Financial Data and Key Metrics Changes - The company's second quarter revenue growth was 14%, exceeding the high single-digit outlook, with total adjusted gross margin expanding 70 basis points to 67.7% [18][19] - Adjusted operating margin increased 210 basis points to 13.5%, with adjusted operating income rising by 34% [19][20] - The company ended the period with $1.6 billion in cash and short-term investments and $1.2 billion in total debt, with net inventory increasing 12% year-over-year, aligning with revenue growth [23][24] Business Line Data and Key Metrics Changes - Core product sales, representing over 70% of the business, grew mid-teens, driven by strong performance in various categories including sweaters and jackets [11][12] - High-potential categories such as women's apparel, outerwear, and handbags saw strong double-digit growth, outpacing total company growth [11][12] - The direct-to-consumer (DTC) segment delivered strong comp growth across regions, with global comps increasing 13% [13][14] Market Data and Key Metrics Changes - Asia led growth with sales up mid-teens, particularly in China, which grew more than 30% [14][22] - North America revenue increased 13%, with retail comps also up 13%, driven by strong performance in both direct-to-consumer and wholesale businesses [20][21] - Europe revenue increased 15%, with retail comps up 10%, reflecting ongoing brand strength [21][22] Company Strategy and Development Direction - The company introduced the "Next Great Chapter Drive Plan," aiming to capture a larger share of the $400 billion premium and luxury market, currently holding less than 2% market share [4][5] - Strategic initiatives include elevating the lifestyle brand, driving core products, and expanding in key cities [5][13] - The company is focused on investing in brand-building activations and enhancing consumer engagement through innovative tools like the AI styling assistant [15][33] Management's Comments on Operating Environment and Future Outlook - Management remains cautious about the second half of the year due to potential consumer headwinds and macroeconomic volatility, but is confident in capturing market share opportunities [6][18] - The company raised its full-year revenue guidance to a range of 5%-7%, reflecting better-than-expected performance in the first half [24][25] - Management emphasized the resilience of the core consumer and the ongoing demand for the brand, despite macroeconomic pressures [32][34] Other Important Information - The company plans to exit 90-100 wholesale doors in fiscal 2026, with a focus on elevating brand presence and reducing off-price sales [21][22] - Recent marketing investments normalized at 7.8% of sales, down from 8.7% the previous year, with expectations to maintain around 7.5% for fiscal 2026 [19][20] - The company is committed to leveraging its strong balance sheet for strategic growth investments and shareholder returns, having repurchased $313 million in shares this fiscal year to date [23][24] Q&A Session Summary Question: Updated outlook for consumer health and macro assumptions - Management noted strong momentum in business and no significant changes in consumer behavior, maintaining a focus on full-price customer recruitment [31][32] Question: Pricing strategy and ability to mitigate tariffs - The company continues to leverage pricing as a growth driver and expects to mitigate tariff impacts through strategic actions [37][40] Question: Engagement strategies for North America value-oriented consumers - Management highlighted flexibility in pricing architecture and targeted marketing to appeal to value-sensitive consumers during the holiday season [42][45] Question: AUR growth and unit sales - The company has seen consistent AUR growth and is focusing on unit growth in targeted areas, while navigating macro pressures [48][50] Question: North America wholesale trajectory - Management expressed confidence in the underlying quality growth of the wholesale business, despite planned reductions in off-price sales [52][56] Question: Performance in outlet versus full-price stores - Consistent growth was observed across full-price and outlet stores, with a focus on expanding full-price locations while consolidating outlet presence [58][59]