Core Viewpoint - Investors in the Shoes and Retail Apparel sector should consider Adidas AG (ADDYY) and Nike (NKE) for potential value opportunities, with Adidas currently presenting a better value proposition [1]. Valuation Metrics - Adidas AG has a Zacks Rank of 2 (Buy), indicating a more favorable earnings estimate revision activity compared to Nike, which has a Zacks Rank of 4 (Sell) [3]. - The forward P/E ratio for Adidas is 23.11, significantly lower than Nike's forward P/E of 45.51, suggesting that Adidas is undervalued relative to Nike [5]. - Adidas has a PEG ratio of 0.48, while Nike's PEG ratio is 2.79, indicating that Adidas is expected to grow earnings at a more attractive rate relative to its price [5]. - The P/B ratio for Adidas is 5.62, compared to Nike's P/B of 8.57, further supporting the notion that Adidas is more favorably valued [6]. Overall Assessment - Based on various valuation metrics, Adidas holds a Value grade of B, while Nike has a Value grade of D, indicating that Adidas is the superior option for value investors at this time [7].

Group 1 - WSS launched the "Best Value Always" campaign featuring athletes Hirving "Chucky" Lozano and Adrián González, emphasizing cultural pride and generational inspiration for back-to-school season [1][2] - The campaign aims to instill confidence in children as they prepare for the new school year, aligning with WSS's community-focused values [2] - WSS is hosting in-store Back-to-School events from July 17 to August 18, offering free school supplies, haircuts, and giveaways to support families [3][4] Group 2 - WSS is positioned as a go-to destination for back-to-school apparel, providing styles that promote self-expression and readiness for school and sports [5] - The company, a banner of Foot Locker, Inc., operates over 150 stores nationwide, offering a wide selection of footwear and apparel from top brands [6] - WSS features various product categories including classic sneakers, soccer-inspired styles, modern runners, and functional backpacks, catering to diverse customer needs [8]

Financial Data and Key Metrics Changes - Full year fiscal 2025 revenue reached a record $1,900,000,000, reflecting a $1,000,000,000 increase over the last four fiscal years [8] - Earnings per diluted share grew by 23% to $5.88, an increase of $1.08 over the prior year [8] - Fourth quarter total revenue increased by 17%, with earnings per diluted share at $1.22 compared to $0.96 in the prior year [9][10] Business Line Data and Key Metrics Changes - Consolidated same store sales increased by 6% in the fourth quarter, with brick-and-mortar sales up 5.5% and e-commerce sales up 9.8% [9][10] - Merchandise margin expanded by 210 basis points in the fourth quarter and by 130 basis points for the full year [21][25] - Exclusive brand penetration increased to 38.6% for fiscal 2025, with a growth of 1,500 basis points over the last four years [21] Market Data and Key Metrics Changes - The company opened 60 new stores in fiscal 2025, expanding its footprint into four new states, ending the year with 459 stores [14] - The customer loyalty database grew by 14% year-over-year, reaching 9,600,000 active customers [17] Company Strategy and Development Direction - The company plans to open 65 to 70 new stores in fiscal 2026, maintaining a growth rate of 15% [15] - The strategy includes a focus on exclusive brands and managing pricing in response to tariff impacts [12][22] - The company aims to maintain merchandise margin rates while potentially sacrificing some margin to gain market share [23] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating ongoing uncertainties related to tariffs and consumer demand [10][29] - The company anticipates a potential decline in merchandise margin in the second half of fiscal 2026 due to tariff impacts [22][29] - Management highlighted the importance of maintaining strong customer relationships and brand loyalty as key drivers for future growth [18][35] Other Important Information - The company has authorized a share repurchase program of up to $200,000,000, reflecting confidence in cash flow generation [34] - The company expects to face a tariff impact of approximately $8,000,000 in fiscal 2026, with strategies in place to mitigate this [11][41] Q&A Session Summary Question: Can you elaborate on April and May same store sales? - Management noted strong sales trends in the first quarter, with a guidance of plus 6% for the entire quarter, consistent with Q4 [38][40] Question: Can you elaborate on pricing power for the Boot Barn brand? - Management indicated that they have seen good pricing power, with typical price increases absorbed by customers, but expect some elasticity of demand due to mid-single-digit price increases [41][42] Question: What about product shortages from China? - Management stated that only 5% of exclusive brand products are sourced from China, with efforts to diversify production to other countries [48][49] Question: How do you plan to leverage SG&A expenses? - Management expects to leverage SG&A through normalized incentive compensation and lower legal expenses, benefiting from new store openings [78] Question: What is the outlook for merchandise margins? - Management anticipates strong margins in the first half of fiscal 2026 but expects pressure in the second half due to tariffs [70][71] Question: How is the competitive landscape behaving? - Management noted that larger competitors remain rational, while smaller mom-and-pop retailers may face challenges due to price increases [90][91]

Financial Data and Key Metrics Changes - Full year fiscal 2025 revenue reached a record $1.9 billion, reflecting a $1 billion sales growth over the last four fiscal years, driven by 186 new stores and strong same-store sales growth [6][8] - Earnings per diluted share increased by 23% to $5.88, up $1.08 from the prior year [6] - Fourth quarter total revenue increased by 17%, with earnings per diluted share at $1.22 compared to $0.96 in the prior year [7][8][23] Business Line Data and Key Metrics Changes - Merchandise margin expanded by 130 basis points for the full year and by 210 basis points in the fourth quarter [20][23] - Same-store sales increased by 6% in the fourth quarter, with brick-and-mortar stores up 5.5% and e-commerce up 9.8% [7][15][23] - Exclusive brand penetration increased to 38.6% for fiscal 2025, with a growth of 1,500 basis points over the last four years [20] Market Data and Key Metrics Changes - The company opened 60 new stores in fiscal 2025, expanding its footprint into four new states, ending the year with 459 stores [12][13] - The customer loyalty database grew by 14% year-over-year, reaching 9.6 million active customers [16] Company Strategy and Development Direction - The company plans to open 65 to 70 new stores in fiscal 2026, maintaining a 15% growth rate in new units [13][31] - The strategic initiatives focus on new store growth, same-store sales, omnichannel expansion, and merchandise margin improvement [12][18][20] - The company is diversifying its supply chain to reduce reliance on Chinese production, with expectations that only 5% of exclusive brand goods will be sourced from China in the second half of fiscal 2026 [11] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating ongoing uncertainties related to tariffs and consumer demand, with a proactive approach to pricing and inventory management [8][9][27] - The company anticipates a potential decline in merchandise margin in the second half of fiscal 2026 due to tariff impacts, but expects to maintain overall margin rates through strategic pricing [21][30] Other Important Information - The company has authorized a share repurchase program of up to $200 million, reflecting confidence in cash flow generation [33] - The guidance for fiscal 2026 includes a total sales range of $2.07 billion to $2.15 billion, with same-store sales expected to increase by 2% at the high end [28][30] Q&A Session Summary Question: Can you elaborate on April and May same-store sales? - Management noted strong sales trends in the first quarter, with a consistent performance across major merchandise categories, but does not anticipate accelerating guidance for the entire quarter [37][39] Question: Can you elaborate on pricing power and tariff headwinds? - Management indicated that tariffs are expected to impact margins by approximately $8 million, with price increases anticipated in the summer [40][41] Question: How are you thinking about product shortages from China? - Management expressed confidence in their diversified sourcing strategy, with only 5% of exclusive brand products expected from China [46][47] Question: Can you discuss SG&A leverage and tariff impacts for fiscal 2027? - Management expects to leverage SG&A through normalized expenses and new store contributions, while acknowledging that tariff costs may carry into fiscal 2027 [72][74] Question: What is the strategy for pricing adjustments? - Management is evaluating pricing on a product-by-product basis, considering psychological price points and exclusive brand penetration opportunities [82][84] Question: How is the competitive landscape behaving? - Management noted that larger competitors remain rational, while smaller mom-and-pop retailers may face challenges due to price increases [88][89] Question: How are new markets performing compared to legacy markets? - Management highlighted that new store openings have positively impacted e-commerce sales, particularly in states like New York [92][93]

Financial Data and Key Metrics Changes - Full year fiscal 2025 revenue reached a record $1,900,000,000, marking a $1,000,000,000 increase over the last four fiscal years, driven by 186 new stores and strong same-store sales growth [5][6] - Earnings per diluted share grew by 23% to $5.88, an increase of $1.08 over the prior year [5] - Fourth quarter total revenue increased by 17%, with earnings per diluted share at $1.22 compared to $0.96 in the prior year [6][22] Business Line Data and Key Metrics Changes - Merchandise margin expanded by 130 basis points for the full year and by 210 basis points in the fourth quarter [5][19] - Same-store sales increased by 6% in the fourth quarter, with brick-and-mortar stores up 5.5% and e-commerce up 9.8% [6][22] - Exclusive brand penetration increased to 38.6% for fiscal 2025, with a growth of 1,500 basis points over the last four years [19] Market Data and Key Metrics Changes - The company opened 60 new stores in fiscal 2025, expanding its footprint into four new states, ending the year with 459 stores [11] - The customer loyalty database grew by 14% year-over-year, reaching 9,600,000 active customers [14] Company Strategy and Development Direction - The company plans to open 65 to 70 new stores in fiscal 2026, maintaining a 15% growth rate in new units [12] - The focus remains on expanding exclusive brands while driving growth within third-party partners, with a goal to maintain merchandise margin rates despite potential price increases due to tariffs [20][21] - The company is diversifying its supply chain to reduce reliance on China, with only 5% of exclusive brand goods expected to be sourced from China in the second half of fiscal 2026 [10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating ongoing uncertainties related to tariffs and consumer demand, with a strong trend of growth continuing into fiscal 2026 [7][27] - The company anticipates potential merchandise margin pressure in the second half of fiscal 2026 due to tariff impacts, but expects to leverage strong sales growth in the first half [20][27] Other Important Information - The company has authorized a share repurchase program of up to $200,000,000, reflecting confidence in strong cash flow generation [32] - Inventory increased by 25% year-over-year, attributed to new store openings and proactive shipment pull-forwards in anticipation of tariffs [26] Q&A Session Summary Question: Can you elaborate on April and May same-store sales? - Management noted strong sales trends in the first six weeks of Q1, with a consistent performance across major merchandise categories, expecting to maintain positive comp growth [37][38] Question: Can you elaborate on pricing power and tariff headwinds? - Management indicated that tariffs are expected to impact margins by approximately $8,000,000, with price increases anticipated in the summer [39][41] Question: How are new markets performing compared to legacy markets? - New store openings have positively impacted e-commerce sales, with notable increases observed in states like New York [95][96] Question: What is the strategy for managing SG&A expenses? - Management expects to leverage SG&A through normalized expenses and increased store count, which helps cover fixed costs [72][77] Question: How does the company view the competitive landscape? - Management has not observed significant changes in competitor behavior, noting that larger competitors remain rational while smaller players may face challenges [90][91]