Financial Data and Key Metrics Changes - The company reported flat global revenue compared to the prior year, consistent with expectations, with adjusted gross margin expanding by 200 basis points to 47.7% driven by lower input costs and favorable mix [29][34][42] - Adjusted earnings per share (EPS) was $1.31, a 13% increase compared to the prior year, exceeding previous expectations [36][47] - Net debt was reported at $379 million, with a net leverage ratio of 0.9 times trailing twelve-month adjusted EBITDA, below the targeted range ahead of the Helly Hansen acquisition [38][39] Business Line Data and Key Metrics Changes - Wrangler's global revenue increased by 3%, with a notable 40% growth in the female segment, while Lee's global revenue decreased by 8% [15][31][32] - The company gained 70 basis points of market share in the men's and women's bottoms category during the first quarter [18][31] - The Lee brand is undergoing a repositioning strategy, with expectations for sequential improvement in revenue [18][19] Market Data and Key Metrics Changes - The U.S. market remains the largest outdoor apparel and footwear market, with significant growth opportunities identified for Helly Hansen [6][7] - International revenue for Wrangler increased by 4%, driven by a 6% growth in wholesale [31] - The company noted a resilient consumer environment, with improvements in point-of-sale (POS) trends observed in March and April [13][30] Company Strategy and Development Direction - The acquisition of Helly Hansen is expected to enhance revenue growth, earnings, and cash flow, with a focus on accelerating the brand's growth and improving operating margins [5][6][9] - The company aims to establish itself as an employer of choice in the industry, emphasizing talent retention and cultural fit with Helly Hansen [10][11] - Project Genius is expected to contribute to significant cost savings and operational efficiencies, with a full run rate anticipated by 2026 [14][45] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating macroeconomic volatility, highlighting operational agility and a strong supply chain as competitive advantages [12][41] - The outlook for 2025 includes expected revenue growth of 17% to 19%, with Helly Hansen contributing approximately $425 million [42][44] - Management remains cautious about retail inventory levels and consumer behavior, planning conservatively for the year [43][49] Other Important Information - The company has established a value creation framework with four pillars to drive growth and improve profitability [6][9] - Tariff impacts are being actively managed, with expectations to mitigate the effects within a 12 to 18-month period [49][52] - The company plans to continue its share repurchase program once acquisition-related debt is reduced [38][39] Q&A Session Summary Question: State of U.S. Consumer - Management described the U.S. consumer as resilient, with positive trends observed in March and April following a strong start to the year [56][58] Question: Guidance for 2Q and 2026 - The company expects organic revenue growth of 1% to 2% for the full year, with second-half growth driven by new programs and distribution expansion [61][62] Question: Lee Brand Transition - Management expressed confidence in the Lee brand's product quality and digital performance, anticipating a positive inflection in growth by 2026 [68][73] Question: Gross Margin Drivers - The significant gross margin outperformance was attributed to favorable product mix, lower product costs, and benefits from Project Genius [74][76] Question: Tariff Impact and Mitigation - The unmitigated tariff impact has been revised to approximately $50 million, with Mexico's tariff exemption contributing to the reduction [80][81] Question: Helly Hansen Contribution - Helly Hansen is expected to contribute approximately $425 million in revenue for the full year, with double-digit growth anticipated in the second half [24][87]

Financial Data and Key Metrics Changes - The company reported flat global revenue compared to the prior year, consistent with expectations, with adjusted gross margin expanding by 200 basis points to 47.7% due to lower input costs and favorable mix [28][33][41] - Adjusted earnings per share (EPS) was $1.20, including an $0.11 impact from acquisition-related stock-based compensation, while excluding this expense, adjusted EPS was $1.31, a 13% increase compared to the prior year [35][41] Business Line Data and Key Metrics Changes - Wrangler's global revenue increased by 3%, with a notable 40% growth in the female segment, while Lee's global revenue decreased by 8%, aligning with expectations [30][31][17] - The company gained 70 basis points of market share in the men's and women's bottoms business during the first quarter [17][30] Market Data and Key Metrics Changes - The U.S. market showed resilience, with revenue growth of 3% driven by a 2% increase in wholesale and a 14% increase in direct-to-consumer (DTC) sales [30][31] - International revenue for Wrangler increased by 4%, supported by a 6% growth in wholesale [31] Company Strategy and Development Direction - The acquisition of Helly Hansen is expected to enhance revenue growth, earnings, and cash flow, with a target contribution of approximately $425 million to full-year revenue [4][23] - The company aims to double Helly Hansen's operating margin from high single digits to mid-teens through gross margin expansion and SG&A benefits [7][25] Management's Comments on Operating Environment and Future Outlook - Management noted an increase in macro volatility but expressed confidence in the company's operational agility and supply chain strength to navigate challenges [11][12] - The outlook for 2025 includes expected revenue growth of 17% to 19%, with organic revenue growth projected at 1% to 2% excluding Helly Hansen [41][42] Other Important Information - The company has reduced SKUs by approximately 20% in the U.S. over the past twelve months, contributing to improved inventory health [34] - The net leverage ratio was reported at 0.9 times, below the targeted range, with expectations to return to under two times net leverage within twelve months post-acquisition [37] Q&A Session Summary Question: State of U.S. Consumer - Management characterized the U.S. consumer as resilient, noting a strong bounce back in March and April, with positive trends continuing into May [56][58] Question: Guidance for 2Q and 2026 - The company expects second half growth of approximately 3%, driven by new programs and distribution expansion, while organic growth for 2026 is anticipated to be positive [61][63] Question: Lee Brand Transition - Management expressed confidence in the Lee brand's product quality and digital engagement, with expectations for a positive inflection in growth by 2026 [70][73] Question: Gross Margin Drivers - The significant gross margin outperformance was attributed to a favorable mix, lower product costs, and benefits from Project Genius, with expectations for sustainability in the second half [74][76] Question: Tariff Impact - The unmitigated tariff impact for 2025 is estimated at $50 million, with mitigating actions expected to reduce this significantly [49][51] Question: Helly Hansen Contribution - Helly Hansen is expected to contribute approximately $425 million in revenue for the full year, with double-digit growth anticipated in the second half [23][87]

Financial Data and Key Metrics Changes - Q4 consolidated adjusted EBITDA was $248.6 million, down 5.2% from the prior year [37] - Fourth quarter adjusted net earnings were $45.2 million, down from $81.3 million in 2023 [39] - Full-year adjusted net earnings were $232.1 million, down from $279.4 million in 2023 [40] - Adjusted net earnings per share for Q4 were $0.06 versus $0.12 in the prior year [42] - Year-end GAAP debt was approximately $8.05 billion, with expectations to reduce it by an estimated $1.95 billion from the sale of the renewables business [45] Business Line Data and Key Metrics Changes - Regulated adjusted EBITDA was $234.4 million in Q4, up 2.4% from 2023 [38] - Full-year regulated adjusted EBITDA was $940.2 million, up 4.2% from 2023 [38] - The decline in consolidated adjusted EBITDA was primarily due to a lower dividend from Atlantica and certain corporate allocations [38] Market Data and Key Metrics Changes - The company completed the sale of its renewables business for approximately $2.1 billion, reflecting a significant transition to a pure-play regulated utility [22][26] - The rate base increased to approximately $7.8 billion from $7.2 billion a year earlier, driven by spending and invested capital [46] Company Strategy and Development Direction - The company aims to improve operational efficiency and customer service while focusing on its regulated utilities [22][25] - The leadership transition is expected to bring a renewed focus on creating sustainable value and improving returns on equity [11][17] - The company is committed to achieving its authorized return on equity of 9.2% and addressing regulatory lag [23][54] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to accelerate performance and earnings, particularly as a pure-play regulated utility [51][54] - The company views 2025 as a transition year with opportunities for growth above peer averages [52] - Management acknowledged challenges related to customer service and billing issues stemming from the implementation of a new IT platform [32][90] Other Important Information - The company has engaged a national firm to search for a permanent CFO following Darren Myers' departure [20] - The transition to a pure-play regulated utility is seen as a critical milestone in the company's strategic review [22] Q&A Session Summary Question: Optimization of the utility platform - Management highlighted efforts to reduce overhead and improve accountability within utilities as key focus areas for operational efficiency [58][59] Question: Long-term EPS growth potential - Management indicated that the targeted dividend payout ratio of 60% to 70% could be achieved in a few years, with potential for acceleration under new leadership [62][63] Question: Hydro sales process - Management confirmed plans to go to market within the half year for the Hydro sales process, emphasizing no dilutive transactions [69] Question: Rate base growth and adjustments - Management clarified that the increase in rate base was primarily due to IT platform investments, with no significant further adjustments expected [72] Question: Transition expenses related to renewables - Management noted that some costs related to exiting the renewables business would persist into 2025 but are not expected to be ongoing [76] Question: Customer service technology platform issues - Management acknowledged the challenges faced with the new SAP implementation but expressed confidence in future improvements [90][91] Question: Key areas of focus for the new CEO - The new CEO emphasized aligning stakeholders and focusing on areas with quick opportunities for productive capital deployment [96][97] Question: Regulatory strategy and ROE gap - Management discussed the importance of managing cost structures internally to bridge the gap between realized and allowed ROEs [112][114]