Core Insights - American Eagle Outfitters reported a fiscal Q2 2025 revenue of $1.28 billion, a 1% decrease year-over-year, marking the second-highest Q2 revenue in the company's history [4][24] - The company expects a tariff impact of approximately $70 million for the second half of fiscal 2025, down from an unmitigated estimate of $180 million [4][7] - The company plans to close 35 to 40 American Eagle locations by year-end, while simultaneously expanding Aerie and offline store locations [4][29] Financial Performance - Gross margin improved to 38.9%, up from 38.6% last year, despite a 20 basis points deleverage in buying, occupancy, and warehousing costs [3][25] - Operating income for Q2 2025 was $103 million, a 2% increase from the previous year, resulting in an operating margin of 8% [3][26] - Diluted EPS rose 15% compared to last year, reflecting strong financial discipline and effective cost management [3][10] Sales and Marketing - The company experienced robust new customer growth driven by celebrity marketing campaigns, resulting in over 700,000 new customers and 40 billion campaign impressions [4][22] - Comparable sales declined 1% in Q2 2025, but Aerie's comparable sales grew by 3%, indicating a positive trend in specific segments [6][17] - The marketing campaigns featuring Sydney Sweeney and Travis Kelce have generated significant engagement and traffic, contributing to record-breaking sales during Labor Day [4][22] Inventory and Supply Chain - Ending inventory cost increased by 8%, primarily due to tariff effects, with units up 3% in Q2 2025 [6][26] - The company actively managed inventory to align with category trends and anticipated demand, minimizing pull-forward related to tariffs [4][7] - Strategic supply chain adjustments, including country-of-origin shifts and vendor negotiations, have helped mitigate tariff impacts [4][7] Future Outlook - For Q3 2025, the company expects a low single-digit increase in comparable sales and operating income in the range of $95 million to $100 million, including approximately $20 million in tariffs [4][30] - Fiscal Q4 2025 guidance includes a low single-digit increase in comparable sales and operating profit projected at $125 million to $130 million, with an expected tariff impact of $40 million to $50 million [4][31] - The company is focused on optimizing its store fleet and enhancing its digital channel to drive future growth [4][28]

Financial Data and Key Metrics Changes - Total revenue for the second quarter was $1,280,000,000, marking a 1% decline compared to the previous year, but it was the second highest revenue ever posted for this quarter [6][22] - Operating income improved by 2% to $103,000,000, exceeding expectations, with diluted EPS increasing by 15% year-over-year [9][22] - Gross profit dollars were $500,000,000, reflecting a gross margin of 38.9%, up from 38.6% last year [23] Business Line Data and Key Metrics Changes - Aerie experienced a comp growth of 3%, driven by strong demand in intimates, soft dressing, sleepwear, and activewear [6][15] - American Eagle saw a decline in comps but improved in key categories such as women's jeans and tops as the quarter progressed [17][19] - The overall traffic was positive across brands and channels, with significant momentum building through the second quarter [7][22] Market Data and Key Metrics Changes - The company reported a strong customer acquisition, with over 700,000 new customers attributed to recent marketing campaigns [20] - The campaigns generated approximately 40,000,000,000 impressions, indicating a significant reach and engagement [33][36] Company Strategy and Development Direction - The company is focused on strengthening its brands, improving growth runway, and managing for higher profitability [5][9] - There is a commitment to operational efficiencies and supply chain improvements, particularly in response to tariff impacts [10][26] - The company plans to open approximately 30 Aerie and offline locations and remodel 40 to 50 AE stores, while closing 35 to 40 American Eagle locations by year-end [28][29] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the early results of actions taken to reignite performance, despite a dynamic consumer backdrop [5][9] - The third quarter is off to a better start, with consolidated comps up in the mid-single digits, and a positive outlook for the remainder of the year [29][30] - Management acknowledged the challenges posed by tariffs but emphasized ongoing efforts to mitigate their impact [10][30] Other Important Information - Year-to-date, the company has returned $276,000,000 to shareholders through dividends and share repurchases [11] - The company expects to incur approximately $20,000,000 in tariff costs in the third quarter and $40,000,000 to $50,000,000 in the fourth quarter [30][40] Q&A Session Summary Question: Can you tell us more about how you keep the momentum going with the new customers attracted by the campaigns? - The campaigns have generated unprecedented new customer acquisition, and the focus is on converting this buzz into repeat business [35][37] Question: Can you provide more details on the comp metrics, transaction ticket, and tariff impacts? - AUR was down mid-single digits, but traffic was healthy, and the team managed to offset some of the declines through effective markdown management [50][52] Question: What percentage of sales does intimates represent for Aerie, and how is the strategy to recapture share? - Intimates account for roughly one-third of Aerie's business, and the company is focused on launching new collections to regain market share [59][61] Question: Are there any product categories not performing well at Aerie? - The shorts category was identified as a challenge, but overall, the company is seeing positive trends in intimates and soft apparel [74][75] Question: What are the expectations for gross margin in the back half of the year? - The company anticipates a decline in gross margin due to tariff impacts, with ongoing efforts to manage expenses and optimize pricing strategies [78][80] Question: How will the marketing spend be allocated for the back half of the year? - Advertising expenses are expected to increase in the third quarter to support ongoing campaigns, while the fourth quarter may see a stabilization in SG&A expenses [100][101]

Financial Data and Key Metrics Changes - The company has achieved a compounded annual growth rate of 21% over the last 17 years, indicating strong historical growth [3] - The gross margin rate grew in the second quarter, reflecting effective management of costs and pricing strategies [32] Business Line Data and Key Metrics Changes - The domestic business in North America grew double digits despite the overall industry decline of 8% in the second quarter [7][27] - The air fryer business is expected to grow globally, with a notable recovery in the UK market after a slight decline earlier in the year [10] Market Data and Key Metrics Changes - The company anticipates that international revenue will approach 50% of total revenue in the near term, with significant opportunities in Germany and France [4][11] - The UK market is projected to generate nearly $1 billion in revenue, with Germany and France collectively representing over $2 billion in potential [11] Company Strategy and Development Direction - The company focuses on three growth pillars: gaining market share in existing categories, expanding into new categories, and international growth [3][4] - SharkNinja emphasizes product diversification, with no single product category representing a significant share of overall business [9] Management's Comments on Operating Environment and Future Outlook - The management acknowledges a challenging consumer environment but believes there is still discretionary spending available for innovative products [30] - The company is committed to launching 25 new products annually, maintaining a strong pipeline of innovation for future growth [39] Other Important Information - The company has successfully diversified its production outside of China, achieving 90% of production from other countries by the second quarter [31] - SharkNinja is investing heavily in social media marketing, spending over 11% of sales on advertising to drive consumer engagement [17] Q&A Session Summary Question: What are your expectations for the consumer environment in the back half of 2025? - Management believes that the consumer environment remains challenging, requiring effort to earn consumer spending [29] Question: Can you provide an update on the impact of tariffs? - The company has diversified production to mitigate tariff impacts, with current tariffs on Chinese products ranging from 30% to 55% [31][32] Question: How should we think about your pricing strategy moving forward? - The company has raised prices on several products without significant impact on demand, indicating strong consumer acceptance [36][37] Question: What is the competitive environment like? - The competitive landscape is always tough, and the company must continuously innovate to maintain its market position [39] Question: How are conversations with wholesale partners regarding forward demand? - Retailers are supportive of SharkNinja's innovation, and underlying consumer demand remains strong [40][41]

Financial Data and Key Metrics Changes - The company aims for mid-single-digit growth while expanding margins, indicating a focus on profitability alongside revenue growth [5][30] - The CFO noted that 80% of the supply chain is U.S. sourced, with 10% from China and 7% from Mexico, which positions the company well against tariff pressures [23] Business Line Data and Key Metrics Changes - The core business categories, including body care, home fragrance, soaps, and sanitizers, are all growing, and the company plans to innovate and sharpen stories in these areas [17] - The company is focusing on fewer categories to drive productivity and better full-price selling, moving away from overwhelming assortments [19][20] Market Data and Key Metrics Changes - The company has launched products into 600 college bookstores, targeting a younger demographic and expanding its market reach [15] - The semi-annual sale performed well, with strategic changes made to timing and assortment to align with consumer mindset [40] Company Strategy and Development Direction - The company is committed to putting the consumer at the center of every decision, emphasizing the importance of understanding consumer needs through direct engagement [6][8] - There is a strategic shift towards enhancing digital presence and improving product efficacy, with plans for new packaging to better communicate product benefits [10][14] Management's Comments on Operating Environment and Future Outlook - Management acknowledges the need to attract new consumers to capture growth in the sector, despite strong repeat purchases from existing customers [9] - The CEO expressed confidence in the company's ability to mitigate tariff impacts through supply chain optimization and assortment adjustments [23] Other Important Information - The loyalty program has grown to 39 million members, with ongoing enhancements to increase customer engagement and retention [32] - The company is exploring new distribution channels to reach consumers more effectively, indicating a shift in how brands are perceived by consumers [15] Q&A Session Summary Question: What is the expectation for the consumer environment in the second half of 2025? - Management expects consumer spending habits to remain about the same as the first half of the year [34] Question: How do you view price elasticity and consumer response to pricing changes? - There is price elasticity, and consumers will pay for well-marketed products, but there will also be moments when value-seeking behavior drives traffic [36] Question: What are the expectations for inventory growth and potential shipment disruptions? - Inventory is expected to increase in the second half, but no disruptions in shipments are anticipated [37] Question: How are non-tariff margin drivers expected to change? - No significant changes in costs are expected, and the company will continue to manage external pressures effectively [37] Question: What are the thoughts on market share consolidation in light of recent bankruptcies? - The company is focused on taking market share and leveraging its profitable platform to drive growth [38] Question: Can you discuss the changes made during the semi-annual sale? - The semi-annual sale was pushed back to better align with consumer mindset, and leveraging social influencers helped create buzz [40]

Financial Data and Key Metrics Changes - Net sales for Q2 2025 were approximately $1.6 billion, up 3.3% year-over-year, with a comparable sales increase of 0.2% [5][18] - Gross margin was 36%, down two basis points from the previous year, while merchandise margin improved by 40 basis points [19][20] - Operating income was $172 million, and diluted earnings per share was $1.85, with adjusted earnings per share at $1.94 [19][20] Business Line Data and Key Metrics Changes - The dot-com business grew approximately 18% during Q2, contributing positively to overall sales [5][18] - Performance across major categories was consistent, with low single-digit increases in footwear, apparel, sports and recreation, and outdoor categories [6][10] - Seasonal categories like swim and summer footwear experienced a slow start but rebounded in late June and July [6][10] Market Data and Key Metrics Changes - Strong double-digit growth in foot traffic was observed among consumers in the top two income quintiles (households making over $100,000) [8][9] - Traffic share remained flat in the middle-income segment ($50,000 to $100,000), while there was erosion in the lower-income cohort (under $50,000), though at a slower pace than in Q1 [9][10] Company Strategy and Development Direction - The company’s primary growth strategy includes opening new stores, with three new locations opened in Q2, bringing the total to 306 stores [10][11] - Focus on enhancing the dot-com business through improved site navigation, order fulfillment, and expanded product assortment [12][15] - Initiatives to improve existing store productivity include adding popular brands and implementing new technology like RFID handheld scanners [13][14] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the business momentum, particularly in light of positive comp sales and market share gains [10][23] - The company is closely monitoring consumer behavior in response to inflation and pricing adjustments, with a focus on maintaining a strong value proposition [8][32] - Future guidance indicates a tightening of the low end of comp sales expectations, now ranging from negative 3% to positive 1% for the year [22][23] Other Important Information - The company has taken measures to mitigate tariff impacts, including adjusting unit buys and optimizing pricing strategies [17][39] - Inventory levels are expected to normalize as the year progresses, with a current elevated inventory per store [20][22] Q&A Session Summary Question: Insights on consumer behavior post back-to-school period - Management noted continued episodic shopping patterns, with positive comps during back-to-school but a slight pullback afterward attributed to less clearance activity [26][27] Question: Impact of tariff pricing on average ticket - Average unit retails (AURs) were up low to mid-single digits, with expectations for further price adjustments in the back half of the year [29][30] Question: Guidance on SG&A and operating leverage - SG&A is expected to deleverage by approximately 100 basis points for the full year, with continued investments in growth initiatives [35][36] Question: Promotional environment and merchandise margin - The promotional environment remains competitive, with higher take rates on promotions, but merchandise margin has not significantly benefited from product mix changes [73][74] Question: Performance of higher-income consumers - The top two income quintiles showed double-digit traffic growth, which is expected to continue driving comp growth [75][76] Question: Expansion of Nike and Jordan assortments - The company has significantly expanded its Jordan assortment since launch, with plans for further expansion in the coming year [80][86]

Financial Data and Key Metrics Changes - Net sales for Q2 2025 were approximately $1.6 billion, an increase of 3.3% year-over-year, with a comparable sales increase of 0.2% [7][23] - Gross margin was 36%, down 2 basis points from the previous year, while merchandise margin improved by 40 basis points [24][10] - Operating income was $172 million, and diluted earnings per share were $1.85, with adjusted earnings per share at $1.94 [25][26] Business Line Data and Key Metrics Changes - The e-commerce channel saw a positive comparable sales increase of approximately 18% during Q2, building on a 10% increase in Q1 [8][23] - Performance across major categories was consistent, with footwear, apparel, sports and recreation, and outdoor categories all showing low single-digit increases [8][10] - Seasonal categories like swim and summer footwear experienced a slow start but rebounded in late June and July [9][10] Market Data and Key Metrics Changes - Strong double-digit growth in foot traffic was observed among consumers in the top two income quintiles (households earning over $100,000) [12] - Traffic share remained flat among middle-income consumers (households earning $50,000 to $100,000), while there was erosion in lower-income cohorts (households earning less than $50,000) [12][13] - Market share gains were noted across key businesses such as apparel, footwear, sporting goods, fishing, and outdoor cooking [12][13] Company Strategy and Development Direction - The company’s primary growth strategy includes opening new stores, with three new locations opened in Q2, bringing the total to 306 stores across 21 states [14] - The focus on enhancing the e-commerce business includes streamlining site navigation, improving order fulfillment, and expanding product assortment [15][20] - Initiatives to improve existing store productivity include adding desirable brands and implementing new technology like RFID scanners [17][18] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the impact of inflation on consumer behavior, noting a trade-down effect where consumers are seeking value [11][12] - The company remains optimistic about the momentum in the business, expecting continued positive trends in sales and market share [28][29] - Management is confident in their strategies to mitigate tariff impacts and maintain a strong value proposition for customers [22][46] Other Important Information - The company ended the quarter with $300 million in cash and maintained strong liquidity with an undrawn $1 billion revolver [26] - Free cash flow for Q2 was $21.7 million, with significant investments made in inventory and strategic initiatives [27] - The company has over $530 million remaining on its current share repurchase authorization [28] Q&A Session Summary Question: Insights on consumer behavior post back-to-school period - Management noted episodic shopping patterns and expressed optimism about momentum continuing into the remainder of the year despite a slight pullback after back-to-school [31][33] Question: Impact of tariff pricing on average ticket - Average unit retails (AURs) were up low to mid-single digits, with expectations for further price adjustments in the back half of the year [35][36] Question: Guidance on SG&A and operating leverage - Management indicated a commitment to disciplined spending, with expectations for SG&A deleverage to moderate in the back half of the year [40][50] Question: Promotional environment and merchandise margin - The promotional environment remains competitive, with higher take rates observed during promotional events, while merchandise margins are expected to benefit from a favorable mix [79][80] Question: Performance of higher income consumer segments - The top two income quintiles showed double-digit growth in traffic, which is expected to continue driving comp growth [81][83] Question: Expansion of Nike and Jordan assortments - The company has significantly expanded its Jordan brand assortment and is seeing strong performance from both Nike and Jordan products [87][90]

Financial Performance - Company reported a 3.3% increase in net sales for the second quarter, totaling $1,599.8 million compared to $1,549.0 million in the same period last year [1][21] - Comparable sales increased by 0.2%, a significant improvement from a decline of 6.9% in the previous year [1][21] - Diluted GAAP earnings per share (EPS) for the second quarter was $1.85, down 5.1% from $1.95 in the prior year [1][21] Year-to-Date Results - Year-to-date net sales reached $2,951.2 million, reflecting a 1.3% increase from $2,913.2 million in the same period last year [3][22] - Year-to-date comparable sales decreased by 1.7%, an improvement from a decline of 6.4% in the previous year [3][22] - Year-to-date net income was $171.5 million, down 21.7% from $219.1 million in the prior year [3][22] Store Expansion - Company opened three new stores in Florida, Virginia, and West Virginia during the second quarter, bringing the total to 306 locations across 21 states [1][7] - Plans to open 20 to 25 new stores in fiscal 2025 [7] Inventory and Cash Position - Merchandise inventories increased by 16.2% year-over-year, totaling $1,587.6 million [4][22] - Cash and cash equivalents decreased by 7.3% to $300.9 million compared to $324.6 million in the previous year [4][22] Capital Allocation - Share repurchases totaled $222.3 million, a decrease of 55.1% compared to the previous year [6] - Dividends paid increased by 8.1% to $16.1 million [6] Tariff Mitigation Strategies - Company has implemented various strategies to mitigate the impact of tariffs, including partnering with vendors and adjusting unit buys [9][10] - These actions are expected to help maintain a strong value proposition for customers [10] 2025 Outlook - Company narrowed its sales guidance for fiscal 2025, now expecting a range of -3.0% to positive 1.0% [11] - Updated guidance for net sales is between $6,000 million and $6,265 million [11]

Financial Data and Key Metrics Changes - Gap Inc. reported a gross margin expansion of 360 basis points to 41.2% in the second quarter compared to the same period two years ago [7] - The company achieved an operating margin of 7.8% and earnings per share (EPS) of $0.57, which is a 6% increase year-over-year [10][31] - Cash balances at the end of the quarter were approximately $2.4 billion, allowing for targeted investments [10][32] Business Line Data and Key Metrics Changes - Old Navy's net sales were $2.2 billion, up 1% year-over-year, with comparable sales increasing by 2% [33] - Gap brand net sales reached $772 million, up 1% year-over-year, with comparable sales up 4% [34] - Banana Republic's net sales were $475 million, down 1% year-over-year, but comparable sales increased by 4% [34] - Athleta's net sales decreased by 11% year-over-year to $300 million, with comparable sales down 9% [35] Market Data and Key Metrics Changes - Comparable sales for Gap Inc. increased by 1% in the quarter, with positive contributions from Old Navy, Gap, and Banana Republic [10] - Athleta faced challenges, indicating a need for a brand reset to align with customer expectations [23] Company Strategy and Development Direction - The company is focused on four strategic priorities: maintaining financial and operational rigor, reinvigorating brands, strengthening the platform, and energizing culture [6][8] - The brand reinvigoration playbook is driving growth across three of the four brands, with a particular emphasis on denim and active categories [11][12][21] - The company is investing in technology to enhance efficiency and customer experience, including leveraging AI in various operations [26][27] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate a dynamic environment and achieve sustainable, profitable growth [6][9] - The outlook for fiscal 2025 includes net sales growth of 1% to 2%, despite anticipated headwinds from tariffs [30][41] - Management noted that the impact of tariffs is expected to be approximately 100 to 110 basis points on operating margin [42] Other Important Information - The company is committed to returning value to shareholders, having returned approximately $144 million through share repurchases and dividends [32] - The company ended the quarter with a strong balance sheet, including $2.4 billion in cash and equivalents, providing financial flexibility for future investments [38] Q&A Session Summary Question: Concerns about lowering full-year EBIT and EPS guidance despite strong Q2 performance - Management acknowledged the solid Q2 results but indicated that the updated guidance reflects headwinds from trade policies, particularly tariffs impacting operating margins [50][52] Question: Confidence in achieving double-digit margins in the long term - Management expressed confidence in long-term operating margin improvement opportunities, emphasizing the effectiveness of their strategies and playbook [55][56] Question: Drivers of revenue acceleration in the third quarter forecast - Management highlighted the strong performance of Gap and Old Navy, with positive trends in back-to-school assortments contributing to confidence in the third quarter [74][82] Question: Pricing strategy and its role in mitigating tariff pressures - Management clarified that pricing strategies are being used to maintain value propositions while mitigating tariff impacts, with a disciplined approach to pricing across brands [86][87]

Financial Data and Key Metrics Changes - Sales increased by 3% to $161.8 million compared to $157 million last year, with adjusted operating profit more than doubling to $7 million from $2.6 million despite a $2.2 million impact from U.S. tariff expenses [5][17] - Gross profit margin was 54.1% compared to 54.3% in the same quarter last year, primarily affected by increased tariffs and unfavorable foreign exchange [18][19] - Net income for the quarter was $5.3 million or $0.23 per diluted share, up from $3.5 million or $0.15 per diluted share in the prior year [20] Business Line Data and Key Metrics Changes - The company's owned brands experienced a 5.6% sales decline, while licensed brands grew by 6.5% on a constant currency basis or 9.5% on a reported basis [7][12] - The Movado brand saw a return to growth in wholesale distribution, with a 6% growth in its own e-commerce site [10] - The outlet stores segment grew by 2.4% for the quarter, indicating positive trends in that channel [9] Market Data and Key Metrics Changes - U.S. net sales declined by 1.6%, while international net sales increased by 6.9% or 3.9% on a constant currency basis, with strong performances in Europe, Latin America, and India [8][18] - The Middle East market is currently being rebuilt, which has impacted overall performance [8] Company Strategy and Development Direction - The company is focused on returning to growth and profitability, expecting approximately $10 million in annualized savings from actions taken to reduce operating expenses [6][7] - New product launches and marketing campaigns are planned for the second half of the year, targeting both women's and men's watch categories [11][14] - The company is closely monitoring the tariff situation and developing mitigation plans while maintaining a strong balance sheet with over $180 million in cash and no debt [6][25] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the resurgence in the fashion watch market and the potential for growth in the mini and micro watch categories, particularly among younger consumers [27][28] - The company is not providing a fiscal 2026 outlook due to ongoing uncertainties around tariffs and the broader retail environment [25] Other Important Information - The company has built a strong inventory position of Swiss-made watches in the U.S. to mitigate tariff impacts [6][24] - Capital expenditures for the first six months were $2.8 million, and approximately 100,000 shares were repurchased under the share repurchase program [24] Q&A Session Summary Question: Insights on consumer habits regarding mini watches - Management noted a trend of smaller watches gaining popularity again, particularly among young women, driven by social media and layering with jewelry [27][28] Question: Performance during Prime Day - The company observed strong performance in its digital business during Prime Day, particularly in Europe, indicating a positive trend across its brand portfolio [29] Question: Inventory increase due to tariffs - Management explained that inventory was rebuilt after being low at year-end, with expectations to align inventory levels by year-end while managing tariff impacts [30][33] Question: Future of restructuring charges - Management indicated that restructuring charges are predominantly done, with expectations for a significant reduction in future expenses [36]

Financial Data and Key Metrics Changes - The company reported net sales of $1.5 billion, an increase of 1.5% compared to the prior year, achieving results at the high end of guidance [24][29] - Adjusted earnings per diluted share were $0.37, also at the high end of guidance [24] - Gross profit rate improved to 41.3%, up 30 basis points year-over-year, despite a $16 million headwind from tariffs [32] - Adjusted SG&A as a percentage of net sales was 30.2%, representing a 110 basis point deleverage compared to the prior year [32] Business Line Data and Key Metrics Changes - The sanitizer business performed well, with positive consumer response to new products [26] - Men's business showed growth, particularly highlighted during Father's Day [26] - Body Care category was disappointing, down low single digits, with stronger results during the semiannual sale [94] Market Data and Key Metrics Changes - U.S. and Canadian stores net sales totaled $1.2 billion, a 5% increase versus the prior year [30] - Direct net sales were $267 million, a decrease of 10% compared to last year, but down only 3% when adjusted for Buy Online Pickup in Store [30] - International net sales were $86 million, a decline of 3%, attributed to timing of shipments [31] Company Strategy and Development Direction - The company aims to position itself as a global leader in home fragrance and personal care, focusing on product innovation and alternative distribution [8][11] - A multi-year partnership with Disney was announced, building on previous successful collaborations [12] - The company is enhancing its digital platform to improve consumer experience and drive sales [13][14] Management's Comments on Operating Environment and Future Outlook - Management noted that consumers are cautious and value-seeking, prioritizing purchases that support personal well-being [5] - The company is confident in its ability to absorb tariff impacts and is focused on mitigating costs through strategic sourcing and operational efficiencies [36][56] - Management expressed optimism about the potential for growth, particularly in digital channels and new consumer engagement strategies [60][74] Other Important Information - The company plans to increase share repurchases from $300 million to $400 million [39] - Capital expenditures for the year are expected to be between $250 million and $270 million, focusing on real estate and technology [39] Q&A Session Summary Question: Assessment of opportunities ahead and traffic trends - Management sees more opportunities for growth than initially expected, with a focus on digital platforms and product efficacy [42] - Traffic was up in Q2, with June being particularly strong, while July normalized after the Halloween launch [48] Question: Marketing changes and customer response - Marketing efforts are shifting to focus on emotional connections rather than pricing, with positive consumer responses noted [51][52] Question: Tariff impact between Q3 and Q4 - Q3 is expected to be disproportionately impacted by tariffs, with a $40 million effect on margins [56] Question: Contribution from campus stores and future wholesale opportunities - The campus bookstore initiative is seen as a strategic move to reach younger consumers, with further distribution opportunities being explored [88] Question: Drivers of SG&A deleverage - SG&A pressure is attributed to higher healthcare costs and strategic investments, with ongoing efforts to offset these impacts [90] Question: Digital business outlook and improvements - The digital platform is not meeting expectations, but improvements are underway, including a new app and enhanced online experience [74][75]