Financial Data and Key Metrics Changes - In Q3, the company reported a net revenue growth of 7%, with international markets contributing approximately 75% of this growth and the U.S. contributing 25% [17][18] - Gross margin reached a record 61.7%, expanding 110 basis points year-over-year, despite an 80 basis point headwind from tariffs [19][20] - Adjusted EBIT margin was 11.8%, with adjusted diluted EPS at $0.34, both exceeding expectations [21] Business Line Data and Key Metrics Changes - Direct-to-consumer (DTC) sales grew 9%, driven by strong performance in both stores and online, with e-commerce up 16% [11][12] - Women's business grew 12% year-to-date, while men's business grew 5% [9][10] - The tops category saw notable growth, with overall tops up 9% and women's tops up 8% [81] Market Data and Key Metrics Changes - The U.S. market grew 3%, while international business was up 9%, led by double-digit growth in Asia [6][14] - In Europe, net revenues increased by 3%, with strong performance in the UK [22] - Asia's net revenues accelerated to up 12%, with double-digit growth in both DTC and wholesale [22] Company Strategy and Development Direction - The company is pivoting to a DTC-first strategy, focusing on becoming a head-to-toe denim lifestyle retailer [5][7] - Continued investment in marketing campaigns and strategic partnerships is aimed at enhancing brand relevance and expanding market share [6][7] - The company is also focusing on premiumization efforts, rolling out the Blue Tab premium collection [11] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's momentum despite a complex external environment, citing strong consumer demand and effective strategies [16][45] - The company anticipates continued growth in the denim category and plans to leverage its market leadership to capture more share [42][45] - For Q4, the company expects organic net revenue growth of approximately 1%, with reported net revenues down about 3% due to non-comparable items [26][27] Other Important Information - The company returned $151 million to shareholders in Q3, a 118% increase year-over-year, and declared a dividend of $0.14 per share, up 8% [23][24] - Inventory levels were up 12% in dollar terms, driven by investments ahead of the holiday season [24] Q&A Session Summary Question: European momentum and Q4 guidance - Management noted that Europe grew 3% in Q3, with strong performance in key markets like the UK and Germany, and expects mid-single-digit growth for the year [32][33] - Q4 guidance reflects the impact of the 53rd week and tariffs, with a conservative approach due to macro uncertainties [35] Question: Momentum entering the season - Management confirmed no material change in demand trends, emphasizing strong positioning for the holiday season [41][42] Question: Wholesale business growth drivers - Growth in the wholesale channel was driven by existing accounts responding positively to fashion fits, with women's business outperforming [65][66] Question: SKU rationalization and inventory management - The company has reduced SKUs by about 15% compared to last year while expanding its lifestyle assortment, leading to higher productivity per SKU [74][75]