Core Insights - MUSINSA has launched its first international multi-brand store, Musinsa Store, in Shanghai, marking the full implementation of its "dual-track strategy" in the Chinese market [1] - The dual-track strategy consists of two distinct operational models: the self-owned brand Musinsa Standard focusing on modern casual wear and the multi-brand store Musinsa Store serving as a platform for designer brand curation and incubation [1] Group 1: Store Launch Details - The Musinsa Standard store on Huaihai Road spans approximately 1,421 square meters and features nearly 1,500 items of men's and women's clothing and accessories, employing a "Total Look" display model [2] - The store has tailored its product offerings to meet Chinese market demands, including exclusive products and promotional activities during the opening [2] Group 2: Multi-Brand Store Features - The Musinsa Store on Anfu Road features around 60 selected brands, including 15 local Chinese fashion brands and international brands like ASICS and HOKA [3] - The store is designed for operational efficiency, with a first floor dedicated to seasonal themes and a second floor showcasing over 30 fashion brands [3] Group 3: Strategic Goals and Future Plans - MUSINSA aims to expand its business to more cities in China over the next five years, planning to open over 100 stores and achieve a revenue target of 1 trillion Korean won (approximately 4.78 billion RMB) by 2030 [4] - The company is implementing localized operations by forming joint ventures with local partners, employing over 90% local staff, and launching a Tmall flagship store to create an integrated online and offline channel [4]

Group 1 - Stephanie Phair has been appointed as president of A.P.C., succeeding Pierre-Arnaud Grenade, who left the company in November [1][2] - Phair is also a senior adviser at L Catterton and will leverage her expertise across consumer categories to support the firm's portfolio globally [2] - A.P.C. was significantly impacted by the COVID-19 pandemic, prompting founder Jean Touitou to seek a partner with strong financial backing [3] Group 2 - L Catterton acquired control of A.P.C. in March 2023, with the aim of enhancing the brand's connections to art and music [3] - At the time of acquisition, A.P.C. reported revenues of just over 100 million euros, with potential for growth to five times that figure according to L Catterton [4] - L Catterton holds a 72.98 percent stake in A.P.C. and previously recruited Grenade to implement a growth model similar to his success at Ba&sh [4][5] Group 3 - Under Grenade's leadership, A.P.C. faced financial difficulties, leading to his withdrawal from daily operations in early October [5] - Phair's previous experience includes roles in communications and marketing, notably at American Vogue, where she contributed to significant fashion initiatives [6]

Industry Insights - The fashion industry is criticized for not adequately catering to plus-size women, with calls for greater diversity in runway shows and retail offerings [3] - Plus-size clothing has seen some improvements in accessibility, yet significant retailers like Ashley Stewart have filed for Chapter 11 bankruptcy protection, indicating ongoing challenges in the market [3] Sizing Trends - The average American woman now wears a size 16-18, which is categorized as "plus size" in many brands, reflecting a shift in sizing norms over time [4] - Terms like "inclusive sizing" lack a standardized definition, often referring to sizes larger than US 12, which is traditionally the largest size offered by many retailers [4] - Despite the average size being 16, only 0.6% of runway looks in major fashion capitals were in sizes 14 and above during the fall/winter 2023 season, highlighting a disconnect between consumer reality and high fashion [4] Consumer Experience - Inconsistent sizing across brands leads to frustration among consumers, as individuals may fit different sizes depending on the label, complicating the shopping experience [4] - The absence of a universal sizing standard and practices like "vanity sizing" contribute to variability in size labels and actual garment measurements, making it difficult to define an average size and fit [4]

Group 1 - Micron's shares surged 11% after reporting earnings that were approximately 80% higher than consensus estimates, driven by strong demand for memory chips used in data centers [6][4] - Insmed's stock fell 20% following the failure of its Phase 2b BiRCh study for brensocatib in chronic rhinosinusitis, leading to the discontinuation of the program [6] - Instacart's shares dropped 6.6% after the Federal Trade Commission issued a civil investigative demand [6] - Lululemon's shares rose 6.2% as Elliott Management is reportedly building a stake worth over $1 billion [6] - PayPal's stock declined 1.7% after Morgan Stanley downgraded the company to underweight, citing slow progress on strategic initiatives [6] Group 2 - The tech sector faced scrutiny as investors questioned the sustainability of valuations amid concerns over AI-driven revenue disclosures, with 57% of Deutsche Bank survey participants identifying potential AI valuation declines as a major risk to market stability by 2026 [4][5] - The Nasdaq experienced a nearly 2% decline, reflecting investor anxiety regarding the AI sector and its impact on tech valuations [4] - European stocks showed mixed performance, with retailers like H&M outperforming while automakers lagged, as investors awaited monetary policy decisions from the European Central Bank and Bank of England [9][19]

Core Insights - Revolve Group has expanded its partnership with Affirm to offer flexible payment options to shoppers in Canada and the United Kingdom, building on their existing collaboration in the United States [2][4] - Eligible shoppers can now utilize Affirm's pay-over-time feature for a range of products including apparel, footwear, accessories, and beauty items [2][3] Company Strategy - The co-founder and co-CEO of Revolve Group, Mike Karanikolas, emphasized that the expansion aligns with the company's commitment to enhancing the customer journey through curated shopping experiences and transparent payment options [4] - Karanikolas highlighted that payment flexibility is integral to providing a premium shopping experience, which was previously introduced in the U.S. market [4] Market Impact - Affirm's Chief Revenue Officer, Wayne Pommen, noted that the partnership has already provided U.S. customers with greater choice and clarity, and the expansion into Canada and the U.K. will further enhance this experience [5] - Affirm reported a 30% year-over-year growth in fashion and beauty purchases on its network for the quarter ending September 30, indicating strong demand for its services [6]

Core Insights - Affirm and Revolve Group have expanded their partnership to facilitate easier payment options for consumers in Canada and the UK, allowing them to purchase fashion items without late or hidden fees [1][2] - Eligible consumers can now use Affirm's buy now, pay later (BNPL) service to split their purchases for various products, including apparel and accessories [1][2] - The partnership builds on an existing collaboration that began in the United States earlier this year, reflecting a growing trend towards flexible payment options in the retail sector [1][2] Company Overview - Revolve Group, Inc. is a fashion retailer targeting Millennial and Generation Z consumers, founded in 2003 by co-CEOs Michael Mente and Mike Karanikolas [2] - The company operates through two segments: REVOLVE, which offers a wide range of apparel and accessories, and FWRD, which focuses on luxury brands [3] - Affirm aims to provide transparent financial products that improve consumer lives and support business growth, differentiating itself by not charging late or hidden fees [3][4] Market Trends - The demand for flexible payment options is increasing, with Affirm's network reporting a 30% year-over-year growth in fashion and beauty purchases as of the quarter ended September 30, 2025 [2] - Leading global brands, including Adidas and Canada Goose, utilize Affirm's services at checkout, indicating a broader acceptance of BNPL solutions in the retail industry [2]

Core Viewpoint - Merchant groups are opposing a settlement aimed at resolving long-standing litigation regarding interchange fees set by Visa and Mastercard, claiming it grants excessive legal immunity to these networks [1][4]. Group 1: Settlement Details - The settlement proposed would reduce posted credit interchange rates by ten basis points for five years and impose a 1.25% rate for standard consumer cards over an eight-year period [4]. - Merchants would gain the right to refuse certain higher-cost Visa and Mastercard-branded credit cards, deviating from the networks' "honor all cards" policy, and would be allowed to impose surcharges on specific cards [4]. Group 2: Merchant Objections - Merchants, including major organizations like the National Restaurant Association and Walmart, argue that the settlement resembles a previously rejected agreement and does not enforce significant changes in how interchange fees are determined [2][3]. - The objections highlight concerns over the temporary nature of the fee caps and the lack of fundamental reforms in the fee-setting process, which they believe undermines antitrust laws [3][4]. Group 3: Legal and Class Action Implications - The settlement is criticized for providing Visa and Mastercard with immunity from future litigation regarding their fees, which some merchants argue perpetuates an antitrust violation [4]. - Walmart has requested the court to decertify the class action, allowing large merchants to opt out or redefine the class to exclude them, claiming that the settlement primarily benefits a smaller subgroup of merchants [5].

Financial Data and Key Metrics Changes - For Q3 fiscal 2026, consolidated revenues were $62.3 million, a decrease of 11.7% compared to the prior year [8][26] - Net loss from continuing operations was $8.3 million, or $0.30 per diluted share, compared to a loss of $3.7 million, or $0.13 per diluted share in the previous year [27][28] - Gross margin for the quarter was 41.7%, down from 54.5% in the prior year, primarily due to an inventory write-down [29][30] - SG&A expenses decreased to $37.4 million, or 60.0% of net revenues, from $43.6 million, or 61.8% of net revenues in the prior year [30] Business Line Data and Key Metrics Changes - Direct segment revenues were $49.7 million, a 5.3% decrease from $52.5 million in the prior year [28][29] - Indirect segment revenues totaled $12.6 million, a 30.2% decrease from $18 million in the prior year, primarily due to a decline in specialty and key account orders [29] Market Data and Key Metrics Changes - The company opened five new stores and closed 14 since the prior year, impacting total revenues [29] - Inventory decreased by 24.3% year-over-year to $82.9 million, indicating improved inventory management [31][32] Company Strategy and Development Direction - The company is focused on five strategic pillars under "Project Sunshine," aimed at brand rejuvenation and operational excellence [5][9] - Key initiatives include sharpening brand focus, resetting go-to-market strategies, optimizing the digital ecosystem, and reimagining the outlet experience [6][7][20][22] - The company aims to engage both existing and new customers through innovative products and storytelling, while maintaining a focus on profitability and cash generation [12][24] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the transformation strategy, highlighting early wins in product innovation and brand storytelling [8][24] - The focus on product quality and customer engagement is expected to drive future growth, particularly with the upcoming spring-summer 2026 product launches [40][55] - Management acknowledged the challenges of re-engaging younger customers but sees potential in recent product offerings that resonate with this demographic [55] Other Important Information - The company is actively searching for a new CEO while continuing to implement Project Sunshine [25] - The recent appointment of a Chief Brand Officer is expected to enhance marketing efforts and customer engagement [55] Q&A Session Summary Question: What key signposts should be expected as Project Sunshine progresses into Q4 and 2026? - Management emphasized that product focus is crucial, with significant impacts expected from spring-summer 2026 product launches [39][40] Question: What has been the consumer response to Outlet 2.0 stores? - Early feedback has been positive regarding the store environment and customer journey, with performance in line with stores having more SKUs [46][47] Question: How can the company improve inventory productivity? - Management sees opportunities to improve inventory turns from less than two to a target of greater than two to three over the next 12-18 months [52] Question: How long will it take to attract a younger customer demographic? - Management acknowledged it will take time but is focused on re-engaging loyal customers while also targeting younger demographics through effective marketing and product offerings [55]

Financial Data and Key Metrics Changes - For Q3 2026, the company reported revenues of $62.3 million, an 11.7% decrease from the prior year, compared to a 24.6% decline in Q2 [8][26] - The net loss from continuing operations for Q3 totaled negative $8.3 million, or negative $0.30 per diluted share, compared to negative $3.7 million, or negative $0.13 per diluted share in the prior year [26][27] - Gross margin for Q3 was $26 million, or 41.7% of net revenues, down from 54.5% in the prior year, primarily due to a $5.9 million inventory write-down [29][30] Business Line Data and Key Metrics Changes - Direct segment revenues were $49.7 million, a 5.3% decrease from $52.5 million in the prior year, with comparable sales declining 5.8% [27][28] - Indirect segment revenues totaled $12.6 million, a 30.2% decrease from $18 million in the prior year, primarily due to a decline in specialty and key account orders [29] Market Data and Key Metrics Changes - The company experienced a sequential improvement in key metrics across nearly all direct segment channels, with positive comparable channel sales extending from back-to-school through Black Friday [8][28] - Inventory decreased year-over-year by 24.3% to $82.9 million, compared to $109.6 million at the end of the previous year [31][32] Company Strategy and Development Direction - The company is focused on five strategic pillars under "Project Sunshine," aimed at brand rejuvenation, operational excellence, and customer engagement [5][9] - The strategy includes sharpening brand focus, resetting the go-to-market approach, rewiring the digital ecosystem, implementing Outlet 2.0, and reimagining organizational structure for sustainable growth [5][6][22] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the transformation strategy, emphasizing the importance of product innovation and customer engagement to drive growth [3][39] - The company is committed to disciplined expense control and inventory management during the turnaround period, aiming for improved performance and shareholder value [32][24] Other Important Information - The company is in the process of searching for a new CEO, with a focus on finding the right leader to guide the transformation [25] - The recent appointment of a Chief Brand Officer is expected to enhance marketing and digital commerce efforts [54] Q&A Session Summary Question: What key signposts should be expected as Project Sunshine progresses into Q4 and 2026? - Management highlighted that product focus is crucial, with significant impacts expected from spring-summer 2026 product launches [38][39] Question: What has been the consumer response to Outlet 2.0 stores? - Early feedback has been positive regarding the store environment and customer journey, with performance in line with stores having more SKUs [44][45] Question: How should inventory opportunities be approached moving forward? - Management sees potential for improvement in inventory productivity, aiming to increase inventory turns from less than two to a range of two to three over the next 12-18 months [51] Question: How long will it take to attract a younger customer demographic? - Management acknowledged that it will take time but emphasized the importance of re-engaging loyal customers while also targeting younger demographics through effective marketing and product offerings [52][54]

Summary of Key Points from the Conference Call Industry Overview - The focus is on the Indian consumer market, particularly evaluating the anticipated recovery in consumption for the festive season of 3Q F26 [1][2]. - The analysis is based on three data points: UPI transaction data, app usage data for e-commerce, and management commentary from 2Q F26 conference calls [1]. Core Insights - **UPI Transaction Data**: - UPI transactions now account for approximately 39% of India's Private Final Consumption Expenditure (PFCE) [2][21]. - The growth in UPI transactions has been slowing, indicating that the increase is reflective of underlying category growth rather than merely a shift in payment methods [2]. - No consumption category is showing definitive festive momentum, with most categories experiencing lower YoY growth in October 2025 compared to 2Q F26 [3][28]. - **E-commerce and Quick Commerce Trends**: - Quick Commerce platforms like Blinkit, JioMart, and BigBasket are experiencing significant DAU growth of 70-200% during the festive period, while traditional e-commerce platforms like Amazon and Flipkart are seeing declines [4][58]. - Food delivery services have shown muted DAU growth, with Domino's being the strongest performer in the food services space [5][66]. - **Management Commentary**: - Mixed sentiments from management across sectors: - Food Services/QSRs reported better-than-expected trends but remain cautious due to a challenging demand environment [6][70]. - FMCG companies faced temporary disruptions due to GST changes but expect recovery in H2 [6][71]. - Fashion retail saw strong festive traction, with expectations of continued momentum into the wedding season [6][70]. - Jewellery companies reported record festive sales, indicating strong confidence in sustaining momentum [6][73]. - Alcohol brands are showing early signs of recovery, with October performing better than previous months [6][74]. Investment Implications - There is insufficient evidence to suggest a broad-based consumption revival in 3Q F26 despite government interventions [7]. - Categories such as jewellery, alcohol, and fast food are showing some festive growth momentum [7]. - Consumer preference for digital channels, particularly Quick Commerce, remains strong [7]. Additional Insights - **Category Performance**: - Essentials like grocery and general merchandise show stable growth, while discretionary categories like electronics and fashion retail are experiencing significant declines [28]. - Liquor and department stores are outperforming other categories, indicating a shift in consumer spending patterns [28]. - **DAU Trends**: - The analysis of DAU growth around Diwali indicates that Quick Commerce is becoming a structural consumption channel, while traditional e-commerce platforms are struggling [58][59]. - **Management Outlook**: - Companies across various sectors are cautiously optimistic about the upcoming months, with expectations of improved performance post-Diwali and during the wedding season [70][72]. This summary encapsulates the key points discussed in the conference call, highlighting the current state of the Indian consumer market, sector-specific insights, and management outlooks.