% in fiscal 2025. He suggested that a 40% digital penetration is largely 'optimized' and that new physical stores will provide purely incremental B2C growth. Megan Kulick added that while new stores will drive growth in the U.S., the APAC region is also seeing very strong B2C growth that will be a key contributor.

Samuel Poser from Williams Trading questioned the composition of inventory, asking if the change in units versus dollars reflects a successful shift towards higher-priced, premium products, both in Q4 and within the Q1 guidance.

Answer

CFO David Bergman confirmed inventory is being managed tightly with minimal excess, and noted that cost per unit is expected to rise. CEO Kevin Plank corrected that inventory was down 1% (not up) and emphasized that a key metric he tracks is Average Unit Retail (AUR). Plank reiterated the core strategy is to 'sell so much more of so much less at a much higher full price,' underscoring that improving pricing power is a primary focus.

Samuel Poser requested more detail on the Q4 order book headwind and the nature of new account interest. He also commented on CEO Kevin Plank's increased patience and asked about the potential impact of a struggling moderate-tier retail partner.

Answer

CFO David Bergman confirmed the softer Q4 order book and noted additional pressures from foreign currency and challenges in APAC. CEO Kevin Plank described the new account interest as coming from 'boutique players' excited by the upcoming Fall '25 product line. On distribution, Plank stressed the importance of a balanced 'good, better, best' strategy, indicating a focus on elevating the brand's presence in premium channels while maintaining a broad reach.

Samuel Poser from Williams Trading asked about the timing of shifted marketing spend and how CEO Kevin Plank is balancing patience with speed in the North American turnaround.

Answer

CFO Dave Bergman clarified that marketing spend is being shifted to the second half (Q3 and Q4) to support key selling seasons like holiday, not just to set up for FY26. CEO Kevin Plank acknowledged the need for both patience and urgency, stating that while the major product inflection is targeted for Fall '25, progress will be constant and visible sooner. He emphasized that many issues are self-inflicted and fixable, and he is confident in the team and assets they have to play with.

Samuel Poser requested a breakdown of the HEYDUDE direct-to-consumer business and asked if the company is planning to be more conservative with inventory in the back half of the year, even if it means sacrificing some unit sales.

Answer

CEO Andrew Rees did not provide a specific channel breakout for HEYDUDE's DTC business but highlighted its components: HEYDUDE.com, Amazon, and outlet stores. He confirmed that the company's strategy is to prioritize brand health over unit volume, stating they would rather cancel orders or work with retailers to reduce inventory than force product into an uncertain market.

Samuel Poser of Williams Trading pressed for an explanation of HEYDUDE's underperformance, asking what controllable factors went wrong, such as growing too fast and shipping too much product, and what specific actions beyond marketing are being taken to reignite sales.

Answer

CEO Andrew Rees candidly acknowledged that, in retrospect, the company grew HEYDUDE too fast and shipped too much product into the channel in the 2022-2023 timeframe. He also admitted initial marketing was ineffective and integration took longer than hoped. He outlined a multi-pronged recovery plan including a marketing pivot, proactive wholesale inventory management, building out a premium outlet channel, and laying the groundwork for international expansion, reaffirming his confidence in the brand's future.

Samuel Poser questioned the company's demand planning and inventory strategy for the second half of the year amidst potential consumer slowdowns. He also asked about the promotional activity at Merrell and requested a breakdown of the international business by units versus dollars.

Answer

CEO Christopher Hufnagel explained that a new integrated business planning group is surgically managing inventory, being cautious in some areas while remaining bullish where momentum exists. He acknowledged the need to reduce promotions at Merrell as a transition that takes time. CFO Taryn Miller confirmed they have pulled back on inventory vs. original plans for H2. For international data, Executive Alex Wiseman directed the question to the investor presentation.

Samuel Poser asked about the company's demand planning for the second half of the year, specifically if it was reducing supply in anticipation of weaker consumer demand. He also questioned the high level of promotional emails from Merrell and asked for a unit vs. dollar breakdown of the international business.

Answer

CEO Christopher Hufnagel explained that a new integrated business planning group is managing inventory cautiously but will remain bullish where brand momentum is strong. He acknowledged the need to become less promotional but stated it's a gradual transition. Executive Alex Wiseman directed him to the investor presentation for details on the international business mix.

Samuel Poser asked for examples of Merrell's specialty independent retailers, the financial impact of the 53rd week, and details on Sweaty Betty's store count and U.S. expansion plans. He also inquired about the gender sales split for Saucony.

Answer

CEO Chris Hufnagel described Merrell's retail strategy as re-engaging specialty outdoor accounts while expanding into new lifestyle distribution like malls. CFO Taryn Miller clarified the 53rd week occurs in fiscal 2025, adding about 50 basis points to growth with minimal profit. Hufnagel stated Sweaty Betty has around 100 stores, with 10 new UK locations planned and no immediate plans for further U.S. expansion beyond two test stores.

Samuel Poser followed up on the tariff discussion, asking about the percentage of international unit sales and whether converting distributors to subsidiaries was being considered. He also asked about the specific expectations for the new President of the Active Group, Susie Kuhn.

Answer

CEO Christopher Hufnagel stated that international units are approaching 60% but converting distributors is not currently being contemplated. He explained that Susie Kuhn was hired to accelerate growth at Merrell and Saucony by leveraging her extensive industry experience in commercialization, go-to-market strategy, and global markets to capitalize on opportunities.

Samuel Poser sought clarification on a comment about returning to "profitable growth," asked about the inventory from the Kurt Geiger acquisition, Kurt Geiger's sourcing mix, the timeline for margin recovery, and the strategy for the mass-market private label business under tariff pressure.

Answer

CEO Ed Rosenfeld clarified "return to profitable growth" means profits are not expected to grow in the near term but will long-term; the company is not expecting a loss. He stated Kurt Geiger's sourcing is ~80% from China, a top priority to diversify. He declined to give a timeline for margin recovery due to uncertainty but expressed confidence in managing the private label business, seeing it as a potential opportunity for share gain.

Samuel Poser of Williams Trading, LLC asked about the anticipated interest expense for 2025, the revenue impact from converting distributors to JVs, potential synergies with Kurt Geiger, and how production shifts would affect speed-to-market and Kurt Geiger's own operational timeline.

Answer

Chairman and CEO Edward Rosenfeld and CFO Zine Mazouzi addressed the questions. Rosenfeld indicated the new debt for the Kurt Geiger deal would be at SOFR plus 200 basis points. The JV conversions are expected to add about $25 million in revenue, though this is offset by currency headwinds. Synergies include leveraging Steve Madden's network for Kurt Geiger's international expansion. Regarding logistics, they acknowledged slightly longer transit times from new production countries but stated they plan around it to maintain their critical speed-to-market model, while noting Kurt Geiger's business has different speed requirements.

Samuel Poser of Williams Trading asked if inventory levels would be high at the end of Q2 from pulling forward orders to avoid tariffs. He also inquired about a potential shortage of China-sourced kids' shoes, the evolution of demand planning since COVID, and the gross margin impact of prioritizing gross profit dollars over percentage.

Answer

Executive David Weinberg stated that while they try to move deliveries up, a significant pull-forward of production is difficult in the current environment. John Vandemore clarified that it's too early to predict a shortage in kids' shoes, only that there's a known manufacturing differential. Regarding margins, Vandemore confirmed that protecting gross profit dollars would mathematically result in some gross margin percentage erosion, which the company would address over the long term.

Samuel Poser of Williams Trading pressed for clarity on the Q1 EBIT margin to better model FX impacts, the severity of the China headwind, and potential sales constraints in Europe.

Answer

John Vandemore (executive) declined to give a specific Q1 EBIT margin but indicated SG&A deleverage of 150-250 bps was possible in Q1, with opportunity to outperform. He confirmed FX is the biggest overall change to the outlook and that China's Q4 performance was worse than expected. However, he stressed the business is performing exceptionally well outside of China. David Weinberg (executive) stated there were no sales constraints in Europe, as inventory for Q1 would arrive in time despite transit delays.

Samuel Poser of Williams Trading asked for a more detailed timeline for the 50-75 store rebanners, questioning their distribution across quarters and the resulting impact on comparable sales during key back-to-school and holiday periods. He also inquired about the historical sales split for back-to-school between Q2 and Q3 and sought clarification on Q1 gross margin expectations, particularly concerning deleverage.

Answer

CEO Mark Worden clarified the rebannering plan, stating roughly half of the conversions are slated for before the back-to-school season and half after, intentionally avoiding peak shopping times. He agreed that comps should strengthen in the back half of the year as more Shoe Station stores come online. He also estimated the back-to-school sales split is roughly half between Q2 and Q3. CFO Patrick Edwards added that while the full-year gross margin is expected to be above 35%, Q1 will likely see more deleverage due to lower planned sales and the initial investment costs of the rebannering strategy.

Samuel Poser from Williams Trading sought to verify the full-year sales guidance for the Rogan's acquisition, questioned the year-end inventory outlook, and asked about the potential impact of tariffs on future receipts and the company's sourcing exposure to China.

Answer

CEO Mark Worden confirmed the Rogan's sales guidance remains over $80 million. CFO Patrick Edwards explained that year-end inventory levels will be slightly higher than previously planned to support the 25-store rebannering initiative in early 2025. Chief Merchandising Officer Carl Scibetta addressed tariffs, stating the company is monitoring the situation closely and will manage pricing to maintain value. He estimated that less than 50% of total products are sourced from China, considering the athletic and non-athletic mix.

Samuel Poser of Williams Trading, LLC questioned the timing of SG&A pressure in Q4 versus Q3, the strategy behind assortment narrowing, the use of digital marketing in non-event periods, and the expected comp sales cadence between Q3 and Q4.

Answer

Executive Steve Alexander explained Q4 would see more apparent SG&A pressure due to the timing of advertising spend. Chief Merchandising Officer Carl Scibetta confirmed assortments are narrower to focus on key items. President and CEO Mark Worden noted that while digital marketing helps during non-event periods, consumer spending naturally drops post-back-to-school. He clarified that Q3 and Q4 comp growth are expected to be similar, not with Q4 accelerating significantly.