Financial Data and Key Metrics Changes - Total company revenue decreased 6% year-over-year to $797 million, with earnings per share at $0.50, reflecting a sequential improvement in trends across all regions [6][29][40] - Net income was $60 million, driven by better-than-expected results at both Michael Kors and Jimmy Choo [29] - Gross margin was approximately flat at 63%, with higher tariffs negatively impacting it by 30 basis points [32][33] Business Line Data and Key Metrics Changes - Michael Kors revenue decreased 6% year-over-year, with retail sales showing encouraging signs of momentum, including improved traffic trends and stronger full-price sell-throughs [6][8][30] - Jimmy Choo revenue decreased 6.4% year-over-year, with retail sales declining mid-single digits and wholesale sales declining double digits [17][31] - Accessories at Michael Kors saw strong full-price sell-throughs, while footwear revenue was down double digits [14][21] Market Data and Key Metrics Changes - Revenue in The Americas decreased 9%, while EMEA revenue increased 6%, and Asia revenue declined 15% [30] - Michael Kors experienced a decline of 8% in The Americas, while EMEA saw a 9% increase [30] - Jimmy Choo's revenue in The Americas decreased 12%, with EMEA revenue increasing by 1% [31] Company Strategy and Development Direction - The company is focused on stabilizing its business in fiscal 2026 and establishing a foundation for growth in fiscal 2027, with strategic initiatives aimed at reenergizing its luxury brands [5][6][17] - A significant store renovation program is planned, targeting approximately 50% of the store fleet over the next three years to enhance consumer experience [16][79] - The company aims to achieve $4 billion in revenues for Michael Kors and $800 million for Jimmy Choo over time [17][26] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about early signs of strategic initiatives working, with expectations for trends to improve in the second half of fiscal 2026 [26][41] - The global macroeconomic environment remains dynamic, with increased tariff rates impacting cost of goods sold [39][40] - The company anticipates a gradual sequential improvement in trends supported by new product deliveries and marketing initiatives [40][41] Other Important Information - The Versace transaction is expected to close in 2025, with proceeds aimed at reducing debt significantly [27][77] - The company is implementing a targeted price increase strategy to mitigate tariff impacts and improve gross margins [39][61] Q&A Session Summary Question: Can you elaborate on recent sell-through trends on product launches across direct-to-consumer and wholesale? - Management noted that consumer engagement with the new storytelling and marketing strategies has improved, leading to better sell-throughs and a positive response to new product designs [45][46][49] Question: How do you expect pricing strategy trends to translate to margins? - Management indicated that while tariffs are expected to impact margins negatively in the short term, strategic initiatives aimed at reducing promotional activity and increasing full-price sell-throughs will support margin improvement in the future [55][61][62] Question: Are you baking in growth in any quarter this year at Michael Kors? - Management confirmed that there is no year-over-year growth planned yet, but they anticipate growth in the full-price channel in the latter part of the fiscal year [68][70] Question: What do you expect the balance sheet to look like post-Versace sale? - Management expects minimal debt remaining on the balance sheet after the Versace transaction closes, allowing for a strong financial position moving forward [77][79] Question: What handbag families might be most important moving forward? - Management highlighted three handbag families—Layla, Nolita, and Bryant—as key products with strong sell-throughs, and emphasized the importance of storytelling around existing products [86][88]