Financial Data and Key Metrics Changes - Total net revenue rose 7% to $2.6 billion in Q3 on both a reported and constant currency basis, with comparable sales increasing by 2% [28] - Gross profit for Q3 was $1.43 billion, representing 55.6% of net revenue, down from 58.5% in Q3 2024, primarily due to a 290 basis point decrease in overall product margin [30] - Net income for the quarter was $307 million, or $2.59 per diluted share, compared to $2.87 for the third quarter of 2024 [31] Business Line Data and Key Metrics Changes - In the Americas, total revenue declined 2%, with the U.S. down 3% and Canada down 1% [12] - Men's revenue increased by 8%, women's revenue increased by 6%, and accessories and other grew by 12% [29] - Digital channel revenues increased by 13%, contributing $1.1 billion, or 42% of total revenue [29] Market Data and Key Metrics Changes - Revenue in China Mainland increased by 46%, or 47% in constant currency, with comparable sales increasing by 25% [29] - The rest of the world segment saw revenue grow by 19% on a reported and constant currency basis, with comparable sales increasing by 9% [29] - The company expects revenue growth in China Mainland to be at or above the high end of the guidance range of 20%-25% for the year [13] Company Strategy and Development Direction - The company is focused on three pillars: product creation, product activation, and enterprise efficiency to drive improvement in the U.S. business and maintain international momentum [20][21] - The leadership transition includes Marti Morfitt as Executive Chair and Meghan Frank and André Maestrini as co-CEOs until a new CEO is appointed [10] - The company aims to innovate new products and experiences while expanding into new markets and categories [9] Management's Comments on Operating Environment and Future Outlook - Management noted a slowdown in trends post-Thanksgiving but expects modest improvement in revenue trends in Q4 compared to Q3 [15] - The company anticipates challenges in operating margins due to increased tariffs and the removal of the de minimis provision, with a focus on efficiency [39][65] - Management expressed confidence in the leadership team and the action plan to drive growth and innovation [11][19] Other Important Information - The company ended the quarter with $1 billion in cash and cash equivalents, with no debt [28] - Capital expenditures for Q3 were approximately $167 million, primarily for business growth investments [32] - The company repurchased approximately 1 million shares at an average price of $181 during the quarter [32] Q&A Session Summary Question: Can you speak to the cadence of demand in the U.S. during Q3 and trends quarter to date? - Management indicated that demand progressed as expected, with August being the best month and October the softest, reflecting planned activities [45] Question: How did the segment perform this quarter, and what are the expectations for new product introductions? - Management noted pressure in the apparel space but highlighted a strong innovation pipeline and upcoming new product introductions [54] Question: Can you discuss the new product pipeline and its development based on customer research? - Management confirmed that product innovation begins with research focused on unmet needs, with a strong pipeline for performance categories [60] Question: What is the impact of the Amex partnership on sales and margins? - Management reported positive results from the partnership, with a focus on guest acquisition, although it remains a small part of the business [78] Question: How is the China business performing, particularly in e-commerce versus stores? - Management expressed satisfaction with the momentum in China, noting strong performance across all tier cities and effective brand activation [90]