Financial Data and Key Metrics Changes - Total revenue increased by 2% in reported dollars but decreased by 1% in constant dollars, showing an improving trend compared to the previous quarter [5][18] - Operating income reached $330 million, exceeding the guidance range of $260 to $290 million [5][18] - Net debt, excluding lease liabilities, decreased by $1.5 billion year-over-year, representing a 27% reduction [5][21] - Adjusted earnings per share was $0.52, down from $0.60 in the same quarter last year [20] Business Line Data and Key Metrics Changes - The North Face revenue grew by 4%, with growth in both wholesale and direct-to-consumer channels [6][18] - Timberland also saw a 4% revenue increase, driven by strong demand in the Americas [9][18] - Altra experienced significant growth, with revenue up over 35% compared to last year [11] - Vans revenue declined by 11%, attributed to channel rationalization actions [12][18] Market Data and Key Metrics Changes - The Americas region saw a 1% revenue decline, while EMEA was flat and APAC decreased by 2% [18] - Direct-to-consumer sales were down 2%, while wholesale remained flat [19] Company Strategy and Development Direction - The company is focused on returning to growth and has made progress in its turnaround strategy, with 65% of its business by revenue now growing [5][24] - Plans to sell the Dickies brand were announced, with a sale price of $600 million, aimed at reducing debt and focusing on core brands [6][16] - The company is committed to improving brand performance and expanding market share, particularly in underdeveloped regions like the Americas [50] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the uncertain global environment but expressed confidence in the company's strategy and ability to execute [25] - The company expects Q3 revenue to decline by 1% to 3% on a constant dollar basis, with a focus on the upcoming holiday season [21][25] - There is optimism about the potential for growth in the Americas and the overall global profile of the company [50] Other Important Information - The company is working towards medium-term targets of $500 to $600 million in operating income expansion by fiscal 2028 and a leverage ratio of 2.5 times or below [24] - Free cash flow through Q2 was negative $453 million, consistent with expectations due to seasonal working capital needs [20] Q&A Session Summary Question: Can you discuss the path back to growth for Vans? - Management indicated that increasing new product offerings and enhancing marketing strategies are key to returning Vans to growth, with expectations for improved performance in upcoming quarters [28][31] Question: Can you provide more details on gross margins? - Gross margins were impacted by foreign exchange and lower promotions, with expectations for continued improvement as pricing actions take effect in Q4 [35][43] Question: What are the initial signs from retailers regarding holiday orders? - Management noted it is too early to assess retailer behavior for the holiday season but expressed optimism based on product readiness and planning [55] Question: How is the company addressing tariffs and pricing? - The company plans to implement pricing actions in Q4 to offset tariffs, with expectations to mitigate the impact by fiscal 2027 [79][80] Question: What is the outlook for debt deleveraging? - Management is confident in achieving debt reduction targets through operational improvements and the sale of non-core assets, with a focus on growing EBITDA [92][93]