Core Insights - Chipotle has launched the 'A Little Extra' Dorm Collection in collaboration with Urban Outfitters, aimed at enhancing the college experience for students [1][5] - The Chipotle U Rewards program offers college students benefits such as 1,000 bonus points upon enrollment and 20% more points on every purchase, facilitating quicker access to free meals [2][4][6] Group 1: Chipotle U Rewards - The program is designed to provide a personalized digital experience for Gen Z students, rewarding them for their loyalty and engagement with the brand [4] - Students can enroll in Chipotle U Rewards starting today, with the program emphasizing special offers tied to significant milestones in their college journey [2][4] - Members earn 12 points for every $1 spent at Chipotle, accelerating their ability to redeem rewards [6] Group 2: 'A Little Extra' Dorm Collection - The collection features items inspired by Chipotle's menu, including bean bag chairs, a throw blanket resembling a tortilla, and a desk light shaped like a chip bag [5] - The collaboration aims to resonate with Gen Z's desire for individuality and self-expression in their living spaces [5][10] - The collection will be available for purchase starting August 20 at select Urban Outfitters locations and online [5][9] Group 3: Company Background - Chipotle Mexican Grill operates over 3,800 restaurants across multiple countries and is committed to serving responsibly sourced food without artificial ingredients [9] - Urban Outfitters, founded in 1970, operates over 200 stores and focuses on empowering individuality through a unique blend of products and creativity [10]

Financial Data and Key Metrics Changes - Q3 revenue reached $325 million, reflecting a 0.7% year-over-year increase and a 4.1% quarter-over-quarter increase [20] - Adjusted EBITDA for the quarter was $11 million, representing a margin of approximately 3.4%, up 130 basis points year-over-year but down 170 basis points quarter-over-quarter [22] - Gross margin was 44.2%, down 130 basis points year-over-year and down 30 basis points quarter-over-quarter [21] - Revenue per active client for the quarter was $542, up 3.2% year-over-year and up 1% quarter-over-quarter [20] Business Line Data and Key Metrics Changes - The women's business and overall fixed channel returned to revenue growth, while the men's business and freestyle channel also saw growth [6] - Average Order Value (AOV) grew by 10% year-over-year, with improvements in items per fix, keep rate, and Average Unit Retail (AUR) [7] - Notable growth in athleisure for both women's and men's clients, with sneakers up 35% year-over-year [11] Market Data and Key Metrics Changes - Active clients at the end of Q3 were 2.4 million, down 10.6% year-over-year and down 0.8% quarter-over-quarter, marking the lowest sequential decline in three years [20] - New client growth has been achieved for two consecutive quarters, with new clients spending more, as evidenced by the highest 90-day Lifetime Value (LTV) in three years [12] Company Strategy and Development Direction - The company is transitioning from the build phase to the growth phase of its transformation strategy, focusing on cementing its position as a retailer of choice for apparel and accessories [12] - Strategic investments are being made in client acquisition and reengagement, as well as strengthening the product assortment [23] - The company aims to leverage its unique value proposition and AI capabilities to gain market share [13][45] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating external challenges, including a dynamic macroeconomic environment and tariff pressures [14] - The company does not expect significant cost impacts from tariffs for the remainder of the fourth quarter [15] - Future guidance indicates a stronger Q4 than previously anticipated, with total revenue expected between $298 million and $300 million [24] Other Important Information - The company generated $16 million of free cash flow in Q3 and ended the quarter with $242 million in cash and no debt [22] - Inventory management has improved, with net inventory flat year-over-year and up 4.4% quarter-over-quarter [21] Q&A Session Summary Question: Insights on core consumer behavior and guidance for Q4 - Management noted strong performance in AOV and engagement metrics, with larger fixes resonating well with clients [32][34] - They expect a slight sequential decline in active clients due to normal seasonality but remain confident in revenue growth [37] Question: Potential share gain opportunities in the current macro environment - Management believes the current macro environment presents an opportunity for share gain, emphasizing the adaptability of their service [52] - They do not anticipate price increases during the fiscal year and are focused on creating value for clients [54] Question: Sustainability of AOV increases - AOV growth is driven by larger fixes and a focus on client engagement, with expectations for continued strength [70] - Tougher comparisons are anticipated in FY 2026 due to the strong performance in the current year [71] Question: Active client growth and advertising spend - Management does not foresee the need to increase ad spend to achieve active client growth, citing improvements in client reengagement [74] - They are focused on quality client acquisition and maximizing lifetime value [60]

Financial Data and Key Metrics Changes - First quarter net sales reached $184.3 million, up 3.9% from $177.4 million in the first quarter of 2024 [12] - Comparable sales grew 5.5%, marking the fourth consecutive quarter of positive growth [4] - Gross profit for the first quarter was $55.3 million, a 6.6% increase compared to $51.9 million in the same quarter last year [15] - Net loss for the first quarter was $14.3 million, or $0.79 per share, compared to a net loss of $16.8 million, or $0.86 per share, in the first quarter of 2024 [16] Business Line Data and Key Metrics Changes - North America net sales were $149.7 million, an increase of 4.9% from 2024, with comparable sales up 7.4% [13] - Other international net sales, which include Europe and Australia, were $34.6 million, down 0.2% from last year, with comparable sales down 2.3% [13][14] - The women's category was the largest positive comping category, while hard goods was the only negative comping category [14] Market Data and Key Metrics Changes - North America comparable sales increased 5.1% during the four-week period ended May 31, 2025, while other international comparable sales decreased 14.8% [20] - The company anticipates total sales for the second quarter to be between $207 million and $214 million, representing a negative 2% to positive 2% change from the prior year [22] Company Strategy and Development Direction - The company is focused on three strategic priorities: accelerating top-line expansion, maintaining profitability, and leveraging financial strength to navigate uncertainty [5][6] - Plans to reduce exposure to China by diversifying the sourcing base, aiming for no individual country to represent more than 20% of goods sourced by 2026 [5][36] - The company expects to open nine new stores in 2025 while closing approximately 20 stores [27] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating the global trade environment and adapting to changing market conditions [4][5] - The company anticipates modest year-over-year growth in product margin in 2025, despite challenges from tariffs and store closures [26] - Management noted that achieving previously mentioned annual expectations for fiscal 2025 remains feasible [26] Other Important Information - The company ended the quarter with $101 million in cash and current marketable securities, with no debt on the balance sheet [9][17] - A new share repurchase plan for up to $15 million was authorized by the Board of Directors [18] Q&A Session Summary Question: Can you walk us through the tariff situation and its impact on COGS? - Management highlighted proactive measures taken to mitigate tariff impacts, including sourcing adjustments and cost management strategies [30][32][36] Question: What is the anticipated product margin growth despite tariff exposure? - Management indicated that they expect to grow product margin modestly through various strategies, including working with brand partners and adjusting pricing [37][39] Question: What is the strategy for improving results in the other international markets? - Management acknowledged the challenges in Europe and emphasized a focus on profitability and cash flow, with plans to drive top-line growth through new product offerings [40][44][46]

Financial Performance - Full Year 2024 - The company's net sales reached $4.9 billion, a 16% year-over-year increase[17, 53] - Operating income was $741 million, with an operating margin of 15%[19, 52] - Net income per diluted share was $1069, a 72% year-over-year increase[56] Financial Performance - Q4 2024 - Net sales totaled $158 billion, a 9% increase compared to Q4 2023[61, 83] - Operating income reached $256 million, resulting in an operating margin of 162%[63] - Net income per diluted share was $357, a 20% increase year-over-year[64] Brand Performance - Full Year 2024 - Abercrombie brands net sales were $256 billion, up 16% year-over-year[27, 98] - Hollister brands net sales were $239 billion, up 15% year-over-year[36, 98] Regional Performance - Full Year 2024 - Americas net sales reached $403 billion, a 17% increase[98] - EMEA net sales were $771 million, a 12% increase[55, 98] - APAC net sales totaled $151 million, a 9% increase[55, 98] Fiscal Year 2025 Outlook - The company anticipates net sales growth of 3% to 5% and an operating margin between 14% and 15%[17, 19, 78] - The company plans to repurchase $400 million in shares[78]