Key Takeaways lululemon is navigating softer consumer demand as it tests pricing power in FY25.U.S. pressure, higher markdowns and tariffs are weighing on margins while prices rise selectively.Design cycles are accelerating with more newness to revive key franchises and support pricing.lululemon athletica inc. (LULU) enters the back half of fiscal 2025 navigating a far more cautious consumer backdrop, raising the question of whether its long-standing pricing power can withstand the ongoing softer spending e ...

Core Insights - Birkenstock anticipates fourth quarter revenues of at least 520 million euros, reflecting a growth of at least 14% on a reported basis and 18% in constant currency [1] - The company expects full year revenue to reach at least 2.09 billion euros, with a reported growth of 15.9% and 17.5% in constant currency, exceeding previous guidance by 15% to 17% [2] - Birkenstock reaffirmed its adjusted EBITDA target for fiscal year 2025 to be between 31.3% and 31.8%, despite challenges from foreign exchange rates [2] Acquisition and Expansion - Birkenstock has acquired a new production facility near Dresden, Germany for a net purchase price of 18 million euros, with the acquisition expected to close in the fiscal first quarter [3] - The facility encompasses approximately 840,000 square feet of production and logistics space, along with 860,000 square feet of undeveloped land [4] - The acquisition opportunity arose due to the bankruptcy of the current owner, allowing Birkenstock to secure the property at an attractive price of 240 euros per square meter [5] Capacity and Growth Strategy - The new facility will enhance Birkenstock's manufacturing capacity, particularly for sandals, clogs, and footbeds, and is expected to be operational by the end of fiscal 2027 [5][6] - The incremental capacity will support the company's revenue growth ambitions and provide flexibility across product groups [6] - Analysts express optimism regarding Birkenstock's growth potential, with plans to expand into 5,000 additional retail doors across EMEA and the Americas [6][7]

Footwear Industry Considerations - Sandals can be a sartorial minefield, potentially harming wallets, feet, and aesthetics [1] - It is worth keeping a few things in mind when choosing sandals [1]

Core Viewpoint - Birkenstock (BIRK) is positioned well to continue its trend of beating earnings estimates, supported by a strong history of performance in the Zacks Shoes and Retail Apparel industry [1]. Earnings Performance - Birkenstock has consistently surpassed earnings estimates, achieving an average beat of 10.25% over the last two quarters [2]. - In the most recent quarter, the company reported earnings of $0.58 per share, exceeding the Zacks Consensus Estimate of $0.57 per share by 1.75% [3]. - In the previous quarter, Birkenstock's earnings were $0.19 per share against an expectation of $0.16 per share, resulting in a surprise of 18.75% [3]. Earnings Estimates and Predictions - There has been a favorable shift in earnings estimates for Birkenstock, with a positive Zacks Earnings ESP (Expected Surprise Prediction) indicating a strong likelihood of another earnings beat [6]. - Stocks with a positive Earnings ESP and a Zacks Rank of 3 (Hold) or better have a nearly 70% chance of producing a positive surprise [7]. - Birkenstock currently has an Earnings ESP of +0.43%, suggesting analysts are optimistic about the company's earnings prospects [9]. Upcoming Earnings Report - The next earnings report for Birkenstock is expected to be released on August 14, 2025 [9].

Core Insights - Descartes Systems Group announced that Walking Comfort is utilizing Descartes Sellercloud™ to enhance ecommerce growth by centralizing and synchronizing product listings, inventory, orders, and fulfillment across various online sales channels [1][2] Company Overview - Walking Comfort is a Utah-based retailer specializing in footwear, including running shoes, slippers, sandals, and accessories like insoles. The company was founded in 2008 and operates two brick-and-mortar locations with a workforce of 35 employees [4] Product and Service Details - Descartes Sellercloud is a cloud-based ecommerce platform designed for small and mid-market retailers, distributors, wholesalers, and manufacturers. It centralizes the management of catalog, inventory, orders, purchasing, fulfillment, and shipping, featuring over 350 integrations with various marketplaces and logistics partners [2][3] - The platform has enabled Walking Comfort to save hundreds of hours weekly by automating data consolidation across sales channels, reducing shipping costs by over 55%, and allowing for dropshipping directly from retail locations when convenient [2] Operational Benefits - The use of Descartes Sellercloud has allowed Walking Comfort to reduce operational complexity by updating inventory and orders in real-time, preventing underselling and overselling, and maintaining compliance with marketplace requirements [3]

Core Viewpoint - The market anticipates Birkenstock (BIRK) to report a year-over-year increase in earnings driven by higher revenues for the quarter ending March 2025, with actual results being crucial for stock price movement [1][2]. Earnings Expectations - The consensus EPS estimate for Birkenstock is $0.57 per share, reflecting a year-over-year increase of +29.6% [3]. - Expected revenues are projected at $610.3 million, which is a 16.8% increase from the same quarter last year [3]. Estimate Revisions - Over the last 30 days, the consensus EPS estimate has been revised 0.86% higher, indicating a positive reassessment by analysts [4]. - The Most Accurate Estimate for Birkenstock is higher than the Zacks Consensus Estimate, resulting in an Earnings ESP of +2.20% [10][11]. Earnings Surprise Prediction - A positive Earnings ESP is a strong indicator of a potential earnings beat, especially when combined with a Zacks Rank of 1 (Strong Buy), 2 (Buy), or 3 (Hold) [8]. - Birkenstock currently holds a Zacks Rank of 2, suggesting a high likelihood of beating the consensus EPS estimate [11]. Historical Performance - In the last reported quarter, Birkenstock exceeded the expected earnings of $0.16 per share by delivering $0.19, resulting in a surprise of +18.75% [12]. - Over the past four quarters, the company has beaten consensus EPS estimates three times [13]. Conclusion - Birkenstock is positioned as a compelling candidate for an earnings beat, but investors should consider other influencing factors before making investment decisions [16].

Financial Data and Key Metrics Changes - The company reported enterprise revenues of $937 million, a 1% increase compared to the prior year, exceeding guidance which anticipated a decline of approximately 1.5% [4][24] - Adjusted gross margins improved to 57.8%, gaining 180 basis points year-over-year, while adjusted operating margins were 23.8%, exceeding guidance by over 200 basis points [5][26] - Adjusted diluted earnings per share reached $3, nearly 20% above the high end of the guidance range [6][28] Business Line Data and Key Metrics Changes - Crocs brand revenues were $762 million, up 4% year-over-year, driven by a 5% increase in wholesale and a 3% increase in direct-to-consumer (DTC) sales [25] - Hey Dude brand revenues declined by 10% to $176 million, but DTC sales grew by 8%, indicating a recovery from previous quarters [26] - Adjusted gross margin for the Crocs brand was 60.7%, up 260 basis points, while Hey Dude's adjusted gross margin was 46.6%, down 120 basis points due to supply chain cost pressures [27] Market Data and Key Metrics Changes - International revenue grew by 12%, with China showing over 30% growth compared to the prior year, supported by the addition of 40 new partner doors [17][25] - North American revenue was down 3% year-over-year, but performance exceeded expectations [19][25] - Western Europe also saw robust growth, particularly in France and Germany [25][78] Company Strategy and Development Direction - The company is focused on maintaining competitive advantages and adapting to a volatile macroeconomic environment, including managing sourcing and cost structures in response to tariffs [6][10] - Strategic investments are being made to enhance brand relevance and expand product offerings beyond clogs, particularly in sandals [12][13] - The company aims to leverage social commerce and digital marketing to drive brand engagement and sales [16][15] Management's Comments on Operating Environment and Future Outlook - Management expressed caution regarding the unpredictability of the global trade environment and its potential impact on consumer demand [10][48] - The decision to withdraw guidance for 2025 was primarily due to the difficulty in predicting the financial impact of tariffs [29][30] - Despite challenges, management remains optimistic about the company's ability to generate significant free cash flow and maintain profitability [11][28] Other Important Information - The company identified an additional $50 million in cost savings for 2025 and is actively managing inventory levels [10][32] - The liquidity position is strong, with $166 million in cash and $679 million in borrowing capacity [28] Q&A Session Summary Question: Comments on sustainability of gross margins and pricing opportunities - Management indicated confidence in the sustainability of gross margins due to vendor negotiations and improved efficiencies, while also acknowledging pricing as a lever to mitigate costs [36][39][41] Question: Thoughts on not guiding Q2 revenue and mitigation strategies - Management noted strong performance in April but emphasized caution in predicting future trends due to the uncertain global trade environment [45][48][49] Question: Level of marketing spend in 2025 - The company plans to maintain elevated marketing spending to engage consumers, despite the uncertain backdrop [53][54] Question: Drivers for Crocs international growth - Management highlighted brand penetration as a key driver, with significant growth opportunities in China, India, and Western Europe [75][78] Question: Impact of price increases on wholesale and DTC channels - Management stated that while they have flexibility in DTC pricing, they prefer coordinated pricing strategies across channels [84][86] Question: Current state of wholesale channel and inventory management - Management confirmed that major retailers are planning conservatively, aligning with the company's strategy to avoid excess inventory [90][91]

Company Performance - Carter's reported quarterly earnings of $0.66 per share, exceeding the Zacks Consensus Estimate of $0.53 per share, but down from $1.02 per share a year ago, representing an earnings surprise of 24.53% [1] - The company posted revenues of $629.83 million for the quarter ended March 2025, surpassing the Zacks Consensus Estimate by 1.37%, but down from $661.49 million year-over-year [2] - Over the last four quarters, Carter's has surpassed consensus EPS estimates four times and topped consensus revenue estimates three times [2] Stock Outlook - Carter's shares have declined approximately 29.5% since the beginning of the year, compared to a decline of 6.8% for the S&P 500 [3] - The current consensus EPS estimate for the upcoming quarter is $0.37 on revenues of $578.83 million, and for the current fiscal year, it is $3.72 on revenues of $2.79 billion [7] Industry Context - The Shoes and Retail Apparel industry, to which Carter's belongs, is currently ranked in the bottom 8% of over 250 Zacks industries, indicating potential challenges for stock performance [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which could impact Carter's stock performance [5]