Financial Data and Key Metrics Changes - The company reported a total revenue growth of 11% in the first quarter, exceeding the high single-digit outlook, driven by strong performance in direct-to-consumer channels [21][22] - Adjusted gross margin expanded by 160 basis points to 72.1%, attributed to average unit retail (AUR) growth, favorable mix shift towards full-price and international businesses, and lower cotton costs [23][24] - Adjusted operating margin increased by 230 basis points to 16.6%, with operating profit rising by 29%, both ahead of guidance [25] Business Line Data and Key Metrics Changes - Core product sales, which represent over 70% of the business, grew in the mid-teens, driven by seasonal sweater polos and lightweight outerwear [12][13] - High potential categories, including women's apparel, outerwear, and handbags, saw strong double-digit growth, outpacing total company growth [13][14] - Direct-to-consumer (DTC) retail comps increased by 13%, with double-digit growth in both digital and brick-and-mortar stores [15][16] Market Data and Key Metrics Changes - Asia led performance with a 19% increase in revenue, followed by Europe at 10% and North America at 8% [22][23] - China experienced over 30% growth, driven by strong consumer response to brand-building initiatives [30][31] - North America maintained healthy trends with high single-digit growth, supported by strong DTC channels [17][26] Company Strategy and Development Direction - The company focuses on three long-term strategic pillars: elevating the lifestyle brand, driving core products, and winning in key cities with a consumer ecosystem [8][15] - Continued investment in technology, AI, and analytics to enhance consumer service and operational efficiency [7][18] - The company aims to expand its presence in key city ecosystems globally, leveraging brand desirability and diverse growth drivers [5][19] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strong start to the fiscal year but remains cautious about the second half due to potential tariff-related pressures on consumer behavior [7][22] - The company anticipates low to mid-single-digit revenue growth for the full year, with a focus on the first half being stronger [33][34] - Management highlighted the importance of operational discipline and agility in navigating a dynamic macro environment [39] Other Important Information - The company ended the quarter with $2.3 billion in cash and short-term investments, and $1.6 billion in total debt [31] - Inventory increased by 18% year-over-year, reflecting strong global demand and strategic receipt pull-forwards to mitigate tariff impacts [32][90] - The company plans to exit 90 to 100 wholesale doors in fiscal 2026, with approximately half related to Hudson's Bay [26] Q&A Session Summary Question: What have been the largest drivers of upside and how sustainable are they? - Management noted the shift towards a more elevated full-price consumer base and the resilience of core consumers across regions as key drivers [44][45] Question: Can you walk us through your updated guidance assumptions? - The updated guidance reflects over-delivery in Q1 and a better outlook for Q2, with tariff impacts remaining broadly in line with previous guidance [54][56] Question: What is the outlook for the handbag business? - The handbag category is seen as a high potential growth area, with strong initial responses to recent product launches [60][62] Question: How much of the inventory increase was driven by tariffs? - The inventory increase was partially due to strategic pull-forwards related to tariffs, but overall inventory growth is expected to align with revenue growth [90][92] Question: Can you quantify the tariff impact on gross margin this year? - Tariffs are the biggest headwind for gross margin, but management is confident in offsetting this pressure through various growth strategies [97][99]

Core Viewpoint - CTFJ reported a 1.9% YoY decline in retail sales value (RSV) for 1QFY26, indicating a sequential recovery after previous weaknesses, supported by a net reduction of 311 stores, reflecting effective strategies to close underperforming locations and redirect traffic to better-performing stores [1][2] Group 1: Financial Performance - The RSV decline of 1.9% YoY during April to June 2025 aligns with preliminary figures, with June showing slightly worse performance than May due to earlier festivals and sales campaigns [2] - Despite the decline, CTFJ's strategies are expected to lead to a positive same-store sales growth (SSSG) for FY26, with a target of mid-single-digit growth [2][6] Group 2: Store Performance and Strategy - CTFJ experienced a net closure of 307 stores in 1QFY26, bringing the total to 6,337 stores, a 16% YoY reduction, primarily affecting franchised stores in lower-tier cities [3] - The SSSG of franchised stores remained flat, outperforming self-operated stores, indicating successful resource reallocation from closed underperforming stores [3] Group 3: Brand Development - CTFJ is focusing on wealthier market segments with the launch of premium product lines, such as the CTF Joie Collection and High Jewellery Collection, which could enhance brand value and boost sales of mainstream products [4] Group 4: Valuation and Outlook - The target price (TP) has been raised to HK$15.2 based on a 15x FY27E P/E, reflecting confidence in CTFJ's strategies to maintain its market leadership and improve earnings through better SSSG and reduced gold hedging losses [6] - The expected FY26E dividend yield of 5.6% is considered attractive [6]

Financial Data and Key Metrics Changes - Q1 2025 recorded the strongest adjusted EBITDA performance in the company's history at $5.6 million, indicating successful operational discipline [6][17] - Total revenue for Q1 was approximately $66 million, down 18% year over year, with subscription revenue at $21 million, down 26% [18] - Travel revenue decreased to $42 million, down 16%, attributed to a lower member count and timing impacts related to curated experiences [20] Business Line Data and Key Metrics Changes - The company had over 11,000 members at the end of Q1, with approximately 10,200 active club members and 1,300 active Pass members [18] - Pass subscriptions now represent about 10% to 15% of the total membership base, reflecting a strategic shift towards club growth and profitability [19] Market Data and Key Metrics Changes - The company maintained a strong occupancy level of 74% in controlled residence accommodations, with an 8% increase in Average Daily Rate (ADR) to over $2,100 [20] Company Strategy and Development Direction - The company is focused on operational efficiency, brand elevation, member experience, and building a robust technology and digital marketing platform [8][10][14] - The strategic decisions made over the past year are translating to stronger financial results, with a focus on balancing investment for future growth with operational efficiencies [22] Management's Comments on Operating Environment and Future Outlook - Management expects continued revenue headwinds throughout the year but is optimistic about future enhancements to the Pass product [19] - The company is reiterating its full-year 2025 guidance, expecting adjusted EBITDA between breakeven and $5 million, and revenue between $235 million and $255 million [21] Other Important Information - The company is building a digital marketing platform to connect with luxury travelers and expand its total addressable market [15] - A new Chief Transformation Officer has been appointed to focus on operational efficiency [36] Q&A Session Summary Question: Update on marketing efforts to drive and retain members - The company is growing its sales force to reach a curated target audience and is building a robust technology platform to scale access to luxury travelers [26] Question: When and where do you see club memberships bottoming out? - Management expects continued headwinds on member count through the first half of the year, with stabilization anticipated in the second half and into 2026 [29][30] Question: Is there much left to cut in expenses? - The company is now focused on fine-tuning expenses and improving service quality, with significant opportunities for operational efficiency still ahead [34][36] Question: Major milestones targeted for 2025 - Key goals include achieving sustained profitability, establishing operational efficiency as a core competency, and launching a digital marketing platform [38]

Financial Data and Key Metrics Changes - The company reported Q4 net sales of $942 million, a 1% increase in constant currency compared to Q4 last year, which was up 21% versus 2019 [5][27] - Gross margin improved to 60.2%, up 30 basis points from the prior year, driven by disciplined promotion and discount strategies [5][75] - Adjusted EBITDA for Q4 reached $195 million, with a record EBITDA margin of 20.7%, up 160 basis points year-over-year [7][71] - Free cash flow generation for the quarter was $135 million, an increase of $3 million from Q4 2023 [7][73] - For the full year, adjusted net income was $3.7 billion, slightly down from $3.92 billion the previous year [29][77] Business Line Data and Key Metrics Changes - The Samsonite brand saw a 4.6% increase in Q4, while Tumi was up 4.4% in the same period, indicating strong recovery post-pandemic [12][20] - American Tourister experienced a decline of 6.9% in Q4, but was up 1.3% when excluding India [14][15] - Non-travel product categories continued to grow, with a 2% increase overall across all brands [82] Market Data and Key Metrics Changes - In Asia, sales were down 6% in Q4, with India significantly impacting results, showing a decline of 27% [8][9] - North America showed improvement, with sales up 3.9% in Q4 compared to a decline of 8% in Q3 [10] - Europe delivered a solid performance with a 5.6% growth in Q4, while Latin America continued to grow at 14% [11][24] Company Strategy and Development Direction - The company is focused on brand elevation and maintaining a disciplined approach to expenses, with a commitment to managing costs effectively while expanding [6][30] - There is a strategic emphasis on direct-to-consumer (DTC) channels, which saw a slight increase in mix, contributing to gross margin benefits [29][50] - The company plans to continue investing in non-travel categories and expanding its retail footprint, particularly in Asia and Europe [25][53] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about travel trends remaining robust, which is expected to drive long-term growth [91] - There are positive signs of recovery in India, with expectations for improvement in Q1 2025 [9][80] - The company is monitoring consumer sentiment closely, especially in the premium and luxury segments, which have shown some softness [37][81] Other Important Information - The company has made significant progress in sustainability, with 40% of products incorporating recycled materials [63][67] - The company has a strong liquidity position with over $1.4 billion available as of year-end [74][86] - The company is celebrating Tumi's 50th anniversary with new product launches and marketing campaigns [59][60] Q&A Session Summary Question: What are the expectations for travel trends in the coming years? - Management indicated that travel trends are expected to remain robust, which will help deliver long-term growth for the business [91] Question: How is the company addressing the challenges in the Indian market? - Management noted that while India faced significant challenges, there are signs of stabilization and positive trends expected in Q1 2025 [9][80] Question: What is the company's strategy regarding sustainability? - The company highlighted its commitment to sustainability, with significant progress in incorporating recycled materials into products and achieving a strong sustainability rating [63][67]