Financial Data and Key Metrics Changes - The company reported record net sales of $1,100,000,000 for the first quarter, representing an 8% increase compared to the previous year, exceeding the expected range of 4% to 6% [7][16] - Operating margin was 9.3%, with earnings per share of $1.59, both above the ranges provided earlier [8][18] - The company returned $200,000,000 to shareholders through share repurchases, totaling 5% of shares outstanding as of the beginning of the year [8][19] Business Line Data and Key Metrics Changes - Hollister brand achieved a 22% net sales growth, with comparable sales up 23%, marking the eighth consecutive quarter of growth [9][10] - Abercrombie brand experienced a 4% net sales decline, with comparable sales down 10%, primarily due to a decline in average unit retail (AUR) as the company worked through winter carryover inventory [11][17] Market Data and Key Metrics Changes - The Americas region saw a 7% growth, while EMEA grew by 12% and APAC by 5% [9][16] - In EMEA, strong performance was noted in the UK and Germany, with digital demand complementing the positive reception of new store openings [9][10] Company Strategy and Development Direction - The company aims to add around 100 new physical experiences in total for the year, including 60 new stores and 40 remodels, while planning to be net store openers [15][22] - The focus remains on global growth, with an emphasis on marketing, technology, and new channel partnerships to strengthen brand reach [14][20] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving sequential improvement in Abercrombie's sales in the second half of the year, driven by a flexible operating model that allows for quick adjustments based on customer feedback [12][40] - The company anticipates a full-year net sales growth of 3% to 6%, with operating margins expected to be in the range of 12.5% to 13.5% [21][22] Other Important Information - The company is not planning broad-based ticket price increases despite anticipated tariff impacts, which are expected to cost around $50,000,000 for 2025 [20][21] - The tax rate for the quarter was in line with expectations at 25%, with a forecasted tax rate around 27% for the full year [18][21] Q&A Session Summary Question: Insights on Hollister and Abercrombie's outlook - Management highlighted the flexibility of their model in responding to customer trends, with expectations for Abercrombie to see an inflection in the back half of the year [28][40] Question: Real estate strategy and store openings - The company plans to close 20 stores this year, down from 40 last year, due to successful landlord negotiations and opportunities to maintain store productivity [32][33] Question: Full-year sales outlook and confidence - Management expressed confidence in the higher end of the sales guidance due to strong balance sheet and ongoing investments in marketing and technology [36][38] Question: Traffic and inventory management - Positive traffic was reported for both Abercrombie and Hollister, with management indicating that carryover inventory levels are normalized compared to previous years [44][45] Question: Gross margin expectations - Management expects sequential improvement in gross margins as they work through freight and carryover pressures, with flat AURs anticipated for the second quarter [48][88] Question: Promotions and inventory growth - Promotions will be aligned with inventory levels and customer demand, with expectations for fewer promotions in the back half of the year as inventory normalizes [92][95] Question: Growth expectations in Europe and Asia - Management confirmed expectations for growth across all regions, with strong performance noted in the UK and Germany [96][98]