Financial Data and Key Metrics Changes - The company reported net sales of approximately $129 million, reflecting a growth of about 12% on a constant currency basis and 10.1% year-over-year [7][30] - Adjusted EBITDA for the first quarter was $2.7 million, a significant increase from $900,000 in the same period last year, with an adjusted EBITDA margin of 2.1% compared to 0.7% [10][33] - Gross margin expanded by 100 basis points to 57.2% compared to 56.2% in the same period last year, driven by higher full-price selling and improved inventory position [31][32] Business Line Data and Key Metrics Changes - The U.S. business grew by 14% year-over-year, marking the seventh consecutive quarter of growth [7][30] - Australia and New Zealand region saw revenue growth of over 6%, attributed to strategic initiatives and improved macro conditions [8][30] - Princess Polly, the largest brand, continues to perform strongly, with double-digit revenue growth driven by trend-forward styles and successful marketing campaigns [17][20] Market Data and Key Metrics Changes - The active customer base increased by nearly 8% over the trailing twelve months, reaching 4.13 million by the end of the first quarter [8][30] - Average order value rose to $78, reflecting a 1.3% increase compared to the previous year [30] - The company reported a total of 1.66 million orders in the first quarter, a 9.2% increase year-over-year [30] Company Strategy and Development Direction - The company is focused on expanding its total addressable market through direct-to-consumer channels and physical retail investments [15][19] - A three-pronged approach to tariffs includes leveraging relationships with partners in China, diversifying the supply chain, and selectively increasing prices [10][11][44] - The company aims to streamline operations and strengthen its financial foundation while navigating the current macro environment [16][39] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating the current macro environment and anticipates limited exposure to China by the fourth quarter [12][53] - The company expects solid demand trends to continue into the second quarter, with net sales projected between $154 million and $158 million [36][38] - Management believes the impact of tariffs will be transitory, with a return to normalized margins expected in the fourth quarter [47][48] Other Important Information - The company ended the first quarter with $26.7 million in cash and cash equivalents, an increase from $24.2 million a year ago [34] - Inventory at the end of the quarter was $94.4 million, a 3% increase compared to the previous year, well below the 10% net sales growth [35] - The company plans to open six additional stores in 2025, with three new stores expected in late Q2 [32][35] Q&A Session Summary Question: Can you provide insights on margins and the impact of tariffs? - Management discussed the diversified supply chain strategy and selective pricing actions to mitigate tariff impacts, expecting a return to normalized margins in Q4 [41][44][47] Question: What are the demand trends and growth expectations for the second half of the year? - Management indicated confidence in continued growth, particularly in the U.S., despite potential challenges in Australia due to tough comparisons [53][56] Question: How sustainable is the growth in the U.S. market? - Management expressed confidence in sustaining growth through new customer acquisition and expanding wholesale partnerships [61][64] Question: What are the long-term plans for store expansion? - Management confirmed that new stores are performing well and driving new customer growth, with plans to maintain current expansion pacing [72][73] Question: How is the company addressing cost profiles with new suppliers? - Management noted that while there may be slight differences in costs with new suppliers, they are confident in achieving competitive pricing and maintaining quality [67][69]

Financial Data and Key Metrics Changes - The company reported a net sales increase of approximately 12% on a constant currency basis to $129 million, marking the fourth consecutive quarter of growth [7][30] - Adjusted EBITDA for the first quarter was $2.7 million, a significant increase from $900,000 in the same period last year, with an adjusted EBITDA margin of 2.1% compared to 0.7% [9][33] - Gross margin expanded by 100 basis points to 57.2% compared to 56.2% in the same period last year, driven by higher full-price selling and improved inventory position [31][33] Business Line Data and Key Metrics Changes - The U.S. business grew by 14.2% year over year, while Australia and New Zealand saw a revenue growth of 6.2% [30][31] - The active customer base increased by 7.8% year over year, reaching 4.13 million by the end of the first quarter [30] - Princess Polly, the largest brand, continues to perform strongly, with double-digit revenue growth driven by trend-forward styles and successful marketing campaigns [15][16] Market Data and Key Metrics Changes - The company experienced a 9.2% increase in total orders for the first quarter, indicating strong customer demand [30] - The omnichannel expansion is on track, with Princess Polly opening its seventh store in SoHo, which was the strongest opening to date [8][15] - The company is diversifying its supply chain, anticipating minimal exposure to China by the fourth quarter, with production shifting to countries like Vietnam and Turkey [10][12] Company Strategy and Development Direction - The company laid out three key priorities for 2025: attracting and retaining customers through direct-to-consumer channels, expanding brand awareness through physical retail investments, and streamlining operations [14][15] - The strategic focus includes leveraging a test and repeat model for inventory management and enhancing customer connections through innovative marketing [9][14] - The company aims to build a robust supply chain to mitigate tariff impacts and enhance long-term competitiveness [10][13] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating the current macro environment and believes the impact of tariffs will be transitory [28][36] - The company anticipates continued solid demand trends in the second quarter, with net sales expected to be between $154 million and $158 million [36][38] - Management remains focused on building durable and resilient fashion brands while delivering value to stakeholders [39] Other Important Information - The company ended the first quarter with $26.7 million in cash and cash equivalents, an increase from $24.2 million a year ago [34] - Inventory at the end of the quarter was $94.4 million, a 3% increase compared to the previous year, which is below the 10% net sales growth [35] - The company has a stock buyback program with approximately $1.1 million remaining in authorization [35] Q&A Session Summary Question: Can you provide insights on guidance for revenues and adjusted EBITDA, particularly regarding tariffs? - Management discussed their approach to tariffs, emphasizing a diversified supply chain and selective pricing actions to mitigate impacts [41][43][44] Question: Will the company be completely out of China by the fourth quarter? - Management confirmed that they expect to be predominantly out of China by Q4, while maintaining some relationships for servicing other regions [51][52] Question: What are the demand trends expected for the second half of the year? - Management indicated positive growth in Australia and continued strong performance in the U.S., with expectations for growth to resume in Q3 [53][55] Question: How sustainable is the growth in the U.S. business? - Management expressed confidence in the sustainability of growth, supported by strong customer metrics and new store openings [60][62] Question: What are the long-term plans for store openings and wholesale partnerships? - Management highlighted the success of new stores in driving customer acquisition and expressed optimism about expanding wholesale partnerships, particularly with Dillard's [70][74]