Financial Data and Key Metrics Changes - Total company net sales for Q3 increased by 6.2% to $85.1 million compared to $80.2 million in Q3 of fiscal 2024 [10] - Gross profit was $41.9 million, representing 49.2% of net sales, down from 50% in the same period last year [11] - Net income for Q3 was $2.7 million, or $0.21 per share, compared to $4.3 million, or $0.34 per share in Q3 of the previous year [14] Business Line Data and Key Metrics Changes - The wholesale channel increased by 6.7%, while the direct-to-consumer segment grew by 5.5% [10] - The e-commerce site saw triple-digit growth in site traffic late in the quarter, contributing to strong performance [6] Market Data and Key Metrics Changes - The company experienced record sales during the Black Friday and Cyber Monday weekend in the direct-to-consumer segment [8] - Inventory at the end of Q3 was $75.9 million, up from $63.8 million a year ago, primarily due to higher inventory carrying value from tariffs [15] Company Strategy and Development Direction - The company is focusing on enhancing customer experience through e-commerce improvements and strategic price increases [4][5] - A new dropship strategy was launched, initially focusing on shoes, with plans to expand into other categories [6] - The company is beginning to reinvest in marketing initiatives that had been previously scaled back [8] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's trajectory and the ability to navigate tariff challenges while maintaining quality [8] - The outlook for Q4 anticipates net sales growth of approximately 3%-7%, with adjusted operating income expected to be flat to 2% [16] Other Important Information - The company is managing supply chain disruptions effectively, with goods flowing smoothly despite sourcing changes [5] - The increase in income tax expense is attributed to the application of the estimated annual effective tax rate [14] Q&A Session Summary Question: Discussion on licensed products and future potential - Management is optimistic about the dropship initiative and its impact on e-commerce and store utilization [23] Question: Collaboration with other fashion brands - The company is exploring partnerships, particularly in denim, to enhance product offerings [24] Question: Store openings and future opportunities - Management is pleased with the reception of new stores and is monitoring e-commerce impacts, with cautious expansion plans [26] Question: Revenue growth drivers - Revenue growth was supported by stable unit sales despite price increases, indicating strong customer acceptance [36] Question: Trends in freight costs - Freight costs are increasing due to sourcing changes and timing, rather than inherent contract pricing [41]

Financial Data and Key Metrics Changes - Total company net sales for Q3 increased by 6.2% to $85.1 million compared to $80.2 million in Q3 of fiscal 2024 [10] - Gross profit was $41.9 million, representing 49.2% of net sales, down from 50% in the same period last year [11] - Net income for Q3 was $2.7 million, or $0.21 per share, compared to $4.3 million, or $0.34 per share in Q3 of the previous year [14] Business Line Data and Key Metrics Changes - The wholesale channel increased by 6.7%, while the direct-to-consumer segment grew by 5.5% [10] - The women's assortment saw price increases exceeding the overall average of approximately 6%, with unit sales remaining nearly flat compared to last year [4] Market Data and Key Metrics Changes - The company experienced triple-digit growth in site traffic late in the quarter, contributing to strong performance in the direct-to-consumer segment [6] - Record sales were achieved during the Black Friday and Cyber Monday weekend in the direct-to-consumer business [8] Company Strategy and Development Direction - The company is focusing on enhancing customer experience through e-commerce improvements and strategic price increases [4][5] - A new dropship strategy was launched, initially focusing on shoes, with plans to expand into other categories [6] - The company is beginning to reinvest in marketing initiatives that had been previously scaled back, seeing positive returns on these investments [8] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's trajectory and the ability to navigate tariff challenges while maintaining quality [8] - The outlook for the fourth quarter anticipates net sales growth of approximately 3%-7%, with direct-to-consumer growth expected to outpace total net sales growth [16] Other Important Information - Selling, general, and administrative expenses were $36.5 million, or 42.8% of net sales, compared to $34.3 million, or 42.8% of net sales in the same period last year [12] - The company expects approximately $4 million to $5 million of incremental tariff costs in the upcoming quarter [16] Q&A Session Summary Question: Discussion on licensed products and future potential - Management is optimistic about the dropship initiative and its impact on e-commerce and store utilization, particularly for new categories [21] Question: Collaboration with other fashion brands - The company is exploring partnerships in denim and is pleased with the collaboration with Citizens of Humanity [23] Question: Store openings and future opportunities - Management is satisfied with the reception of new stores in Nashville and Sacramento and is monitoring e-commerce impacts [25] Question: Inventory constraints and sales performance - Overall inventory position is good, and logistics improvements have helped maintain timely store refills [31] Question: Revenue growth drivers - Revenue growth was supported by stable unit sales at higher price points, with customers trading up [33] Question: Trends in freight costs - Freight costs are increasing due to changes in sourcing and timing, rather than inherent contract pricing [39]

Financial Data and Key Metrics Changes - Total company net sales for Q2 decreased by 1.3% to $73.2 million compared to $74.2 million in Q2 of fiscal 2024 [10] - Gross profit for Q2 was $36.9 million, representing 50.4% of net sales, an increase from $35.1 million or 47.4% of net sales in the same period last year [11] - Net income for Q2 was $12.1 million, or $0.93 per share, compared to $0.6 million, or $0.05 per share in Q2 of the previous year [15] - Adjusted EBITDA for Q2 was $6.7 million, up from $2.7 million in the prior year [15] Business Line Data and Key Metrics Changes - Direct-to-consumer (DTC) segment increased by 5.5%, with both e-commerce and store channels contributing to growth [10] - Wholesale segment saw a decline of 5.1% due to delays in shipments caused by tariff mitigation strategies [10] Market Data and Key Metrics Changes - The company successfully elongated its full-price selling season from spring, which positively impacted gross margin performance [5] - The men's business showed solid performance, particularly in knits and bottoms, while women's wovens and knits also performed well [6] Company Strategy and Development Direction - The company is focused on reinvesting in the business, particularly in top-of-funnel marketing, after successfully navigating tariff challenges [8] - Plans to open new stores in strategic locations, such as Nashville and Sacramento, to enhance geographic coverage and support e-commerce [6] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's strategic positioning despite a dynamic environment, emphasizing strong fundamentals and growth trajectory [9] - The company anticipates net sales for Q3 to be flat to up low single digits compared to the prior year, with cautious consumer sentiment expected [17] Other Important Information - The company has reduced its long-term debt balance to $31.1 million, down from $54.4 million in the prior year [14] - Inventory at the end of Q2 was $76.7 million, an increase from $66.3 million in the same period last year, driven by higher inventory carrying value due to tariffs [15][16] Q&A Session Summary Question: How will the company maximize collection flow next year based on Q2 learnings? - Management noted the need to analyze the benefits of stretching out the spring selling season and will make decisions based on longer-term data [22][23] Question: What is the company's strategy for maintaining wholesale quality and share? - Management highlighted their nimbleness and strong team continuity as competitive advantages in maintaining quality and responding to market changes [24][25] Question: How does the company view price elasticity among its customer base? - Management stated that they carefully evaluate price changes on a style-by-style basis, ensuring value remains intact for both affluent and aspirational customers [25][27] Question: What is the current percentage of products sourced from China? - Management indicated progress in reducing exposure to China, targeting a cap of 25% for any one country, with expectations to achieve this by the holiday season [34][35] Question: What are the trends in freight costs and shipping delays? - Management explained that delays were intentional to manage inventory flow and that freight costs are not expected to see significant increases in the back half of the year [37][40] Question: How many store locations were open in Q2 compared to last year? - Management confirmed there were 40 full-price stores and 14 outlets last year, with new openings planned for Nashville and Sacramento [41][43]

Financial Data and Key Metrics Changes - Total company net sales for Q2 decreased 1.3% to $73.2 million compared to $74.2 million in Q2 of fiscal 2024 [10] - Gross profit was $36.9 million, or 50.4% of net sales, compared to $35.1 million, or 47.4% of net sales in the same period last year [11] - Net income for Q2 was $12.1 million, or income per share of $0.93, compared to net income of $0.6 million, or income per share of $0.05 in Q2 of last year [15] Business Line Data and Key Metrics Changes - Direct-to-consumer segment increased 5.5%, with both e-commerce and store channels contributing to growth [10] - Wholesale segment declined by 5.1% due to delays in shipments caused by tariff mitigation strategies [10] Market Data and Key Metrics Changes - The company experienced strong performance in women's wovens and knits, as well as in the buy-now, wear-now bottoms category [5] - Men's business showed solid results, particularly in knits and bottoms assortments [6] Company Strategy and Development Direction - The company is focused on mitigating tariff impacts and has successfully reduced the estimated impact from incremental tariffs by approximately 50% for the second half of the year [7] - Plans to reinvest in the business include restoring top-of-funnel marketing dollars and exploring longer-term growth opportunities [8] Management's Comments on Operating Environment and Future Outlook - Management remains cautiously optimistic about the growth trajectory, despite the dynamic environment and ongoing tariff pressures [9] - The company anticipates net sales for Q3 to be approximately flat to up low single digits compared to the prior year period [16] Other Important Information - The company’s long-term debt balance was $31.1 million, a reduction of $23.3 million compared to the prior year [14] - Net inventory increased to $76.7 million, driven by higher inventory carrying value due to tariffs [15] Q&A Session Summary Question: How will the company flow its collections next year based on Q2 learnings? - Management indicated that they will analyze the benefits of stretching out spring collections and make decisions based on longer-term data [22][23] Question: What is the company's strategy for maintaining wholesale quality and share? - Management emphasized their nimbleness and ability to respond quickly as a competitive advantage, allowing them to maintain quality and potentially gain market share [24][25] Question: How does the company view price elasticity among its customer base? - Management stated that they carefully evaluate price changes on a style-by-style basis, ensuring that value remains at the new price points [26][27] Question: What impact have tariff issues had on new categories or accessories? - Management noted that licensing partners are also navigating similar challenges, and the company is focused on ensuring that price changes make sense for consumers [28][30] Question: What percentage of products are currently sourced from China? - Management reported that they are targeting a cap of 25% for sourcing from any one country and are progressing well in reducing exposure to China [34][35] Question: What are the trends in freight costs for the back half of the year? - Management indicated that they do not foresee a significant uptick in overall freight costs and expect normalization as they manage inventory around the holiday season [38][40] Question: How many store locations were open in the quarter compared to last year? - Management confirmed that they opened a Nashville location and have a Sacramento location slated for October, with no additional openings planned for the remainder of the year [41][42]