Key Takeaways lululemon athletica inc. (LULU) is navigating a complex retail environment, marked by macroeconomic caution in the United States, rising tariffs and persistent foreign exchange (FX) headwinds. In first-quarter fiscal 2025, FX had a 20-basis-point (bps) negative impact on the gross margin and contributed to SG&A deleverage through a revaluation loss. These currency pressures are expected to persist, with gross margin expected to decline 200 bps in the second quarter and 110 bps for fiscal 2025, ...

Financial Data and Key Metrics Changes - The company reported a total revenue growth of 11% in the first quarter, exceeding the high single-digit outlook, driven by strong performance in direct-to-consumer channels [21][22] - Adjusted gross margin expanded by 160 basis points to 72.1%, attributed to average unit retail (AUR) growth, favorable mix shift towards full-price and international businesses, and lower cotton costs [23][24] - Adjusted operating margin increased by 230 basis points to 16.6%, with operating profit rising by 29%, both ahead of guidance [25] Business Line Data and Key Metrics Changes - Core product sales, which represent over 70% of the business, grew in the mid-teens, driven by seasonal sweater polos and lightweight outerwear [12][13] - High potential categories, including women's apparel, outerwear, and handbags, saw strong double-digit growth, outpacing total company growth [13][14] - Direct-to-consumer (DTC) retail comps increased by 13%, with double-digit growth in both digital and brick-and-mortar stores [15][16] Market Data and Key Metrics Changes - Asia led performance with a 19% increase in revenue, followed by Europe at 10% and North America at 8% [22][23] - China experienced over 30% growth, driven by strong consumer response to brand-building initiatives [30][31] - North America maintained healthy trends with high single-digit growth, supported by strong DTC channels [17][26] Company Strategy and Development Direction - The company focuses on three long-term strategic pillars: elevating the lifestyle brand, driving core products, and winning in key cities with a consumer ecosystem [8][15] - Continued investment in technology, AI, and analytics to enhance consumer service and operational efficiency [7][18] - The company aims to expand its presence in key city ecosystems globally, leveraging brand desirability and diverse growth drivers [5][19] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strong start to the fiscal year but remains cautious about the second half due to potential tariff-related pressures on consumer behavior [7][22] - The company anticipates low to mid-single-digit revenue growth for the full year, with a focus on the first half being stronger [33][34] - Management highlighted the importance of operational discipline and agility in navigating a dynamic macro environment [39] Other Important Information - The company ended the quarter with $2.3 billion in cash and short-term investments, and $1.6 billion in total debt [31] - Inventory increased by 18% year-over-year, reflecting strong global demand and strategic receipt pull-forwards to mitigate tariff impacts [32][90] - The company plans to exit 90 to 100 wholesale doors in fiscal 2026, with approximately half related to Hudson's Bay [26] Q&A Session Summary Question: What have been the largest drivers of upside and how sustainable are they? - Management noted the shift towards a more elevated full-price consumer base and the resilience of core consumers across regions as key drivers [44][45] Question: Can you walk us through your updated guidance assumptions? - The updated guidance reflects over-delivery in Q1 and a better outlook for Q2, with tariff impacts remaining broadly in line with previous guidance [54][56] Question: What is the outlook for the handbag business? - The handbag category is seen as a high potential growth area, with strong initial responses to recent product launches [60][62] Question: How much of the inventory increase was driven by tariffs? - The inventory increase was partially due to strategic pull-forwards related to tariffs, but overall inventory growth is expected to align with revenue growth [90][92] Question: Can you quantify the tariff impact on gross margin this year? - Tariffs are the biggest headwind for gross margin, but management is confident in offsetting this pressure through various growth strategies [97][99]

Financial Data and Key Metrics Changes - The company reported a total revenue growth of 11% in the first quarter, exceeding the high single-digit outlook, driven by strong performance in direct-to-consumer channels [21][22] - Adjusted gross margin expanded by 160 basis points to 72.1%, influenced by average unit retail (AUR) growth and a favorable mix shift towards full-price and international businesses [24][25] - Adjusted operating margin increased by 230 basis points to 16.6%, with operating profit rising by 29%, both ahead of guidance [26] Business Line Data and Key Metrics Changes - Core product sales, which represent over 70% of the business, grew in the mid-teens, driven by seasonal items and new product offerings [12][13] - High-potential categories, including women's apparel, outerwear, and handbags, saw strong double-digit growth, outpacing total company growth [13] - Direct-to-consumer (DTC) retail comps increased by 13%, with double-digit growth in both digital and brick-and-mortar stores [14][27] Market Data and Key Metrics Changes - Asia led performance with a 19% increase in revenue, followed by Europe at 10% and North America at 8% [22][23] - China experienced over 30% growth, significantly outpacing competitors, driven by brand-building initiatives and strong consumer response [16][30] - North America maintained healthy trends with high single-digit growth, supported by strong DTC channels and stabilization in wholesale [16][27] Company Strategy and Development Direction - The company focuses on three long-term strategic pillars: elevating the lifestyle brand, driving core products, and winning in key cities through a consumer ecosystem [7][19] - Continued investment in technology, AI, and analytics is emphasized to enhance consumer service and operational efficiency [6][18] - The company plans to expand its presence in key city ecosystems, leveraging brand desirability and diverse growth drivers [48][49] Management's Comments on Operating Environment and Future Outlook - Management remains cautious about the second half of the year due to potential tariff-related pressures on consumer behavior, despite a strong start to the fiscal year [6][19] - The company expects low to mid-single-digit revenue growth for the full year, with a focus on maintaining operational discipline amid macroeconomic uncertainties [34][36] - Management highlighted the importance of brand desirability and value proposition in sustaining growth, particularly in a challenging economic environment [46][48] Other Important Information - The company ended the quarter with $2.3 billion in cash and short-term investments, and $1.6 billion in total debt, indicating a strong balance sheet [31] - Inventory increased by 18% year-over-year, primarily due to strategic pull-forwards to mitigate tariff impacts, with expectations for inventory levels to align with sales as the year progresses [31][91] - The company was recognized as one of America's Best Employers for Women by Forbes, reflecting its commitment to diversity and inclusion [18] Q&A Session Summary Question: What have been the largest drivers of upside and how sustainable are they? - Management noted the shift towards a more elevated full-price consumer base and the resilience of core consumers across regions as key drivers of upside, emphasizing the durability of these drivers [46][48] Question: Can you walk us through your updated guidance assumptions? - The updated guidance reflects over-delivery in Q1 and a positive outlook for Q2, with tariff impacts remaining broadly in line with previous expectations [56][57] Question: What is the outlook for the handbag business? - The handbag category is seen as a high-potential area, with strong initial responses to new product launches and a focus on building long-term capabilities [60][62] Question: How do you view the growth rates in Europe moving forward? - Management expects continued momentum in Europe but anticipates some deceleration in the second half due to timing shifts and macroeconomic pressures [71][72] Question: Can you comment on inventory levels and expectations for alignment with sales? - Inventory levels increased due to strategic pull-forwards related to tariffs, but management expects inventory growth to moderate and align with sales as the year progresses [89][91]

Financial Data and Key Metrics Changes - Global revenue increased by 8%, with a 4% contribution from Helly Hansen [20][21] - Adjusted earnings per share (EPS) was $1.21, a 23% increase compared to the prior year [26] - Adjusted gross margin expanded by 120 basis points to 46.4% [25] Business Line Data and Key Metrics Changes - Wrangler's global revenue increased by 7%, with a 9% increase in the U.S. driven by 16% growth in direct-to-consumer (DTC) [21][12] - Lee's global revenue decreased by 6%, with a 5% decline in U.S. wholesale partially offset by 9% growth in digital [22][23] - Helly Hansen's revenue for June was $29 million, exceeding expectations [24] Market Data and Key Metrics Changes - Wrangler's international revenue decreased by 6%, driven by a 6% decrease in wholesale [21] - Lee's international revenue also decreased by 6%, with low single-digit growth in DTC [23] - The U.S. market showed strong performance, particularly in the digital segment [15][21] Company Strategy and Development Direction - The company is focused on accelerating growth through geographic, category, and channel expansion, particularly for Helly Hansen [37][38] - The value creation framework is built on four pillars: accelerate growth, double operating margins, increase capital allocation optionality, and establish Kontoor as an employer of choice [11] - The company plans to hold an Investor Day in 2026 to share strategic vision and financial model improvements [19] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving the 2025 objectives, citing strong momentum entering the second half of the year [39][40] - The operating environment remains uncertain, but the company is executing at a high level with meaningful opportunities to create shareholder value [19][39] - Tariff impacts are expected to be mitigated over a 12 to 18-month period, with proactive measures in place [32][65] Other Important Information - Inventory increased by 40% to $686 million, with a focus on improving working capital and inventory turnover [27] - The company declared a regular quarterly cash dividend of $0.52 per share [31] - A voluntary debt repayment of $25 million was made during the quarter [29] Q&A Session Summary Question: What is the EBIT contribution from Helly Hansen this fiscal year? - The expected EBIT contribution is around $50 million, with a revenue run rate of approximately $680 million [42][43] Question: Can you elaborate on the cadence for second half revenue growth? - The revenue outlook for Q3 is approximately $855 million, with growth driven by a 53rd week and Helly Hansen's contribution [51][53] Question: What are the initiatives to mitigate tariff impacts? - The company is implementing pricing increases, transferring production within the global supply chain, and enhancing supplier partnerships [62][65] Question: What is the Helly Hansen revenue contribution for Q3? - The expected revenue contribution from Helly Hansen for Q3 is around $175 million [106] Question: How is the Wrangler business performing in terms of inventory management? - Wrangler's business is thriving, with strong demand and effective inventory management strategies in place [73][75]

Core Insights - e.l.f. Beauty, Inc. reported strong fiscal first-quarter results for 2026, with both net sales and earnings surpassing expectations, although earnings decreased compared to the previous year [1][3][9] Financial Performance - Adjusted earnings per share were 89 cents, exceeding the Zacks Consensus Estimate of 84 cents, but down from $1.10 in the same quarter last year [3][9] - Net sales increased by 9% year-over-year to $353.7 million, slightly above the consensus estimate of $353 million, driven by strong performance in retail and e-commerce channels [3][9] Market Position - The company gained 210 basis points in market share, marking 26 consecutive quarters of category-leading growth, attributed to a strong value proposition, innovation, and effective marketing [2][9] Cost and Margin Analysis - Gross margin contracted by 215 basis points to 69%, influenced by tariffs, though partially offset by favorable foreign exchange impacts [4] - Adjusted selling, general, and administrative expenses rose by $12.9 million to $177.3 million, primarily due to increased professional fees and marketing costs, despite reductions in compensation and operational costs [5] EBITDA and Cash Flow - Adjusted EBITDA was $87.1 million, reflecting a 12% increase from the previous year, with an adjusted EBITDA margin of 25% [6] - The company ended the quarter with cash and cash equivalents of $170 million and net cash from operating activities of $27.2 million [7] Future Outlook - The company has not provided a full-year financial outlook for fiscal 2026 due to tariff uncertainties but expects net sales growth in the first half to exceed the 9% increase reported in Q1 [8][9] - Adjusted EBITDA margins for the first half of fiscal 2026 are anticipated to be around 20%, down from approximately 23% in the same period of fiscal 2025, primarily due to higher tariff costs [8]

Ralph Lauren’s sales topped Wall Street expectations in another sign that the apparel company can overcome sluggish demand in many parts of the consumer sector. https://t.co/OYhZ4dbVPi ...

Financial Data and Key Metrics Changes - Consolidated revenues for Q2 2025 were $1,110 million, representing a 4% year-over-year decrease, primarily due to decreased revenue in the Active Lifestyle segment [29] - Q2 adjusted EBITDA was $196 million, a 5% year-over-year decrease, mainly due to decreased revenue and incremental tariffs [30] - The company raised its full-year revenue guidance to a range of $3,800 million to $3,920 million, reflecting an increase of over $30 million at the midpoint compared to prior guidance [35] Business Line Data and Key Metrics Changes - Golf equipment revenue for Q2 was approximately flat year-over-year at $412 million, exceeding expectations [30] - Active Lifestyle segment revenue decreased by $36 million year-over-year to $214 million, primarily due to the sale of Jack Wolfskin and soft market conditions [31] - Topgolf Q2 revenue decreased by 2% year-over-year, primarily due to a 6% decline in same venue sales, partially offset by higher revenue from new venues [32] Market Data and Key Metrics Changes - Market conditions in the U.S. for golf equipment remain healthy, with rounds played approximately flat on a playable hour adjusted basis [8] - Conditions in the UK and Northern Europe markets are strong, while Asia and Central Europe are softer year-over-year [9] - The athleisure category in the Active Lifestyle segment is down mid to high single digits during Q2 [11] Company Strategy and Development Direction - The company closed the sale of Jack Wolfskin, enabling greater business focus and financial flexibility for Topgolf [4] - The company is committed to ongoing cost reduction and margin improvement initiatives, which have been beneficial in the current operating environment [6] - The strategic process for Topgolf is ongoing, with both a spin and sale being evaluated, although a spin is now impractical for the second half of the year [15][80] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the golf equipment segment, citing healthy consumer engagement and upcoming product launches [10] - The company is optimistic about the improving trends in same venue sales at Topgolf, driven by value initiatives and enhanced customer experience [12][39] - Management acknowledged the challenges posed by tariffs, increasing the estimated impact from $25 million to $40 million for the year [5][45] Other Important Information - The company reported an increase in available liquidity to $1,160 million as of June 30, 2025, primarily due to cash proceeds from the sale of Jack Wolfskin [32] - Net debt decreased to $2,390 million, down from $2,620 million year-over-year, reflecting improved cash balances [33] - The company expects to be free cash flow positive at both the total company and Topgolf in 2025 [38] Q&A Session Summary Question: Can you talk about the robust process regarding the spin and sale of Topgolf? - Management confirmed that the strategic direction remains unchanged, with only the timing of a potential spin being affected due to leadership changes [42][80] Question: What is the current health of the golf industry and drivers of the improving golf equipment business? - Management noted that the golf equipment business remains healthy, with consumer engagement strong and sell-through up low single digits [49] Question: What were the biggest contributors to the value initiatives at Topgolf? - Management highlighted the success of the Sunday Fun Pass and other value offerings, which significantly increased traffic and improved customer perception [57] Question: Can you provide an update on cost reduction efforts and labor efficiency initiatives? - Management indicated that teams have executed well on cost reduction, with improvements in labor efficiency and service speed contributing to stable margins [66] Question: How is the TravisMathew business trending? - Management reported that while the athleisure market is down, the women's category within TravisMathew continues to perform well [72]

Core Insights - Gildan Activewear has appointed S&S Activewear as the exclusive wholesale distributor for its brands in the Canadian imprintables market, effective December 28, 2025 [1][3]. Group 1: Partnership Details - The partnership aims to enhance product availability and streamline the ordering process for Gildan's Canadian customers through S&S Activewear's distribution network [2][3]. - S&S Activewear will provide improved service with inventory depth that allows for one and two-day service to over 99% of the Canadian population [3]. Group 2: Company Background - Gildan is a leading manufacturer of basic apparel, offering products such as activewear, underwear, and socks, marketed under various brands including Gildan, American Apparel, and Champion [4][5]. - The company operates large-scale manufacturing facilities primarily in Central America, the Caribbean, North America, and Bangladesh, with a strong commitment to ESG practices [5]. Group 3: S&S Activewear Overview - S&S Activewear, founded in 1988, is a major distributor of apparel and accessories in North America, offering over 100 brands and operating more than 6 million square feet of warehouse space [6]. - The company serves a diverse customer base, including retail brands, e-commerce companies, and garment decorators [6].

Financial Data and Key Metrics Changes - Total company revenue decreased 6% year-over-year to $797 million, with earnings per share at $0.50, reflecting a sequential improvement in trends across all regions [5][27][30] - Net income was $60 million, resulting in diluted earnings per share of $0.50, exceeding expectations due to better-than-anticipated results at both Michael Kors and Jimmy Choo [27][30] - Gross margin was approximately flat at 63%, with higher tariffs negatively impacting gross margin by 30 basis points [30][31] Business Line Data and Key Metrics Changes - At Michael Kors, revenue decreased 6% year-over-year, with retail and wholesale channels showing similar trends [5][28] - Jimmy Choo's revenue decreased 6.4% year-over-year, with retail sales declining mid-single digits and wholesale declining double digits [16][29] - Accessories at Michael Kors saw strong full-price sell-throughs, while footwear revenue was down double digits, driven by a decline in the dress category [12][17] Market Data and Key Metrics Changes - Revenue in The Americas decreased 9%, while EMEA revenue increased 6%, and Asia revenue declined 15% [28] - Michael Kors revenue in The Americas decreased 8%, while EMEA increased 9% and Asia declined 16% [28] - Jimmy Choo's revenue in The Americas decreased 12%, with EMEA increasing 1% and Asia decreasing 14% [29] Company Strategy and Development Direction - The company is focused on stabilizing its business in fiscal 2026 while laying a foundation for growth in fiscal 2027, with strategic initiatives aimed at reenergizing its luxury brands [4][5][24] - A significant store renovation program is planned, targeting approximately 50% of the store fleet over the next three years to enhance consumer experience [14][39] - The company aims to achieve $4 billion in revenues for Michael Kors and $800 million for Jimmy Choo over time, leveraging data analytics and consumer insights [15][24] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about early signs of strategic initiatives working, with expectations for trends to improve in the second half of fiscal 2026 [24][41] - The global macroeconomic environment remains dynamic, with updated guidance reflecting increased tariff rates impacting cost of goods sold [34][37] - The company anticipates a gradual sequential improvement in trends supported by new product deliveries and marketing initiatives [38][39] Other Important Information - The Versace transaction is expected to close in 2025, with proceeds aimed at substantially reducing debt [72][74] - The company is focused on reducing promotional activity, particularly in the outlet channel, to improve gross margins [60][62] Q&A Session Summary Question: Can you elaborate on recent sell-through trends on product launches across direct-to-consumer and wholesale? - Management noted that strategic storytelling and marketing changes have led to improved consumer engagement and sell-throughs, particularly in full-price channels [44][46] Question: How do you expect pricing trends to translate to margins in the back half of this fiscal year? - Management indicated that while tariffs will impact margins, strategic initiatives and reduced promotional activity are expected to support gross margin expansion in fiscal 2027 [54][58] Question: Are you seeing signs that consumers are following you into the retail channel? - Management confirmed that closing underperforming stores has led to a reevaluation of market presence, with plans to reopen stores in certain areas where the brand was previously absent [93][95]

Financial Performance - Capri Holdings' revenue decreased by 60% (-77% Constant Currency) in 1Q Fiscal Year 2026 [11] - Michael Kors' revenue decreased by 59% (-73% Constant Currency) in 1Q26 [18] - Jimmy Choo's revenue decreased by 64% (-92% Constant Currency) in 1Q26 [25] - The adjusted EPS was $050, driven by better than anticipated results at Michael Kors and Jimmy Choo as well as a discrete tax benefit [11] Strategic Initiatives & Outlook - Capri Holdings expects revenue of approximately $815 - $835 million for 2Q26 and approximately $3375 - $345 billion for Fiscal Year 2026 [27] - The company anticipates net interest income of approximately $15 million for 2Q26 and approximately $85 - $95 million for Fiscal Year 2026 [27] - The company expects a diluted earnings per share (Continuing Operations) of approximately $010 - $015 for 2Q26 and approximately $120 - $140 for Fiscal Year 2026 [27] Versace Sale - Capri Holdings entered into an agreement to sell Versace to Prada for $1375 billion in cash [6] - The transaction is expected to close in the second half of calendar 2025 [6] - Capri plans to use the proceeds to substantially reduce debt levels, invest in future growth, and reinstate a share repurchase program in the future [8] Customer Database - The customer database increased by 9% versus prior year [11] - Global database increased 9% year-over-year for Michael Kors [18] - Global database increased 9% year-over-year for Jimmy Choo [25]