Financial Data and Key Metrics Changes - First quarter net sales totaled $239 million, down just 6% in constant currency, with core sales declining 8% year-over-year, showing a sequential improvement from a 12% decline in Q4 [27][28] - Gross margin expanded to 61.1%, an increase of 880 basis points compared to the previous year, primarily due to higher product margins and reduced promotional activity [28][29] - Adjusted operating income improved from a loss of $20 million last year to a profit of $10 million this year, resulting in an adjusted operating margin of 4.3% [30] Business Line Data and Key Metrics Changes - The Fossil traditional watch business posted growth of 7% globally, excluding the impact of the additional retail week and store closures, up from low single-digit growth in Q4 [28] - The Kors brand returned to growth with double-digit gains in Q1, while Armani Exchange also saw double-digit growth, although the Armani brand faced challenges in China [14] Market Data and Key Metrics Changes - The wholesale business for the core brand grew in double digits year-over-year in the U.S., with continued momentum in scalable markets like India [15] - Inventory levels totaled $182 million, down 19% compared to a year ago, indicating effective inventory management [31] Company Strategy and Development Direction - The turnaround plan focuses on three pillars: refocusing on core brands, rightsizing the cost structure, and strengthening the balance sheet [8][19] - The company is investing in brand marketing and enhancing storytelling around major product launches to drive engagement and demand [12][13] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to drive growth despite macroeconomic challenges, citing strong demand trends and effective turnaround initiatives [7][24] - The company reiterated its full-year guidance, expecting worldwide net sales to decline in the mid to high teens, while anticipating continued narrowing of year-over-year sales declines [37] Other Important Information - The company has taken steps to reduce SG&A expenses by $17 million, representing an 11% decrease versus the prior year [29] - A sale-leaseback agreement for the European distribution center is expected to close in Q2, bringing in excess of $20 million to the balance sheet [31] Q&A Session Summary Question: How is the company addressing the global tariff environment? - Management highlighted the company's diverse global footprint and established vendor relationships as key advantages in mitigating tariff impacts, with plans to increase prices strategically [33][36] Question: What are the expectations for the remainder of the year? - The company expects to continue narrowing year-over-year sales declines and remains confident in its ability to offset potential tariff impacts, even under challenging macroeconomic conditions [37]