Financial Data and Key Metrics Changes - In Q3 of fiscal 2025, consolidated net sales were $307 million, slightly down from $308 million in Q3 of fiscal 2024, within the guidance range of $295 million to $310 million [23] - Adjusted gross margin contracted by 200 basis points to 61%, primarily due to increased cost of goods sold from tariffs and a change in sales mix [25] - Adjusted SG&A expenses increased by 4% to $209 million compared to $201 million last year, driven by higher employment, occupancy, and depreciation costs [26] - The company reported an adjusted net loss per share of $0.92, with non-cash impairment charges totaling $61 million related to the Johnny Was trademark [27] Business Line Data and Key Metrics Changes - Lilly Pulitzer experienced strong growth with total sales increasing year-over-year, driven by double-digit growth in retail and high single-digit growth in e-commerce [24] - Tommy Bahama saw a low single-digit negative comp, although comps improved sequentially from down high single digits earlier in the year [8][24] - Johnny Was faced a high single-digit negative comp, leading to sales decreases, despite efforts to strengthen the brand through leadership changes and business improvement plans [10][24] Market Data and Key Metrics Changes - The overall consumer environment remained highly competitive and promotional, with consumers being selective in discretionary spending [4] - The holiday selling period was more promotional than the previous year, impacting sales performance [12] - The Emerging Brands Group showed strong momentum, with year-over-year sales gains, reflecting growing recognition and customer engagement [18] Company Strategy and Development Direction - The company is focused on improving profitability and has begun implementing cost reduction initiatives, including efforts around indirect spend and SG&A efficiencies [20] - There is a clear emphasis on enhancing merchandising effectiveness, marketing efficiency, and improving the go-to-market process, particularly for Johnny Was [46] - The company plans to continue investing in long-term brand strength while managing tariff impacts and promotional pressures [21][19] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenges posed by tariff-related product limitations and a highly promotional environment affecting holiday sales [12][19] - The company expects fourth-quarter performance to land below previous guidance due to a slower start to the holiday season [19] - Looking ahead to fiscal 2026, the company is optimistic about realizing benefits from cost reduction initiatives and improved merchandising strategies [20] Other Important Information - The company is in the final stages of constructing a new fulfillment center, which is expected to enhance direct-to-consumer capabilities [6] - Capital expenditures are expected to decline significantly as the new fulfillment center is completed [21] - The company anticipates a net tariff impact of approximately $25 million to $30 million for fiscal 2025, contributing to margin contraction [31] Q&A Session Summary Question: How meaningful would the assortment gap be for the upcoming season? - Management indicated that the assortment gap was primarily due to sourcing decisions made under tariff uncertainty, but they expect to have a more complete assortment for spring [38][40] Question: What is the current promotional intensity in the marketplace? - Management noted that promotional intensity remains high, but they are adapting their promotional strategies to remain competitive [42] Question: Can you elaborate on the wholesale situation? - Management acknowledged cautious behavior from wholesale partners, with less inventory needing liquidation through off-price channels [47][48] Question: What are the plans for price increases to offset tariffs? - Management indicated that price increases are planned for spring, ranging from 4% to 8%, to help mitigate tariff impacts [59] Question: How are the brands performing quarter to date? - Management reported broad-based weakness in the larger brands, while smaller brands continue to perform well [54]

In the near term, risks to inflation are tilted to the upside and risks risks to employment to the downside. A challenging situation. There is no risk-free path for policy as we navigate this tension between our employment and inflation goals.A reasonable base case is that the effects of tariffs on inflation will be relatively short-lived, effectively a one-time shift in the price level. Our obligation is to make sure that a one-time increase in the price level does not become an ongoing inflation problem. ...

Inflation has eased significantly from its highs in mid 2022, but remains somewhat elevated relative to our 2% longerrun goal. Very little data on inflation have been released since our meeting in October. Total PCE prices rose 2.8% over the 12 months ending in September. And excluding the volatile food and energy categories, core PCE prices also rose 2.8%.These readings are higher than earlier in the year as inflation for goods has picked up, reflecting the effects of tariffs. In contrast, disinflation app ...

Federal Reserve Chairman Jerome Powell on Wednesday declined to comment on the upcoming Supreme Court decision that could shape the future of President Donald Trump's trade agenda. "It's not something I want to address here," Powell said during a press conference following the central bank's December interest rate decision. "It's before the courts and we don't think that we help matters by trying to engage," he added.When asked how the Fed would incorporate potential changes to growth and inflation should t ...

Core Viewpoint - Costco Wholesale Corporation is expected to report first-quarter financial results, with a focus on the impact of tariffs on its business operations [1][8]. Earnings Estimates - Analysts predict Costco will report first-quarter revenue of $67.17 billion, an increase from $62.15 billion in the same quarter last year [1]. - Expected earnings per share (EPS) for the first quarter is $4.28, up from $3.82 in the previous year [2]. Recent Performance - Costco has exceeded revenue estimates for three consecutive quarters and for six out of the last ten quarters [2]. - The company has also beaten EPS estimates in two straight quarters and in eight of the last ten quarters [2]. Expert Opinions - Concerns regarding membership growth and margin pressure are noted to be modest, while tariff issues are significant [3]. - Rising merchandise costs and consumer spending dynamics may lead to persistent margin pressure due to inflation or tariffs [4]. - Analysts have mixed views on Costco's performance, with some maintaining an Overweight rating while adjusting price targets [5][6]. Key Items to Watch - Tariffs are a primary concern for investors, especially in light of Costco's lawsuit challenging the authority to impose tariffs [8]. - The company's strategy to mitigate tariff impacts includes increasing production of its Kirkland Signature brand items [8]. - Recent traffic reports indicate a year-over-year increase in foot traffic, with a 6.0% rise in the third calendar quarter [9]. Stock Performance - Costco's stock is trading at $874.49, down 3.9% year-to-date, within a 52-week range of $871.09 to $1,078.24 [11].

Core Viewpoint - President Trump criticized the Federal Reserve's recent interest rate cut, suggesting it could have been more substantial to better support economic growth [1][2]. Group 1: Federal Reserve's Decision - The Federal Reserve cut benchmark interest rates by 25 basis points, marking its third cut of the year [2]. - The decision reflected a divided opinion within the Fed, with two members preferring no change and one member advocating for a larger cut [2]. Group 2: Economic Context - Fed Chair Jerome Powell described the rate cut as a "close call," indicating a cautious approach to future economic developments [3]. - Powell attributed the current inflation levels to President Trump's tariffs, noting that inflation for goods has increased due to these tariffs [3].

This is now the third time that you've cut this year and inflation is around 3%. So is the message that you're sort of trying to send with that that you're okay with where inflation is for now as long as people understand that at some point you still want to get back to 2% because inflation is relatively stable where it is. >> Everyone should understand and the surveys show that they do that we're committed to 2% inflation and we will deliver 2% inflation.But it's a complicated, unusual, difficult situation ...

JUST IN: 🇺🇸 Fed Chair Jerome Powell says "we will deliver 2% inflation.""It is really tariffs that is causing most of the inflation overshoot." https://t.co/qiE5FaGkYb ...

Core Viewpoint - The Federal Open Market Committee has decided to lower the policy interest rate by a quarter percentage point to support employment and inflation goals, while also initiating purchases of shorter-term Treasury securities to maintain an ample supply of reserves [2] Economic Activity - Economic activity is expanding at a moderate pace, with solid consumer spending and continued growth in business fixed investment [3] - The housing sector remains weak, and the temporary federal government shutdown has negatively impacted economic activity, though growth is expected to rebound next quarter [4] Labor Market - Despite delays in official employment data, evidence indicates low levels of layoffs and hiring, with perceptions of job availability declining [5] - The unemployment rate has edged up to 4.4%, with job gains slowing significantly, attributed to a decline in labor force growth due to lower immigration and participation [5][6] - The median projection for the unemployment rate is 4.5% at the end of this year, with a slight decrease expected thereafter [6] Inflation - Inflation has eased from mid-2022 highs but remains elevated, with total PCE prices rising 2.8% over the 12 months ending in September [7] - Core PCE prices also rose 2.8%, with inflation for goods increasing due to tariffs, while disinflation in services continues [8] - The median projection for total PCE inflation is 2.9% this year and 2.4% next year, with a long-term goal of 2% [9]

Economic Outlook - The economy is expanding at a moderate pace, with solid consumer spending and business fixed investment [3] - The temporary government shutdown likely weighed on economic activity in the current quarter, but these effects should be mostly offset by higher growth next quarter [4] - Real GDP is projected to rise 17% this year and 23% next year, somewhat stronger than projected in September [4] Labor Market - Labor market conditions appear to be gradually cooling [1] - Layoffs and hiring remain low, and perceptions of job availability and hiring difficulty have declined [5] - The unemployment rate reached 44% in September, and job gains have slowed significantly [5] - The median projection of the unemployment rate is 45% at the end of this year and edges down thereafter [6] Inflation - Inflation has eased significantly from its highs in mid-2022, but remains somewhat elevated relative to the 2% longerrun goal [7] - Total PCE prices rose 28% over the 12 months ending in September, and core PCE prices also rose 28% [7] - Near-term measures of inflation expectations have declined from their peaks earlier in the year [8] - The median projection for total PCE inflation is 29% this year and 24% next year, a bit lower than the median projection in September, thereafter, the median falls to 2% [9] Monetary Policy - The Federal Open Market Committee decided to lower the policy interest rate by a quarter percentage point (025%) [2] - The Committee also decided to initiate purchases of shorterterm Treasury securities solely for the purpose of maintaining an ample supply of reserves [2]