Financial Data and Key Metrics Changes - Total company revenue for Q3 fiscal 2026 was $1.025 billion, a decrease of 4% year-over-year and 5.9% in constant currency [22] - Earnings per share increased approximately 30% to $0.81 [7] - Gross margin was 60.8%, a decline of 230 basis points, but underlying gross margin expanded by 70 basis points due to better full price sell-throughs [24] Business Line Data and Key Metrics Changes - Michael Kors revenue decreased 5.6% year-over-year, with retail sales down mid-single digits and wholesale sales also declining mid-single digits [23] - Jimmy Choo revenue increased 5% year-over-year, with retail sales improving sequentially and wholesale revenue growing double digits [23][15] - Michael Kors saw a healthier sales mix with higher average unit retail (AUR) and gross margins due to reduced promotional activity [8] Market Data and Key Metrics Changes - Revenue in the Americas for the company decreased 7%, while EMEA increased 5% and Asia decreased 4% [22] - Michael Kors revenue by geography showed a 9% decrease in the Americas, a 6% increase in EMEA, and a 1% decrease in Asia [23] - Jimmy Choo's revenue in the Americas increased 23%, while EMEA increased 3% and Asia decreased 10% [23] Company Strategy and Development Direction - The company completed the sale of Versace to strengthen its financial foundation and reduce debt, ending the quarter with $80 million in net debt [7][26] - Strategic initiatives focus on strengthening brand desirability through compelling storytelling and modern product offerings [5][6] - Plans to renovate approximately 50% of the store fleet over the next three years to enhance the luxury retail experience [14] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in returning to growth in fiscal 2027, supported by strategic initiatives and improved consumer engagement [6][28] - The company anticipates sequential improvement in retail trends in Q4 and a return to revenue growth in FY 2027 [21][28] - Management highlighted the importance of leveraging advanced data analytics to create deeper consumer connections [11] Other Important Information - The company expects year-end inventory levels to be approximately flat to the prior year, with a decrease in units offset by higher tariff rates [25] - Operating expenses decreased by $32 million, resulting in 80 basis points of expense leverage [25] Q&A Session Summary Question: Drivers of sequential improvement in Michael Kors retail sales - Management noted strategic initiatives are starting to take hold, with improved full price sell-throughs and reduced promotional activity leading to healthier business metrics [31][34] Question: Expected revenue growth next year - Management indicated cautious optimism for revenue growth, with expectations for continued sequential improvement in retail trends [40][46] Question: Performance by price range and age demographics - Management observed strong trends in the $150-$250 price range, particularly among Gen Z consumers, indicating a successful strategic pricing architecture [81] Question: Plans for free cash flow utilization - Management is focused on maintaining a healthy balance sheet and will consider options such as store updates and potential stock buybacks [91]