Financial Data and Key Metrics Changes - The company reported strong performance with positive comparable sales, particularly in the Journeys business, which achieved high single to double-digit comps over the last four quarters, currently on a run rate of about 10% [4][10] - The company expects to unlock significant earnings potential that has been given up over the past few years, indicating a focus on growth and profitability [5][75] Business Line Data and Key Metrics Changes - The Journeys business has been a major driver of growth, with a focus on serving a larger customer market, particularly targeting the teen girl demographic [6][22] - The company has seen elevated average selling prices (ASPs) and improved product assortment, contributing to positive comp growth in Journeys [24][25] - The new store format, referred to as 4.0, has resulted in over 25% growth in remodeled stores, enhancing the shopping experience and driving higher traffic and conversion rates [31][36] Market Data and Key Metrics Changes - The retail environment is characterized by selective consumer spending, with customers being well-informed and willing to pay for desired products [10][11] - The company has diversified its sourcing to mitigate tariff impacts, with less than 10% dependence on China, resulting in a relatively low exposure to current tariff regimes [15][17] Company Strategy and Development Direction - The company is focused on strategic repositioning and growth plans, particularly in the Journeys segment, which includes enhancing brand awareness and product assortment [6][26] - The 4.0 store format is a key part of the strategy, aimed at attracting new customers while retaining existing ones, with plans to roll out more stores in the coming years [40][41] - The company is also investing in marketing and brand development to reach a broader audience and enhance customer engagement [26][28] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about maintaining strong performance into the back half of the year, driven by in-demand products and effective marketing strategies [12][13] - The company is prepared for potential challenges in 2026, emphasizing the importance of product freshness and consumer engagement [13][66] - Management highlighted the need for ongoing innovation in product development to meet changing consumer preferences and market demands [61][62] Other Important Information - The company is actively working on diversifying its brand partnerships, introducing new brands like HOKA and Saucony to align with consumer interests [46][48] - The company has seen a shift in consumer preferences towards lifestyle and casual footwear, with a focus on diverse product offerings [50][51] Q&A Session Summary Question: Expectations for the environment in the upcoming periods - Management noted that consumers are selective and well-informed, leading to higher average selling prices and conversion rates [10][11] Question: Update on tariff impacts - The company has limited exposure to tariffs, with mitigation strategies in place to manage costs effectively [15][17] Question: Drivers of comp improvements in Journeys - The focus on product assortment, brand awareness, and an elevated shopping environment are key drivers of comp growth [22][24] Question: Expectations for pricing and promotions - Management indicated that pricing strategies are being adjusted to offset cost headwinds, with a focus on maintaining product desirability [64][66] Question: Opportunities for SG&A efficiencies - The company is focused on balancing cost efficiencies with growth investments, expecting to leverage fixed costs through increased sales [68][70]