Summary of Caleres Conference Call Company Overview - **Company**: Caleres - **Industry**: Footwear - **Key Executives Present**: Jay Schmidt (President and CEO), Jack Calandra (CFO), Liz Dunn (SVP of Corporate Development and Strategic Communications) [1][2] Key Financial Metrics - **Revenue**: Direct-to-consumer sales account for over 70% of total revenue - **Brand Portfolio Segment**: Represents 45% of total revenue - **International Operations**: Active in 68 countries with significant growth opportunities [3][4] Q2 Accomplishments - **Performance**: Strong performance in lead brands and direct-to-consumer channels, with double-digit growth in international markets - **Famous Footwear**: Elevated brands performed well during the back-to-school season [3][4] Strategic Initiatives - **Sourcing Migration**: Reduced sourcing from China to below 15% by the second half of the year - **Cost Savings**: Achieved $15 million in annualized structural savings, with half expected in the second half of the year - **Acquisition**: Completed the acquisition of Stuart Weitzman in August, focusing on integration and transition [4][5][8] Second Half Outlook - **Guidance**: Annual guidance suspended due to tariff uncertainties; however, Q3 expectations include a +1% comp in August, with low single-digit declines anticipated in September and October - **Gross Margin**: Expected to decline by approximately 240 basis points in Q3 due to tariffs, with improvement anticipated in Q4 as mitigating actions take effect [5][6][7] Market Trends - **Footwear Market**: Driven by newness and brand demand; consumers favor authentic and differentiated brands - **Lead Brands**: Continued strong performance from Sam Edelman, Allen Edmonds, Naturalizer, and Vionic, with ongoing investments in marketing and product development [11][14][17] Brand Portfolio Insights - **Premium Brands**: Strong growth in licensed brands like Vince and Veronica Beard, with Stuart Weitzman expected to enhance the portfolio - **Direct-to-Consumer**: Digital sales represent 30% of the brand portfolio, with a focus on omnichannel strategies [20][26][28] Inventory Management - **Famous Footwear**: Well-managed inventory with a tighter relationship between inventory levels and sales; challenges in the Brand Portfolio segment due to high initial inventory levels [24][25] Competitive Advantages - **Kids' Business**: Represents over 20% of total sales, with growth opportunities through stronger brand alignment - **Store Base**: Approximately 830 stores expected by year-end, with a focus on optimizing store performance and expanding the FLAIR format [36][38] Tariff Strategy - **Mitigation Actions**: Multi-pronged strategy to address tariff impacts, including sourcing adjustments, factory negotiations, and selective price increases - **Tariff Impact**: Anticipated gross margin impact from tariffs, with efforts to offset through SG&A opportunities [41][42] Conclusion - **Future Outlook**: Caleres is focused on leveraging its brand portfolio, optimizing operations, and navigating market challenges while maintaining a strong consumer focus [42]

Core Insights - Costco Wholesale exceeded fourth-quarter revenue and profit expectations as consumers sought lower-priced essentials amid inflation and a weakening labor market [1][5] - The company's strategy of limited product categories and local sourcing has helped mitigate the impact of tariffs from the Trump administration's trade policies [2] - Strong sales of private-label brands and maintaining lower prices on key items contributed positively to Costco's performance [3] Financial Performance - Costco reported revenue of $86.16 billion, surpassing analysts' average estimate of $86.06 billion [5] - Same-store sales, excluding gas, increased by 6.4%, slightly below the estimated 6.44% [5] - Earnings per share, excluding items, were $5.87, exceeding the analysts' average estimate of $5.80 [5] Membership and Pricing Strategy - The company is reinvesting part of the increased membership fees into sharper pricing for members, benefiting both members and shareholders [4] - Earnings from membership fees rose by 14% to $1.72 billion for the quarter ended August 31 [4]

Core Insights - Build-A-Bear Workshop is successfully targeting adults, leveraging nostalgia to diversify its portfolio and enhance customer engagement [3][12][14] - The company reported record-breaking revenue of $252.6 million in the first half of fiscal 2025, marking a nearly 12% increase year-over-year [3][4] - Build-A-Bear's stock has risen approximately 60% year-to-date, nearing a $1 billion market cap, despite challenges faced by other retailers [4][10] Financial Performance - The company raised its outlook following effective tariff mitigation strategies, including increased inventory management [4][8] - Build-A-Bear's diverse revenue streams, including new products and demographics, have contributed to its financial resilience [10][11] Market Position and Strategy - The company has expanded beyond traditional retail locations, establishing a presence in cruise ships, amusement parks, and hospitality [5][6] - Build-A-Bear's ability to discreetly raise prices through constant product innovation has helped mitigate tariff impacts [10][11] Consumer Engagement - A recent survey indicated that 92% of adults still own their childhood teddy bears, highlighting the brand's strong nostalgic appeal [14][16] - The experiential nature of Build-A-Bear's offerings fosters deep emotional connections with consumers, enhancing brand loyalty [16][17] Future Outlook - Analysts suggest that Build-A-Bear's international expansion presents significant growth opportunities, with high returns on capital [11] - The brand's focus on personalization and creating memorable experiences positions it well in a competitive retail landscape [9][18]

Varex Imaging Conference Summary Company Overview - Varex Imaging is a leading provider of X-ray components, with over 50 years in the industry and a focus on innovation and scale. The company operates two business segments: medical (approximately 70% of revenue) and industrial (approximately 30% of revenue) [2][3]. Key Business Segments - **Medical Segment**: Dominated by X-ray tubes and detectors, with a significant focus on digital detectors since the late 1990s. The company plans to enter the CT detector market using photon counting technology acquired from Direct Conversion in 2018 [2][3]. - **Industrial Segment**: Includes components for cargo inspection systems, which have shown steady growth despite some destocking issues. The company has received over $50 million in orders for new cargo systems [16][17]. Tariff Impact and Mitigation Strategies - Tariffs have significantly impacted Varex's business, with an estimated 100 basis points gross margin impact even after mitigation efforts [4][6]. - The company has successfully passed some tariff-related costs to customers and is implementing operational strategies, including establishing bonded warehouses and shifting supply chains to lower tariff regions [5][4]. - Two factories in India are being developed to produce X-ray components, with the first factory expected to begin shipping detectors soon [8][9]. China Market Update - The business in China has stabilized after previous impacts from an anti-corruption campaign and price dumping investigations. The company anticipates growth in the upcoming fiscal year due to government initiatives to upgrade healthcare infrastructure [10][11][12][13]. - The Chinese government's multi-year initiative to improve rural hospital infrastructure is expected to drive demand for mid-end CT systems [11][13]. Inventory Levels and Purchasing Patterns - The destocking trend among customers, particularly in the medical segment, is largely behind Varex, with a return to regular purchasing patterns [15]. Industrial Segment Growth - The industrial segment has continued to grow, driven by demand for security and cargo inspection systems. The company is seeing a push for more imaging due to safety concerns and regulatory pressures [16][17]. Photon Counting Technology - Varex is developing photon counting technology, which allows for significant dosage reduction and faster X-ray imaging. The company is working with two customers to customize products for the CT market [28][29][30]. - The industrial application of photon counting has already generated about $20 million in annual business, with ongoing customer evaluations [30]. Financial Health and Debt Management - Varex has improved its financial health by paying down a $200 million convertible loan and focusing on deleveraging. The company aims to reduce long-term debt from $370 million to around $325 million [41][43]. - The company expects growth in fiscal 2026, driven by new opportunities in cargo systems, the operationalization of the Indian factory, and early revenue from photon counting technology [45][46]. Conclusion - Varex Imaging is positioned for growth in the coming years, with stabilization in key markets, successful mitigation of tariff impacts, and promising developments in new technologies. The company remains cautious about geopolitical uncertainties but is optimistic about its growth trajectory [46].

Core Insights - GSK and Eli Lilly are expanding their manufacturing and operational capabilities in the United States [1] Group 1 - GSK has announced plans to enhance its manufacturing operations in America [1] - Eli Lilly is also set to increase its operational footprint in the U.S. [1]

Financial Data and Key Metrics Changes - Total company net sales for Q2 decreased by 1.3% to $73.2 million compared to $74.2 million in Q2 of fiscal 2024 [10] - Gross profit for Q2 was $36.9 million, representing 50.4% of net sales, an increase from $35.1 million or 47.4% of net sales in the same period last year [11] - Net income for Q2 was $12.1 million, or $0.93 per share, compared to $0.6 million, or $0.05 per share in Q2 of the previous year [15] - Adjusted EBITDA for Q2 was $6.7 million, up from $2.7 million in the prior year [15] Business Line Data and Key Metrics Changes - Direct-to-consumer (DTC) segment increased by 5.5%, with both e-commerce and store channels contributing to growth [10] - Wholesale segment saw a decline of 5.1% due to delays in shipments caused by tariff mitigation strategies [10] Market Data and Key Metrics Changes - The company successfully elongated its full-price selling season from spring, which positively impacted gross margin performance [5] - The men's business showed solid performance, particularly in knits and bottoms, while women's wovens and knits also performed well [6] Company Strategy and Development Direction - The company is focused on reinvesting in the business, particularly in top-of-funnel marketing, after successfully navigating tariff challenges [8] - Plans to open new stores in strategic locations, such as Nashville and Sacramento, to enhance geographic coverage and support e-commerce [6] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's strategic positioning despite a dynamic environment, emphasizing strong fundamentals and growth trajectory [9] - The company anticipates net sales for Q3 to be flat to up low single digits compared to the prior year, with cautious consumer sentiment expected [17] Other Important Information - The company has reduced its long-term debt balance to $31.1 million, down from $54.4 million in the prior year [14] - Inventory at the end of Q2 was $76.7 million, an increase from $66.3 million in the same period last year, driven by higher inventory carrying value due to tariffs [15][16] Q&A Session Summary Question: How will the company maximize collection flow next year based on Q2 learnings? - Management noted the need to analyze the benefits of stretching out the spring selling season and will make decisions based on longer-term data [22][23] Question: What is the company's strategy for maintaining wholesale quality and share? - Management highlighted their nimbleness and strong team continuity as competitive advantages in maintaining quality and responding to market changes [24][25] Question: How does the company view price elasticity among its customer base? - Management stated that they carefully evaluate price changes on a style-by-style basis, ensuring value remains intact for both affluent and aspirational customers [25][27] Question: What is the current percentage of products sourced from China? - Management indicated progress in reducing exposure to China, targeting a cap of 25% for any one country, with expectations to achieve this by the holiday season [34][35] Question: What are the trends in freight costs and shipping delays? - Management explained that delays were intentional to manage inventory flow and that freight costs are not expected to see significant increases in the back half of the year [37][40] Question: How many store locations were open in Q2 compared to last year? - Management confirmed there were 40 full-price stores and 14 outlets last year, with new openings planned for Nashville and Sacramento [41][43]

Financial Data and Key Metrics Changes - Total company net sales for Q2 decreased 1.3% to $73.2 million compared to $74.2 million in Q2 of fiscal 2024 [10] - Gross profit was $36.9 million, or 50.4% of net sales, compared to $35.1 million, or 47.4% of net sales in the same period last year [11] - Net income for Q2 was $12.1 million, or income per share of $0.93, compared to net income of $0.6 million, or income per share of $0.05 in Q2 of last year [15] Business Line Data and Key Metrics Changes - Direct-to-consumer segment increased 5.5%, with both e-commerce and store channels contributing to growth [10] - Wholesale segment declined by 5.1% due to delays in shipments caused by tariff mitigation strategies [10] Market Data and Key Metrics Changes - The company experienced strong performance in women's wovens and knits, as well as in the buy-now, wear-now bottoms category [5] - Men's business showed solid results, particularly in knits and bottoms assortments [6] Company Strategy and Development Direction - The company is focused on mitigating tariff impacts and has successfully reduced the estimated impact from incremental tariffs by approximately 50% for the second half of the year [7] - Plans to reinvest in the business include restoring top-of-funnel marketing dollars and exploring longer-term growth opportunities [8] Management's Comments on Operating Environment and Future Outlook - Management remains cautiously optimistic about the growth trajectory, despite the dynamic environment and ongoing tariff pressures [9] - The company anticipates net sales for Q3 to be approximately flat to up low single digits compared to the prior year period [16] Other Important Information - The company’s long-term debt balance was $31.1 million, a reduction of $23.3 million compared to the prior year [14] - Net inventory increased to $76.7 million, driven by higher inventory carrying value due to tariffs [15] Q&A Session Summary Question: How will the company flow its collections next year based on Q2 learnings? - Management indicated that they will analyze the benefits of stretching out spring collections and make decisions based on longer-term data [22][23] Question: What is the company's strategy for maintaining wholesale quality and share? - Management emphasized their nimbleness and ability to respond quickly as a competitive advantage, allowing them to maintain quality and potentially gain market share [24][25] Question: How does the company view price elasticity among its customer base? - Management stated that they carefully evaluate price changes on a style-by-style basis, ensuring that value remains at the new price points [26][27] Question: What impact have tariff issues had on new categories or accessories? - Management noted that licensing partners are also navigating similar challenges, and the company is focused on ensuring that price changes make sense for consumers [28][30] Question: What percentage of products are currently sourced from China? - Management reported that they are targeting a cap of 25% for sourcing from any one country and are progressing well in reducing exposure to China [34][35] Question: What are the trends in freight costs for the back half of the year? - Management indicated that they do not foresee a significant uptick in overall freight costs and expect normalization as they manage inventory around the holiday season [38][40] Question: How many store locations were open in the quarter compared to last year? - Management confirmed that they opened a Nashville location and have a Sacramento location slated for October, with no additional openings planned for the remainder of the year [41][42]

Core Viewpoint - Tapestry aims to fully mitigate the impact of U.S. tariffs by fiscal year 2028 while planning a $3 billion share buyback during this period [1][2] Group 1: Tariff Impact - The company anticipates tariffs will cost approximately $160 million in fiscal 2026, particularly affecting the Kate Spade brand [2] - Tapestry's CFO stated that gross and operating margins are expected to grow in fiscal 2027 and beyond despite tariff impacts [2] Group 2: Brand Performance - Coach, Tapestry's largest revenue driver, is projected to boost sales to around $10 billion in the long term [3] - Kate Spade is expected to return to profitable topline growth by fiscal 2027 [3] Group 3: Financial Forecast - Tapestry forecasts full-year revenue growth in the mid-single digits for fiscal 2027 and 2028, with adjusted profit per share expected to grow by low double-digits each year [4] - The stock has increased by 60% so far this year, although it experienced a decline of up to 3.4% in afternoon trading [4]

Financial Data and Key Metrics Changes - The Toro Company reported total consolidated net sales of $1.13 billion for Q3 2025, a decrease of 2.2% year over year, with half of this decline attributed to prior year strategic divestitures of noncore assets [6][13][14] - Adjusted earnings per share (EPS) for the quarter were $1.24, exceeding internal expectations and up from $0.60 in the same period last year [5][13] - Reported EPS was $0.54, which included a non-cash impairment charge of $0.62 per diluted share, totaling $81 million pretax [13][14] - The company's gross margins were reported at 33.7% and adjusted gross margins at 34.4%, compared to 34.8% and 35.4% respectively in the same period last year [17] Business Line Data and Key Metrics Changes - Professional segment net sales were $931 million, up 6% year over year, driven by higher shipments in underground construction and golf and grounds products [14][15] - Professional segment earnings increased by 20% year over year to $199 million, resulting in an earnings margin of 21.3%, up from 18.8% in the prior year [14][15] - Residential segment net sales were $193 million, down 28% year over year, primarily due to lower shipments as homeowners deferred big-ticket purchases [15][16] - Residential segment earnings for the quarter were $4 million, or 1.9% of sales, compared to $33 million, or 12.2% of sales last year [16] Market Data and Key Metrics Changes - The company noted that channel inventory is clearing meaningfully, particularly in the residential segment, setting up a cleaner foundation for the 2026 selling season [7][15] - The professional segment continues to capture market share in areas experiencing structural growth, particularly in golf and infrastructure [9][22] Company Strategy and Development Direction - The Toro Company is focused on leveraging technology investments and operational excellence to drive value for customers and shareholders [5][6] - The company is intensifying operational improvements to control costs and identify additional efficiency opportunities, with a goal of delivering at least $100 million in annualized cost savings by 2027 [8][20] - The company is strategically investing in value-generating technology and innovation while optimizing global supply chain operations [24][25] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's trajectory despite headwinds in the residential segment, citing strong positioning in the professional segment and ongoing demand for innovative products [5][6] - The company anticipates continued pressure from homeowner demand and channel caution affecting residential results, but expects professional segment revenue to be up slightly year over year [19][20] - Full year guidance indicates total company net sales expected to be at the low end of the range of flat to down 3%, with adjusted diluted EPS projected at about $4.15 [20][21] Other Important Information - The company has invested $90 million in share repurchases year to date, reflecting confidence in cash generation and commitment to returning value to shareholders [19] - The AMP productivity program has delivered $75 million in annualized cost savings to date, with expectations to exceed the initial target of $100 million by 2027 [8][64] Q&A Session Summary Question: Impact of consumer challenges on professional segment - Management noted that the professional landscape contractor business grew in Q3, driven by strong demand from contractors despite muted homeowner demand [30][31] Question: Sustainability of professional segment margins - Management confirmed that the strong margins in the professional segment were supported by a favorable mix and the AMP program, which contributed to cost savings [32][34][35] Question: Residential market outlook with potential interest rate cuts - Management speculated that interest rate cuts could positively influence consumer confidence and spending on big-ticket items, but emphasized the need for sustained improvements [36] Question: Market share and growth prospects with major retailers - Management stated that the company has maintained market share despite market volatility and is optimistic about growth prospects with key retailers like Lowe's and Tractor Supply [42][43] Question: Expectations for residential margins - Management expects residential margins to be lower year over year, with a typical range of 8% to 10%, but does not anticipate reaching that range in fiscal 2025 [48] Question: Year-end backlog and professional growth prospects - Management indicated that year-end backlog is expected to be reduced as the company normalizes order cycles, with continued good prospects for professional growth [51][53] Question: Tariff impacts and mitigation strategies - Management discussed successful tariff mitigation efforts and the expectation to maintain margins through productivity measures and careful pricing [65][72] Question: Inventory levels and alignment with demand - Management acknowledged that while progress has been made in aligning inventory levels with demand, there is still work to be done, particularly in the underground segment [102][110]

Financial Data and Key Metrics Changes - The company reported second quarter 2025 net sales of $131.7 million, a decline of 7% year-over-year, with gross margin expanding by 240 basis points to 54.7% [19][21] - Adjusted EBITDA increased by $1.5 million to $12 million, representing 9.1% of sales [19][21] - SG&A expenses were $68.8 million, down $5.2 million or 7.1% from the previous year, improving as a percentage of sales to 52.2% [22][21] Business Line Data and Key Metrics Changes - Direct channel sales, excluding wholesale, decreased by 18%, primarily due to a decline in web traffic, although average order value increased [20] - Retail store sales increased by 5.3%, driven by improved traffic trends and higher average order values [20][12] - Men's sales declined by 8%, while women's sales fell by 11.3%, but AKHG grew by 11.4% across both men's and women's categories [20] Market Data and Key Metrics Changes - The company experienced a 12% reduction in ending inventory compared to the prior year, with inventory levels currently 6% lower than last year [23][24] - The inventory mix included 78% in current products and 22% in clearance goods, with clearance inventory reduced to 16% of the total as of September [25] Company Strategy and Development Direction - The company is focused on a turnaround strategy that includes resetting promotional cadence, improving inventory management, and strengthening operational execution [18][19] - Plans to reduce SKU and style counts by over 20% for the upcoming seasons to create a more focused assortment [16][41] - The company aims to achieve $10 million in cost savings for fiscal 2025 through headcount reductions and controlling expenses [22][38] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to maintain discipline on promotional activities and achieve profitability despite macroeconomic challenges [34][36] - The anticipated impact of tariffs is approximately $15 million for the current year, with price increases implemented to mitigate these costs [27][28] - The company is maintaining its fiscal year 2025 financial guidance, expecting adjusted EBITDA in the range of $20 million to $25 million [26] Other Important Information - The company is set to open two new stores, marking its first new openings since 2021, in Kansas City and Maple Grove [12] - Capital expenditures for the first half were $9.7 million, with plans to maintain a capital expenditure plan of approximately $17 million for the year [29] Q&A Session Summary Question: Metrics for Pullback in Promotional Activity - Management highlighted gross margin dollars as the primary measure for assessing promotional activity, emphasizing profitability as the main objective [33][34] Question: Gross Margin Rate Expectations - Management indicated that price increases and vendor negotiations are helping to mitigate tariff impacts, with expectations for gross margin rate expansion in the second half of the year [35][36] Question: SG&A Cost Savings Progress - Management noted that they are about a third of the way towards achieving the $10 million cost savings target, primarily from headcount reductions and controllable expenses [38][39] Question: Long-term Margin Targets - Management stated that achieving a strong margin profile will depend on managing expenses and inventory effectively, with a focus on SKU productivity and promotional cadence [40][41]