Financial Data and Key Metrics Changes - In Q2 of fiscal 2025, consolidated net sales were $403 million, down from $420 million in Q2 of fiscal 2024, aligning with guidance of $395 million-$415 million [5] - Adjusted gross margin contracted by 160 basis points to 61.7%, impacted by approximately $9 million in increased cost of goods sold due to tariffs [5] - Adjusted operating profit was $28 million, representing a 7% operating margin, compared to $57 million and a 13.5% margin in the prior year [5] Business Line Data and Key Metrics Changes - Lilly Pulitzer experienced a low single-digit positive comp, while total sales were down modestly due to lower wholesale sales [5] - Tommy Bahama faced a high single-digit negative comp, with performance particularly weak in Florida, but improvements were noted in the West [5][4] - Johnny Was continued to face challenges, with low double-digit negative comps, prompting a comprehensive plan for performance improvement [4] - Emerging Brands Group showed solid revenue growth, driven by new stores and positive comp store sales [4] Market Data and Key Metrics Changes - Sales in full-price brick-and-mortar locations decreased by 6%, with a negative comp of 7%, partially offset by new store openings [5] - E-commerce sales declined by 2%, while outlet locations saw a 4% decrease [5] - Food and beverage locations performed better, showing modest year-over-year sales growth [5] Company Strategy and Development Direction - The company is focused on mitigating tariff exposure through supply chain shifts and early product deliveries [4] - Long-term investments are ongoing, including the Lyons, Georgia distribution center, expected to be operational by late fiscal 2025 or early fiscal 2026 [4] - The company aims to enhance brand storytelling and marketing, particularly for Johnny Was, to re-establish momentum [4] Management's Comments on Operating Environment and Future Outlook - The macroeconomic environment remains pressured, characterized by higher tariffs and cautious consumer behavior [3] - Management expressed confidence in the ability to navigate challenges and maintain brand strength, with a focus on execution and customer happiness [3] - For the remainder of fiscal 2025, net sales are expected between $1.475 billion and $1.515 billion, reflecting a decline of 3% to slightly negative compared to fiscal 2024 [6] Other Important Information - The company anticipates a gross margin contraction of approximately 200 basis points for fiscal 2025, primarily due to tariffs [6] - Adjusted EPS is expected to be between $2.80 and $3.20, down from $6.68 in the previous year [6] Q&A Session Summary Question: What is driving the positive comparable store sales performance? - Management noted that all brands contributed positively, with Lilly Pulitzer showing strong performance and Tommy Bahama improving from previous quarters, primarily driven by increased traffic [9] Question: How are promotions being planned for the back half of the year? - Promotions will follow historical patterns, with adjustments made as necessary, and a focus on maintaining price and brand integrity [10][11] Question: How are pricing strategies evolving in response to tariffs? - The company is implementing selective price increases on an item-by-item basis, with a focus on covering gross margin dollars without overextending [20] Question: What is the outlook for wholesale partnerships? - Strong relationships with wholesale partners are emphasized, with positive feedback on pricing strategies, indicating potential for consumer acceptance [28] Question: What are the expectations for capital expenditures in fiscal 2026 and beyond? - After completing the Lyons project, ongoing capital expenditures are expected to be around $75 million, depending on store openings [64]