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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.

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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.

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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.

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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.

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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.

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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.

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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.

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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.

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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.

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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.

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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.

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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.

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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.

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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.

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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.

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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.

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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.

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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.

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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.

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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.

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