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% [21][22] - Adjusted operating margin increased 210 basis points to 13.5%, with adjusted operating income rising 34% [22][23] - The company ended the period with $1.6 billion in cash and short-term investments and $1.2 billion in total debt [28] Business Line Data and Key Metrics Changes - Core product sales grew mid-teens, driven by strong performance in cotton cable knit and seasonal Oxford shirts [12] - Women's apparel and high-potential categories like handbags saw strong double-digit growth, outpacing total company growth [12][14] - Digital ecosystem sales grew double digits, reflecting balanced growth across regions [21] Market Data and Key Metrics Changes - Asia and Europe led performance with sales increasing 16% and 15% respectively, while North America sales grew 13% [21] - China sales increased more than 30%, driven by strong consumer response to brand-building activities [16][25] - North America retail comps were up 13%, with digital comps growing 15% [23] 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 [4][5] - The strategy focuses on elevating the lifestyle brand, driving core products, and expanding in key cities [5][15] - The company plans to continue investing in brand activations and technology to enhance consumer engagement [17][18] 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 general volatility [7] - Despite macroeconomic uncertainties, the company is confident in capturing market share opportunities [7][29] - The full-year revenue growth outlook was raised to approximately 5%-7%, reflecting better-than-expected performance in the first half [28][29] Other Important Information - The company added 1.5 million new consumers to its DTC businesses, driven by digital and full-price store customers [10] - The company plans to exit 90-100 wholesale doors in fiscal 2026, with approximately half related to Hudson's Bay [24] - The company launched an AI styling tool, Ask Ralph, developed with Microsoft, to enhance consumer shopping experience [17] Q&A Session Summary Question: Updated outlook for consumer health and brand awareness - Management noted strong momentum in business and no significant changes in consumer behavior, with a focus on attracting full-price customers [40][42] Question: Pricing strategy and tariff mitigation - Management discussed the sustained AUR growth driven by brand investment and pricing actions, with expectations for continued gross margin expansion despite tariff pressures [48][50] Question: Engagement strategies for North America value-oriented consumers - The company emphasized flexibility in pricing and a compelling value proposition to appeal to value-sensitive customers during the holiday season [56][58] Question: North America wholesale trajectory - Management indicated healthy growth in North America wholesale, with expectations for some pressure in the second half due to planned reductions in off-price sales [76][78] Question: Performance in outlet versus full-price channels - Consistent growth was observed across full-price and outlet stores, with a focus on expanding full-price locations while consolidating outlet presence [80]