Financial Data and Key Metrics Changes - Adjusted EBITDA for the full year rose more than $10 million to $24.9 million, with almost $17 million in positive free cash flow, a $42 million improvement over fiscal 2024 [4][16] - Net sales for the fourth quarter were $215.9 million, a decline of 10.5%, with a gross margin expansion of 890 basis points to 53% [17][18] - Full-year net sales were $565.2 million, a decline of 9.8%, with adjusted EBITDA reaching $24.9 million, marking a $10.3 million improvement [21][19] Business Line Data and Key Metrics Changes - Men's and women's apparel drove strong margin improvements despite year-over-year sales declines, with notable growth in outerwear and the Souped-Up Sweats collections [6][22] - Retail channel sales grew by 3.5%, fueled by comparable sales growth and the launch of two new stores, while the direct channel saw a 16% decline for the full year [22][21] - SG&A expenses for the year were $310.5 million, which is $27.1 million or 8% lower than last year [24] Market Data and Key Metrics Changes - Mobile sales penetration increased by 160 basis points, while the retail channel outperformed the direct channel due to lower price sensitivity among retail customers [21][22] - The promotional reset resulted in declines in both men's and women's sales, with drops of 9.2% and 9.7% respectively, but profitability improved across product categories [22][23] - Inventory at year-end was $131.3 million, a $35.2 million or 21.1% reduction compared to the prior year [25] Company Strategy and Development Direction - The company is focused on building brand awareness with a full funnel marketing approach and enhancing operational efficiency through inventory management and SKU reduction [11][10] - Future plans include further investments in the Adairsville fulfillment center to boost productivity and streamline logistics [9][32] - The company aims to stabilize sales through increased assortment productivity and strengthen its brand to retain existing customers while acquiring new ones [33] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's stronger financial and operational position entering 2026, with improved liquidity and inventory levels [14][27] - The outlook for fiscal year 2026 projects net sales in the range of $540 million-$560 million, anticipating a decline in the first half followed by stabilization in the second half [28][29] - Management highlighted the importance of maintaining disciplined promotional strategies and efficient inventory management to offset tariff impacts [11][31] Other Important Information - The company has completed the first two phases of streamlining fulfillment operations, closing two fulfillment centers to enhance efficiency [9] - Capital expenditures for the year were $17.8 million, with funds allocated primarily to investments in warehouse management and new store openings [26] Q&A Session Summary Question: Why is the retail channel holding up better than online? - Management attributed the strength in the retail channel to greater resilience and less price sensitivity among customers, along with strategic inventory allocation [36][37] Question: Why is there a projected decline in the first half of the year? - The decline is primarily driven by the digital channel, especially due to the promotional reset [39] Question: Can inventory turns improve to four times a year? - Management indicated that SKU reduction and improved supply chain efficiency could enhance inventory turns over time [40][41]

Financial Data and Key Metrics Changes - Adjusted EBITDA for the full year rose more than $10 million to $24.9 million, with almost $17 million in positive free cash flow, a $42 million improvement over fiscal 2024 [4][17] - Net sales for the fourth quarter were $215.9 million, a decline of 10.5%, with a gross margin expansion of 890 basis points to 53% [18][19] - Full-year net sales were $565.2 million, a decline of 9.8%, with adjusted EBITDA reaching $24.9 million, marking an improvement of $10.3 million [20][21] Business Line Data and Key Metrics Changes - Men's and women's apparel drove strong margin improvements despite year-over-year sales declines, with notable growth in outerwear and the Souped-Up Sweats collections [6][23] - Retail channel sales grew by 3.5%, fueled by comparable sales growth and the launch of two new stores, while the direct channel experienced a 16% decline for the full year [23][24] - SG&A expenses for the year were $310.5 million, which is $27.1 million or 8% lower than last year, with a successful target of $10 million in expense savings [25] Market Data and Key Metrics Changes - Mobile sales penetration increased by 160 basis points, indicating a shift in consumer purchasing behavior [22] - The promotional reset resulted in a decline in both men's and women's sales, with drops of 9.2% and 9.7% respectively, but profitability improved across product categories [23][24] - Inventory at year-end was $131.3 million, a $35.2 million or 21.1% reduction compared to the prior year [26] Company Strategy and Development Direction - The company is focused on building pricing and margin integrity through promotional resets, efficient inventory management, and SKU reduction [12][34] - A full funnel marketing approach is being implemented to reactivate the customer base, build retention, and attract new customers [14][34] - The company plans to enhance its logistics network and streamline fulfillment operations, with significant investments in the Adairsville fulfillment center [10][33] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's stronger financial and operational position entering 2026, with better liquidity and improved inventory levels [15][28] - The outlook for fiscal year 2026 projects net sales in the range of $540 million-$560 million, anticipating a decline in the first half followed by stabilization in the second half [28][29] - Management highlighted the importance of maintaining a disciplined promotional strategy and focusing on core products to drive future growth [34] Other Important Information - The company has completed the first two phases of streamlining and consolidating fulfillment operations, with plans for further productivity enhancements in 2026 [10][12] - The transition to an asset-based lending facility has resulted in lower borrowing costs and greater flexibility, strengthening the company's liquidity position [27][28] Q&A Session Summary Question: Why is the retail channel holding up better than online? - Management attributed the strength in the retail channel to greater resilience and less price sensitivity among customers, along with strategic inventory allocation that improved in-stock levels [36][38] Question: Why is there a projected decline in the first half of the year? - The decline is primarily driven by the digital channel, especially due to the promotional reset, while retail stores are expected to see positive bumps [40] Question: What improvements are expected in inventory turns? - Management indicated that improvements in SKU reduction and supply chain efficiency would enhance inventory turns over time [41][42]