-The holiday season, that time of year when the city that never sleeps takes a moment to reflect. Lights twinkle up and down the avenues of New York City, from the posh storefronts down in Soho to the ornate window displays up along Fifth Avenue to the epicenter in between the miracle and magic of Macy's on 34th Street. - Christmas isn't just a day, it's a frame of mind. -American retailers seize on the season, hoping to capitalize on that frame of mind, creating something that lasts beyond just the holiday ...

Financial Data and Key Metrics Changes - Total company sales for Q3 were approximately $151 million, down 0.5% compared to Q3 2024, but in line with the higher end of expectations [10] - Total company comparable sales decreased by 0.9% compared to a decrease of 0.8% last year [9] - Q3 gross profit was about $107 million, down about $1 million compared to Q3 2024, with a gross margin of 70.9%, down 50 basis points year-over-year [10][11] - Adjusted net income per diluted share was 76 cents compared to 89 cents last year [12] - Adjusted EBITDA was $24.3 million in the quarter, down from $26.8 million in Q3 2024 [11] Business Line Data and Key Metrics Changes - Direct sales increased by 2% compared to the prior year, while store sales decreased by 2.6% [10] - The company saw positive responses in product categories such as jackets and bottoms, particularly in fashion denim and faux suede [3][29] Market Data and Key Metrics Changes - The competitive market became very promotional early in Q4, leading to increased price sensitivity among customers [4][21] - The company experienced a soft start in Q4, with holiday product assortments not resonating as planned [4][21] Company Strategy and Development Direction - The company is focused on three strategic priorities: evolving product assortment, enhancing the customer journey, and improving operational efficiency [5][7] - A new Chief Growth Officer has been appointed to lead e-commerce and AI initiatives, indicating a focus on technology and growth [8][33] - The company plans to test localized merchandising strategies, with promising early results from a pilot in New York [5][39] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the foundation of the business and the progress made toward future opportunities [9] - The company anticipates a challenging Q4 due to elevated promotional activity and macroeconomic factors affecting consumer sentiment [16][25] - For the full year, the company expects sales to be down about 3% and comparable sales to be down about 4% compared to fiscal 2024 [17] Other Important Information - The company opened two new stores in Q3 and plans to open seven new stores in Q4, indicating ongoing expansion efforts [14][17] - The company repurchased 115,612 shares for approximately $2 million in Q3, with $18 million remaining on the share repurchase authorization [12] Q&A Session Summary Question: How is the company thinking about next year regarding merchandising and marketing? - Management noted that they will be able to influence product assortments by the end of Q1 and are encouraged by learnings from Q3 [20][23] Question: What worked well in Q3 and Q2? - Strength was noted in product categories such as bottoms and jackets, with newness in the assortment performing well [28][29] Question: How is technology evolving in the business? - The company has laid a foundation for technology improvements and is excited about the capabilities that AI can bring to operational efficiency [30][33] Question: What is the pricing strategy going into 2026? - The company plans to continue a strategic approach to pricing, focusing on value and quality while being selective about price increases [56][58] Question: How does the company plan to manage inventory for next year? - Inventory will be planned conservatively, considering the evolving product assortments and uncertain consumer sentiment [49][50]

Core Insights - KP Tissue Inc. (KPT) reported strong profitability in Q2 2025, with Adjusted EBITDA increasing by 11% year-over-year to $72.5 million, driven by higher sales volumes and favorable selling prices [3][9] - The company announced a $35 million investment in its Memphis manufacturing facility to enhance efficiency and support its growing U.S. business [4][14] - U.S. sales grew by 12% in the first half of 2025, although growth slowed in Q2 due to front-loaded shipments and softness in the Away-From-Home (AFH) market [3][6] Financial Performance - Revenue for Q2 2025 was $536.1 million, up from $509.8 million in Q2 2024, marking a 5.2% increase [6][10] - Cost of sales rose to $462.2 million in Q2 2025, an increase of 7.2% from $431.2 million in Q2 2024, primarily due to higher sales volume and pulp prices [7] - Selling, general and administrative (SG&A) expenses increased by 11.1% to $47.2 million in Q2 2025, compared to $42.5 million in Q2 2024 [8] Profitability Metrics - Adjusted EBITDA for Q2 2025 was $72.5 million, up from $65.3 million in Q2 2024, reflecting an 11% increase [9][10] - Net income for Q2 2025 was $22.1 million, compared to $10.6 million in Q2 2024, representing an increase of $11.5 million [11][10] - The company declared a quarterly dividend of $0.18 per share, to be paid on October 15, 2025 [15][10] Investment and Growth Strategy - The investment in the Memphis facility aims to deploy a state-of-the-art converting line for bathroom tissue and paper towels, enhancing production capabilities [4][14] - The company expects stronger performance in Q3 2025, projecting Adjusted EBITDA in the range of $75 million to $80 million [5] Liquidity Position - As of June 30, 2025, total liquidity was reported at $293.1 million, indicating a solid financial position [12]

Core Insights - KP Tissue Inc. reported strong Q1 2025 financial results, with Adjusted EBITDA of $75.8 million, a 12.9% increase year-over-year, and revenue growth of nearly 14% [3][5][9] Financial Performance - Revenue for Q1 2025 was $546.1 million, up from $479.4 million in Q1 2024, marking an increase of $66.7 million or 13.9% [5][8] - Cost of sales increased to $451.0 million in Q1 2025 from $394.0 million in Q1 2024, reflecting a rise of $57.0 million or 14.5% [6] - Selling, general and administrative (SG&A) expenses rose to $51.2 million in Q1 2025, an increase of $7.1 million or 16.1% compared to Q1 2024 [7] - Net income for Q1 2025 was $15.4 million, compared to $9.0 million in Q1 2024, an increase of $6.4 million [10][12] Segment Performance - The Consumer segment revenue was $465.2 million in Q1 2025, up from $404.3 million in Q1 2024, while the Away-From-Home (AFH) segment revenue increased to $80.9 million from $75.1 million [36] - Adjusted EBITDA for the Consumer segment was $76.1 million, compared to $62.7 million in the previous year, while the AFH segment saw a decrease in Adjusted EBITDA to $2.8 million from $7.8 million [37] Operational Developments - The newly deployed LDC paper machine in Sherbrooke is expected to meet all in-house paper requirements starting Q2 2025, contributing to operational efficiency [3] - The company is closely monitoring the impact of changing tariffs on its business and has developed contingency plans [3] Liquidity and Dividends - Total liquidity as of March 31, 2025, was $356.8 million, with $4.4 million held for the Sherbrooke Expansion Project [11] - A quarterly dividend of $0.18 per share has been declared, to be paid on July 15, 2025 [13]