Financial Data and Key Metrics Changes - Total net revenue for Q3 increased by 7% to $2.6 billion on both a reported and constant currency basis [27] - Comparable sales rose by 2% [27] - Gross profit for Q3 was $1.43 billion, representing 55.6% of net revenue, down from 58.5% in Q3 2024 [29] - Net income for the quarter was $307 million, or $2.59 per diluted share, compared to $2.87 for the third quarter of 2024 [30] Business Line Data and Key Metrics Changes - In the Americas, total revenue declined by 2%, with the U.S. down 3% and Canada down 1% [11] - International revenue increased by 33%, driven by a 46% growth in China Mainland [11][28] - Men's revenue increased by 8%, women's revenue increased by 6%, and accessories and other grew by 12% [28] Market Data and Key Metrics Changes - China Mainland revenue increased by 46%, with comparable sales up by 25% [28] - The rest of the world segment saw revenue grow by 19% on a reported and constant currency basis, with comparable sales increasing by 9% [28] - The company ended the quarter with 796 stores globally, with square footage increasing by 12% [28] 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 [19][26] - Plans to increase new style penetration to 35% in Spring 2026, with a strong pipeline of innovation [20][22] - The company aims to enhance the in-store experience and improve digital engagement to better connect with high-value guests [25] Management's Comments on Operating Environment and Future Outlook - Management noted a slowing trend in demand post-Thanksgiving, which has been factored into Q4 guidance [41] - The company expects revenue growth in Q4 to be below Q3 trends due to calendar shifts [12][33] - Management expressed confidence in the leadership team and the action plan to drive future growth [9][10] Other Important Information - The company has a strong balance sheet with $1 billion in cash and no debt, allowing for continued investment in growth initiatives [27] - The leadership transition is underway, with Calvin McDonald stepping down as CEO and Marty Morfitt serving as Executive Chair [5][9] Q&A Session Summary Question: Can you elaborate on the cadence of demand in the U.S. during Q3? - The quarter progressed as expected, with August being the best month and October the softest, aligning with prior expectations [41] Question: What are the implications of the product assortment changes for operating margins? - There will be puts and takes for operating margins, with a focus on expense savings and efficiencies [42] Question: How did the segments perform this quarter? - The company held share in premium athletic but lost some share in performance apparel due to changing guest behavior [44] Question: How much of the new product pipeline is informed by customer research? - The product innovation process is driven by research focused on unmet needs across various activity categories [47] Question: Can you discuss the performance of the China business? - The company continues to see strong momentum in China, with good performance across all tier cities [60]