Financial Data and Key Metrics Changes - For the full year 2025, net sales increased by 4.4% to $600 million, marking consecutive growth [4][25] - Gross margin expanded by 30 basis points to 57.3%, despite facing tariff headwinds that negatively impacted margins by approximately 100 basis points [7][26] - Adjusted EBITDA for the year was $19.7 million, or 3.3% of net sales, down from $23.3 million or 4.1% the previous year [26] Business Line Data and Key Metrics Changes - The U.S. region, the largest market, saw net sales growth of 7% to $394 million, accounting for 66% of total business [5] - Princess Polly delivered double-digit net sales growth, with a successful omni-channel expansion strategy, including the opening of 7 new stores in the U.S. [5][10] - Petal & Pup performed well, particularly in dresses and event wear, and expanded its wholesale presence, especially at Nordstrom [15][17] Market Data and Key Metrics Changes - Net sales in Australia increased by 1.6% to $58.1 million, indicating a return to growth in the region [23] - Total orders increased by 6.4% year-over-year, reaching 2.2 million [24] Company Strategy and Development Direction - The company aims to attract and retain customers through direct consumer channels, expand brand awareness via physical retail and strategic wholesale partnerships, and streamline operations [8][9] - AI integration is a key focus to enhance customer experience and operational excellence, with expectations for significant margin expansion in the coming years [9] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's position for accelerated growth and expanding margins entering 2026, with a focus on operational discipline and inventory health [8][30] - The company anticipates net sales for fiscal 2026 to be between $625 million and $635 million, representing growth of 4.2% to 5.8% [28] Other Important Information - The company completed a structural transformation of its supply chain, with approximately 50% of U.S. sourcing now from outside China [6] - Inventory levels decreased by 10% year-over-year, reflecting improved inventory management practices [28] Q&A Session Summary Question: Can you walk us through the key drivers of the EBITDA guide for 2026? - Management indicated that the bulk of the expected EBITDA improvement will come from gross margin expansion, moving past the previous year's headwinds [34][35] Question: What percentage of revenue now comes from retail, and how does it compare to direct-to-consumer growth? - Management noted strong productivity in retail stores and indicated that store openings are expected to continue driving new customer acquisition [38][39] Question: How do you envision the business retail versus wholesale for Princess Polly? - Management highlighted the opportunity for growth in both retail and wholesale, with a focus on expanding the store footprint for Princess Polly and wholesale for Petal & Pup [43][45] Question: How are you thinking of the cadence with top line and adjusted EBITDA? - Management explained that they expect mid-single digit growth for the full year, with a more challenging comparison in the first quarter due to previous disruptions [47][48] Question: Can you provide more detail on the inventory situation? - Management confirmed that inventory is down 10%, attributing this to improved sourcing and inventory management practices [51][52] Question: Is the Australian market back to growth? - Management confirmed that the Australian market has seen four consecutive quarters of growth, with expectations for moderate growth moving forward [54][55]