I mean, it also gets to the macro question. H how much tougher is it for you to pull off this turnaround right now given what's happening in the macroeconomic environment. >> Yeah.I here's what I always say to the our team. Uh I think if we get caught up in the noise, I I I think that becomes a distraction. And so trying to keep uh our team here really focus in on what we can control.And what we can control is being focused on sport and the athlete and then making certain we're bringing the most beautiful c ...

Summary of V.F. Corporation FY Conference Call (September 17, 2025) Company Overview - **Company**: V.F. Corporation (NYSE: VFC) - **Key Brands**: Vans, The North Face, Timberland, Altra, Dickies Key Points and Arguments Portfolio Review and Brand Sale - The decision to sell Dickies was unexpected and driven by an attractive inbound offer from Blue Star Alliance, despite Dickies being a valued brand within the portfolio [2][3] - The sale is expected to improve leverage ratios and allow for debt repayment, indicating a strategic long-term decision rather than a reaction to short-term performance [3][4][5] Financial Health and Debt Management - The proceeds from the Dickies sale will fully fund the next tranche of debt, reducing the need to draw on the asset-based lending facility, thus saving on interest expenses [6][8] - The company is on track to meet fiscal year free cash flow guidance and is committed to paying down debt [4][6] Consumer Sentiment and Economic Outlook - The U.S. consumer remains "stubbornly positive," with the company not overly reliant on economic conditions for growth [9] - The company is confident in its ability to offset tariffs through cost reductions and strategic pricing [10][12] Brand-Specific Insights Vans - Strategic actions affecting Vans are expected to conclude by Q4, with new product introductions planned for upcoming seasons [23][31] - The brand is focusing on both comfort and style, with a mix of trends appealing to diverse consumer preferences [29] - Marketing efforts are being enhanced, including a partnership with SZA as the new Artistic Director to attract a broader audience [33][34] The North Face - The North Face is focusing on improving its cultural relevance and expanding its product offerings, particularly in the women's segment [49] - The brand's performance in the Americas is lagging compared to Europe and APAC, with plans to elevate product offerings in the U.S. market [50][52] - The company aims to position The North Face as a four-season brand, with plans for better product availability and marketing strategies [57] Timberland - Timberland has seen strong growth, particularly driven by the 60th anniversary of the Yellow Boot and successful collaborations [58][59] - The brand is focused on sustaining growth beyond the Yellow Boot and ensuring a solid foundation for future expansion [60][61] Altra - Altra is experiencing significant growth, with a reported 20% increase last quarter, but brand awareness remains low at around 8% [68][69] - The company sees potential for Altra to grow systematically, particularly in the trail running segment [69] Marketing and Operational Efficiency - The company is improving marketing efficiency by reallocating funds from non-working media to more impactful advertising [38][40] - There is a focus on direct-to-consumer strategies, with some store closures expected to optimize the retail footprint [42][43] Conclusion - V.F. Corporation is strategically repositioning its brand portfolio, focusing on long-term growth and operational efficiency while navigating economic challenges and consumer trends. The sale of Dickies is a pivotal move to enhance financial health and prioritize core brands.

Financial Data and Key Metrics Changes - Net sales increased by 12.3% to $4.6 billion, driven by a 6.5% comparable sales growth, which was balanced between traffic and ticket as well as consumables and discretionary items [8][20] - Adjusted EPS was $0.77, exceeding expectations, with strong performance attributed to higher sales and effective cost management [19][20] - Gross margin increased by 20 basis points to 34.4%, supported by lower merchandise costs and favorable pricing strategies [21] Business Line Data and Key Metrics Changes - Comparable sales for consumables rose by 6.7%, while discretionary items saw a 6.1% increase, indicating broad-based strength across categories [21] - The company completed 3,600 store conversions to the 3.0 format and is on track to reach approximately 5,000 by year-end [10] Market Data and Key Metrics Changes - The company added 2.4 million new customers over the last 12 months, with nearly two-thirds coming from households earning $100,000 or more [9] - The number of shoppers visiting three or more times a month increased by 11% in Q2, reflecting growing customer engagement [9] Company Strategy and Development Direction - The company aims to continue rolling out its expanded assortment to drive higher traffic and ticket, while managing costs through five mitigation levers [28] - The divestiture of Family Dollar allows the company to focus entirely on strengthening the Dollar Tree brand, enhancing decision-making and operational efficiency [28] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the volatile retail environment due to elevated tariffs and cost pressures but expressed confidence in the company's ability to adapt and thrive [7][12] - The company remains cautious about consumer spending due to rising costs across the retail landscape, but is optimistic about its value proposition [76] Other Important Information - The company opened 254 new stores in the year, including 42 former Party City locations, and expects to reach a total of approximately 400 new stores by year-end [14] - A new partnership with Uber Eats was announced, aimed at reaching a younger demographic and enhancing customer accessibility [15] Q&A Session Summary Question: Concerns about consumer pushback on pricing and long-term margin risks - Management responded that customer traffic and ticket remain balanced, with strong performance across income levels, indicating that the value proposition is resonating well [34] Question: Drivers of higher ticket and pricing actions - Management noted that despite some price increases, unit performance was better than expected, suggesting customers still find value [38] Question: Guidance for the back half of the year and cost headwinds - Management explained the wide comp range is due to market volatility and rising costs, particularly in general liability claims [40][42] Question: Normalized EPS expectations - Management indicated that there are many moving parts affecting EPS, making it difficult to quantify a normalized level, but they aim to maintain gross margins [46][51] Question: Performance across income demographics - Management highlighted strong performance from both higher-income and lower-income customers, with the latter benefiting from pack sizes that help stretch budgets [54] Question: Zone pricing strategy - Management confirmed that while zone pricing remains a priority, current focus is on tariff mitigation strategies due to the volatile cost environment [67] Question: Performance of multi-price assortment - Management reported strong performance across all price points, with higher basket sizes in multi-price categories [70][72] Question: Consumer challenges and TSA outlook - Management expressed caution regarding consumer spending due to rising costs but remains confident in the company's value proposition [76][78]

Financial Data and Key Metrics Changes - The company reported record net sales of $1,210,000,000 for Q2, a 7% increase compared to the previous year, exceeding expectations [7][20] - Operating margin was 13.9%, above the outlook range provided in May, with adjusted net income per diluted share at $2.32, slightly above last year's $2.50 [8][24] - The company repurchased $50,000,000 worth of shares in the quarter, totaling $250,000,000 in repurchases for the year [8][25] Business Line Data and Key Metrics Changes - Hollister brands achieved a 19% increase in net sales for Q2, with comparable sales also up 19%, driven by strong cross-channel traffic [10][21] - Abercrombie brands saw a 5% decline in net sales, with comparable sales down 11%, primarily due to lower average unit retail (AUR) as inventory was cleared [12][21] Market Data and Key Metrics Changes - The Americas region reported an 8% increase in net sales, marking its twelfth consecutive quarter of growth, while EMEA experienced a 1% decline [9][20] - APAC region continued to perform well with a 12% growth in net sales [9][20] Company Strategy and Development Direction - The company is focused on leveraging its strong brand positioning and clean inventory to drive sales growth and profitability in the second half of the year [16][28] - The company plans to open 60 new stores and remodel 40 existing locations, expecting to be net store openers [29][98] - A partnership with the NFL was announced, aiming to enhance brand visibility and engagement [14][78] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in returning to growth for Abercrombie by the end of the year, citing strong traffic and successful product launches [37][106] - The company is navigating a challenging tariff environment with a focus on mitigating costs through various strategies [18][120] Other Important Information - The company anticipates a tax rate around 30% and expects capital expenditures of approximately $225,000,000 for the year [29][30] - Marketing investments are expected to increase by over 100 basis points year-over-year to support key partnerships and campaigns [30][86] Q&A Session Summary Question: What markers give confidence for Abercrombie's acceleration? - Management highlighted strong traffic, new partnerships, and successful store openings as key indicators of confidence for growth [35][36] Question: Clarification on credit card settlement inclusion/exclusion? - The $39,000,000 net benefit from the credit card settlement was included in the operating margin guidance, offset by increased tariffs [38][39] Question: Update on Abercrombie Kids' entry into department stores? - The launch has been positive, with good feedback from partners and customers, indicating a successful diversification of the operating model [41][42] Question: Insights on Hollister's momentum and developments? - Hollister's performance is strong across categories, with successful product launches and a focus on customer engagement driving growth [50][51] Question: Traffic cadence during Q2 and expectations for Q3? - Traffic has been consistently strong across brands and channels, with positive momentum heading into the back-to-school season [60][61] Question: Details on tariff impact and mitigation efforts? - The company is facing a $90,000,000 tariff impact for the year, with ongoing efforts to optimize sourcing and manage costs [27][76] Question: Update on the denim category and pricing strategy? - The denim business is performing well with a variety of price points, reflecting strong customer demand and engagement [122][124]

Investment Rating - The report maintains a cautious outlook on Yue Yuen Industrial Holdings, reflecting the challenges faced in the retail segment while acknowledging steady growth in manufacturing [2][10]. Core Insights - Yue Yuen's manufacturing business showed resilience with a revenue increase of 6.2% year-on-year, reaching USD 2.798 billion, while retail revenue fell by 8.6% to USD 1.262 billion [2][10]. - The company is focusing on prudent inventory and discount management to balance profitability and channel health, with inventory turnover days at 146 days [4][12]. - The management has emphasized a refined retail strategy and diversification of channels, particularly enhancing online sales which grew by 16% year-on-year [3][11]. Summary by Sections Financial Performance - In 1H2025, total revenue was USD 4.06 billion, a 1.1% increase year-on-year, with manufacturing revenue at USD 2.798 billion and retail revenue at USD 1.262 billion [2][10]. - The average selling price for footwear increased by 3.2% to USD 20.61 per pair, benefiting from a premium order mix [2][10]. Retail Strategy - Pou Sheng International's omni-channel revenue grew significantly, driven by online sales, which doubled due to live-streaming initiatives [3][11]. - The company plans to maintain its offline store count between 3,300 and 3,500 while focusing on enhancing single-store efficiency [3][11]. Inventory and Cost Management - The management is implementing measures such as production cuts and clearance sales to control inventory levels, with nearly 9% of inventory being aged [4][12]. - The gross profit margin for manufacturing decreased to 17.7%, impacted by rising labor costs and uneven capacity utilization [2][10]. Capacity Expansion and Tariff Strategy - The company is optimizing its capacity layout and expanding production in Indonesia and India to mitigate tariff impacts, with a projected capital expenditure of around USD 300 million for factory construction [5][13].

Financial Data and Key Metrics Changes - Global revenue increased by 8%, with a 4% contribution from Helly Hansen [22] - Adjusted earnings per share (EPS) was $1.21, a 23% increase compared to the prior year, while adjusted EPS excluding Helly Hansen was $1.33, a 36% increase [28][29] - Adjusted gross margin expanded by 120 basis points to 46.4% due to Project Genius benefits and lower input costs [27] Business Line Data and Key Metrics Changes - Wrangler's global revenue increased by 7%, with a 9% increase in the U.S. driven by 16% growth in direct-to-consumer (DTC) and 8% growth in wholesale [23] - Lee's global revenue decreased by 6%, with a 5% decline in the U.S. driven by wholesale declines, partially offset by 9% growth in digital [24][25] - Helly Hansen's global revenue in June was $29 million, exceeding expectations of $20 million to $25 million [26] Market Data and Key Metrics Changes - Wrangler's international revenue decreased by 6%, driven by a 6% decrease in wholesale [23] - Lee's international revenue also decreased by 6%, with declines in wholesale offsetting low single-digit growth in DTC [25] - The U.S. market showed strong performance with mid-single-digit growth in POS trends in the second quarter [23] Company Strategy and Development Direction - The company is focused on accelerating growth through geographic, category, and channel expansion, particularly with Helly Hansen [39] - The value creation framework is built on four pillars: accelerate growth, double Helly's operating margins, increase capital allocation optionality, and establish Kontoor as the employer of choice [12] - The company plans to hold an Investor Day in 2026 to share strategic vision and financial model improvements [21] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving the 2025 plan, citing significant momentum in Wrangler and a positive outlook for Lee and Helly Hansen [20][41] - The operating environment remains uncertain, but the company is executing at a high level and sees opportunities for shareholder value creation [21][42] - The company anticipates a full-year revenue range of $3.09 billion to $3.12 billion, representing growth of 19% to 20% [35] Other Important Information - Inventory increased by 40% to $686 million, with a focus on improving working capital and inventory turnover [30] - The company declared a regular quarterly cash dividend of $0.52 per share [33] - The company is managing tariff impacts through production transfers and pricing strategies, with an estimated $15 million impact on operating profit in 2025 [34][75] Q&A Session Summary Question: What is the EBIT contribution from Helly Hansen this fiscal year? - The EBIT contribution is expected to be around $50 million, with a revenue run rate of approximately $680 million [44] Question: Can you elaborate on the cadence for the second half revenue growth? - The revenue outlook for the third quarter is approximately $855 million, with a significant contribution from Helly Hansen expected in the fourth quarter [56] Question: What actions are being taken in APAC for Lee's distribution? - The company is working to strengthen its retail partnerships and improve inventory positions in China, with a focus on sustainable growth [60][62] Question: What is the expected impact of tariffs on the business? - The anticipated net impact to operating profit in 2025 is approximately $15 million, with ongoing efforts to mitigate this through pricing and production adjustments [34][74] Question: How is the company planning to invest in marketing for Helly Hansen? - Significant marketing investments are planned for both Wrangler and Helly Hansen, with a focus on digital and direct-to-consumer strategies [95][100]

Financial Data and Key Metrics Changes - Revenue for Q2 2025 was $3.9 billion, down 2% year-over-year and down 3% organically [11][12] - Adjusted gross margin rate for Q2 was 27.5%, a decrease due to tariffs and lower volume, partially offset by supply chain efficiencies [13][14] - Adjusted EBITDA margin was 8.1%, down 260 basis points year-over-year [14] - Adjusted earnings per share was $1.08, including a discrete tax benefit [14] - Free cash flow for Q2 was $135 million, reflecting strong operational performance despite trade policy impacts [15] Business Segment Performance - Tools and Outdoor segment revenue was approximately $3.5 billion, representing a 2% decline, with organic revenue down 3% [18][19] - DEWALT brand continued to show growth, with professional demand remaining resilient [19] - Engineered Fastening segment revenue was down 2% year-over-year, with a 1% organic decline [23] - Aerospace business achieved over 20% organic growth, reaching an annualized run rate of $400 million [24] Market Data and Key Metrics Changes - North America organic revenue declined by 4%, while Europe saw a 1% decline [21][22] - The rest of the world delivered 1% organic growth, driven by strong performance in Latin America and the Middle East [22] - Outdoor organic revenue declined 7% due to a slow buying season, but demand improved in July [21] Company Strategy and Industry Competition - The company is focused on a multi-year supply chain transformation aimed at improving cost structure and operational efficiency [9][26] - Plans to achieve $2 billion in pretax run rate cost savings, with $1.5 billion attributed to supply chain improvements [26][27] - The company aims for a long-term adjusted gross margin of 35% or higher, with initiatives to mitigate tariff impacts [31][39] Management's Comments on Operating Environment and Future Outlook - Management noted a challenging operating environment due to tariffs and a slow outdoor buying season, but expressed confidence in the company's foundation for future growth [10][11] - The company anticipates organic revenue to remain relatively flat in the second half of 2025 [12][37] - Management is committed to maintaining a strong balance sheet and achieving deleveraging goals by 2026 [41][42] Other Important Information - Leadership transition is underway, with Chris Nelson set to become CEO on October 1, 2025 [6][17] - The company is actively engaging with the U.S. administration regarding trade policies [32] Q&A Session Summary Question: Gross margin outlook for Q4 - Management expects gross margin expansion in Q3 and Q4, with Q4 potentially reaching 33% to 34% [50][51] Question: 2Q upside and full year guidance - The Q2 beat was primarily due to operational factors and tax timing, with tariff expense timing affecting the outlook [58][60] Question: Pricing increases tracking - Price increases have been realized as expected, with a one-for-one offset between price and volume [66][67] Question: Tariff impacts and USMCA compliance - Current estimates for annualized gross tariff costs are around $800 million, with ongoing efforts to mitigate these costs [34][75] Question: Customer buying patterns and inventory levels - Inventory levels are healthy and in line with historical norms, with no significant destocking expected [79][80] Question: Outdoor segment performance - The outdoor segment experienced a later start to the season but is seeing improved POS activity [84] Question: Craftsman brand performance - The Craftsman brand is performing in line with market trends, with opportunities for growth in the power tool space [90]

Financial Data and Key Metrics Changes - Non-GAAP earnings per diluted share increased to $0.19 from $0.12 year-over-year, exceeding guidance [13][37] - Net sales for the quarter were $584 million, down from $610 million in the same period last year, aligning with expectations [35] - Gross margin percentage was 42.2%, slightly down from 42.5% in the previous year [35][36] - Non-GAAP net income for the first quarter was $8.4 million compared to $5.8 million in the previous year [37] - Ending cash and availability was approximately $740 million, indicating a strong financial position [13][38] Business Line Data and Key Metrics Changes - Wholesale segment net sales decreased to $563 million from $598 million year-over-year [35] - Retail segment net sales increased to $36 million from $31 million in the previous year [35] - Key owned brands, including DKNY, Karl Lagerfeld, and Donna Karan, experienced double-digit growth, offsetting losses from exited businesses [5][14] Market Data and Key Metrics Changes - International markets are seen as significant growth opportunities, particularly in Europe [14][22] - The brand Donna Karan saw nearly 50% sales growth, with strong performance in dresses and suit separates [15][16] - DKNY and Karl Lagerfeld also reported strong sales growth, particularly in North America and Europe [20][22] Company Strategy and Development Direction - The company is focused on driving growth through its owned brands, which are expected to be sustainable long-term profit drivers [13][14] - Strategic initiatives include sourcing diversification, vendor negotiations, and selective price increases to mitigate tariff impacts [7][39] - The company is also enhancing its omni-channel capabilities and optimizing its global store footprint [30][31] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism about the consumer environment despite macroeconomic uncertainties [6][33] - The potential unmitigated tariff impact for fiscal 2026 is estimated at approximately $135 million, with ongoing efforts to mitigate this through various strategies [7][39] - The company remains committed to investing in key owned brands and growth initiatives despite challenges [12][33] Other Important Information - The company successfully renegotiated favorable lease terms for corporate offices and is streamlining its warehouse network [11] - The planned relaunch of the Sonya Riquel brand was postponed due to uncertainties in the operating environment [12][54] Q&A Session Summary Question: Pricing Power and Areas for Price Increases - Management indicated strong cooperation from retailers in adjusting pricing, focusing on areas where consumers will accept price increases [45][46] Question: Impact of Sonya Riquel Postponement on Guidance - The decision to postpone the Sonya Riquel launch was made to avoid losses, but strength in other brands allows the company to maintain its sales guidance [53][54][75] Question: Inventory Levels and Supply Chain Challenges - Inventory levels are expected to align with sales growth, with management actively managing inventory purchases in light of supply chain disruptions [78][80] Question: Promotions and Consumer Demand - Management does not anticipate significant pressure on promotions, citing strong demand for their products and effective management of inventory levels [84][85]

Financial Data and Key Metrics Changes - The company reported total revenue of $474 million for Q1 2026, an increase of approximately 4% year-over-year, driven by a 5% growth in comparable sales, marking the third consecutive quarter of positive comps [30][31] - Adjusted gross margin for the quarter was 46.7%, a decline of 90 basis points compared to the previous year, primarily due to a shift towards higher price point but lower margin products [32] - SG&A expenses were 52.5% of sales, improving by 170 basis points year-over-year, driven by reduced occupancy and bonus expenses along with cost-saving initiatives [33] Business Line Data and Key Metrics Changes - Journeys led the business with comparable sales up 8%, while Schuh saw a 1% increase, and Johnston and Murphy experienced a 2% decline in comps [30][31] - Journeys' strong performance was attributed to a strategic focus on product assortment and brand partnerships, resulting in double-digit gains across several brands [14][23] - Schuh's comps increased due to improved brand access and digital capabilities, with over 40% of sales coming from e-commerce [18] Market Data and Key Metrics Changes - The consumer environment remains choppy, with consumers showing willingness to shop during key events but retreating during quieter periods [5][28] - The UK consumer market is under pressure, impacting Schuh's performance, while Johnston and Murphy faced challenges in factory store traffic [19][28] Company Strategy and Development Direction - The company is focused on diversifying its product offerings and strengthening its brand partnerships, particularly in the athletic category, to capture a broader teen market [22][23] - The strategic growth plan for Journeys includes enhancing product assortment, elevating customer experience through new store designs, and increasing brand awareness through marketing initiatives [26][68] - The company is actively mitigating tariff impacts by diversifying suppliers and adjusting inventory strategies [12][11] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating the current trade environment and emphasized the importance of compelling footwear and freshness to drive consumer purchases [7][10] - The company reiterated its full-year EPS guidance of $1.3 to $1.7, acknowledging ongoing macroeconomic uncertainties and the impact of tariffs [38][39] - Management expects positive comps for Journeys in Q2, despite challenges in other business segments [56][58] Other Important Information - The company ended the quarter with a negative free cash flow of $120 million, attributed to higher capital spending and inventory growth to meet consumer demand [36][37] - The company repurchased approximately 605,000 shares during the quarter, representing about 5% of its outstanding shares [37] Q&A Session Summary Question: Can you talk about the impacts of new athletic brand relationships on Q1 comp? - Management noted that existing brands drove the comp, but new brands like HOKA and Saucony had a positive impact, validating Journeys' position in lifestyle running [46][48] Question: How did vulcanized product trends compare to expectations? - Management acknowledged pressure on vulcanized products but stated that strength in other brands offset this pressure [50][51] Question: What is the guidance for Journeys in Q2? - Management indicated that Journeys is tracking similarly to Q1, with expectations for a positive comp, despite challenges in other segments [56][58] Question: What are the drivers for Journeys in the back half of the year? - Management highlighted the focus on product assortment, store remodels, and marketing initiatives as key drivers for growth [60][68] Question: How does the company view recent M&A activity in the footwear landscape? - Management stated that the company is positioned differently from competitors focused on performance athletic, emphasizing lifestyle and style-driven strategies [77][78] Question: What are the impacts on gross margin and balancing price increases? - Management explained that the shift to athletic products has affected margins, but they are working with brand partners to manage costs and maintain profitability [79][80]

Financial Data and Key Metrics Changes - In Q1 2025, the company reported net revenues of $1.73 billion, achieving a positive comp of 3.4%, exceeding expectations [38] - Operating margin was 16.8%, with earnings per share (EPS) of $1.85, reflecting an earnings growth of 8.8% [6][42] - Gross margin was 44.3%, which was 360 basis points lower than the previous year when accounting for a $49 million out of period adjustment [39] Business Line Data and Key Metrics Changes - Pottery Barn achieved a positive comp of 2% in Q1, with a five-year comp of 46.7% [17] - The Williams Sonoma brand reported a strong quarter with a positive comp of 7.3% and a five-year comp of 36.9% [23] - The B2B program grew by 8%, marking another record-breaking quarter [9] Market Data and Key Metrics Changes - The home furnishings industry contracted approximately 3% in Q1, while the company gained market share [38] - Retail channel comps were up 6.2%, and e-commerce comps increased by 2.1% [38] Company Strategy and Development Direction - The company is focused on three key priorities: returning to growth, elevating customer service, and driving earnings [7][13] - A strong pipeline of new products and strategic collaborations are emphasized to drive brand growth [8] - The company is actively managing tariff impacts through a six-point plan, including cost concessions from vendors and sourcing goods from lower tariff countries [15][16] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating macroeconomic uncertainties and is optimistic about gaining market share in 2025 [13][52] - The company is committed to enhancing customer experiences and operational efficiencies, with a focus on AI integration across digital platforms [10][12] Other Important Information - The company plans to spend between $250 million and $275 million in capital expenditures for fiscal year 2025, prioritizing e-commerce and supply chain efficiency [50] - The quarterly dividend was increased by 16% year-over-year, marking the sixteenth consecutive year of increased payouts [51] Q&A Session Summary Question: Merchandise margins decline - Management clarified that merchandise margins were impacted by higher input costs but offset by supply chain efficiencies and occupancy leverage [58][60] Question: Pricing strategy regarding tariffs - The company emphasized a reduced promotional strategy and a focus on value beyond just price, leveraging direct vendor relationships for better pricing [64][66] Question: Inventory position and its impact on sales - The inventory was strategically increased by 10% to mitigate tariff impacts, with a focus on being in stock to drive sales [86][90] Question: Demand trends throughout the quarter - Management noted strong results across all brands, with furniture achieving positive comps for the first time in nine quarters [77][105] Question: Reducing exposure to China - The company has proactively reduced sourcing from China and is flexible in adjusting sourcing strategies based on the trade environment [81] Question: Tariff mitigation costs - Management explained that tariff mitigation costs were short-term expenses, with expectations of future benefits from proactive inventory management [99][101]