Financial Data and Key Metrics Changes - In Q3 fiscal 2025, consolidated net sales were $307 million, slightly down from $308 million in Q3 fiscal 2024, within the guidance range of $295 million to $310 million [22] - Adjusted gross margin contracted by 200 basis points to 61%, primarily due to increased cost of goods sold from tariffs and a change in sales mix [24] - Adjusted SG&A expenses increased by 4% to $209 million compared to $201 million last year, leading to an adjusted operating loss of $18 million, or a negative 5.8% operating margin [25][26] - The company ended with an adjusted net loss per share of $0.92, influenced by non-cash impairment charges totaling $61 million related to the Johnny Was trademark [26] Business Line Data and Key Metrics Changes - Lilly Pulitzer experienced strong growth with total sales increasing year-over-year, driven by double-digit growth in retail and high single-digit growth in e-commerce [23] - The Emerging Brands Group also posted strong year-over-year sales gains, while Tommy Bahama and Johnny Was saw low single-digit negative comps [23][24] - Tommy Bahama's comps improved sequentially to down low single digits from down high single digits earlier in the year, indicating progress in addressing earlier weaknesses [8] Market Data and Key Metrics Changes - The overall retail environment remained highly competitive and promotional, with consumers showing heightened sensitivity to value [4][12] - The holiday selling period has been more promotional than the previous year, contributing to a slower start for the company [12][14] - The Emerging Brands Group, including Southern Tide and Duck Head, showed strong momentum, benefiting from loyal customer bases and focused product stories [17] Company Strategy and Development Direction - The company is focused on improving profitability and has begun implementing cost reduction initiatives, including efforts around indirect spend and SG&A efficiencies [19][20] - A new state-of-the-art fulfillment center is under construction, expected to enhance direct-to-consumer capabilities [7] - The company aims to refine its sourcing strategies to mitigate tariff impacts and improve product assortments for future seasons [20][19] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenges posed by tariffs and a competitive promotional environment, but expressed confidence in the long-term potential of the brands [18][19] - The company expects fourth-quarter performance to land below previous guidance due to a slower start to the holiday season [18] - Management remains focused on delivering fresh, differentiated products that align with brand heritage to meet consumer expectations [17][19] Other Important Information - The company anticipates a net tariff impact of approximately $25 million to $30 million for fiscal 2025, significantly affecting margins [30] - Capital expenditures are expected to decline significantly as the new fulfillment center is completed, allowing for reduced debt levels [20][28] Q&A Session Summary Question: How meaningful would the assortment gap be for the upcoming season? - Management indicated that the assortment issues were primarily related to current inventory and that future assortments would not face the same challenges due to improved tariff conditions [41][43] Question: What is the current promotional intensity in the marketplace? - Management noted that promotional intensity remains high but is expected to be responsive to market conditions while maintaining brand integrity [45][46] Question: Can you elaborate on the wholesale situation? - Management acknowledged cautious behavior from wholesale partners and indicated a strategic plan to manage inventory levels effectively [54][56] Question: What are the plans for price increases in spring 2026? - Management indicated that price increases would range from 4% to 8% to offset tariff impacts, with a focus on mitigating dollar impacts rather than percentage impacts [82]

Financial Data and Key Metrics Changes - In Q3 of fiscal 2025, consolidated net sales were $307 million, slightly down from $308 million in Q3 of fiscal 2024, within the guidance range of $295 million to $310 million [23] - Adjusted gross margin contracted by 200 basis points to 61%, primarily due to increased cost of goods sold from tariffs and a change in sales mix [25] - Adjusted SG&A expenses increased by 4% to $209 million compared to $201 million last year, driven by higher employment, occupancy, and depreciation costs [26] - The company reported an adjusted net loss per share of $0.92, with non-cash impairment charges totaling $61 million related to the Johnny Was trademark [27] Business Line Data and Key Metrics Changes - Lilly Pulitzer experienced strong growth with total sales increasing year-over-year, driven by double-digit growth in retail and high single-digit growth in e-commerce [24] - Tommy Bahama saw a low single-digit negative comp, although comps improved sequentially from down high single digits earlier in the year [8][24] - Johnny Was faced a high single-digit negative comp, leading to sales decreases, despite efforts to strengthen the brand through leadership changes and business improvement plans [10][24] Market Data and Key Metrics Changes - The overall consumer environment remained highly competitive and promotional, with consumers being selective in discretionary spending [4] - The holiday selling period was more promotional than the previous year, impacting sales performance [12] - The Emerging Brands Group showed strong momentum, with year-over-year sales gains, reflecting growing recognition and customer engagement [18] Company Strategy and Development Direction - The company is focused on improving profitability and has begun implementing cost reduction initiatives, including efforts around indirect spend and SG&A efficiencies [20] - There is a clear emphasis on enhancing merchandising effectiveness, marketing efficiency, and improving the go-to-market process, particularly for Johnny Was [46] - The company plans to continue investing in long-term brand strength while managing tariff impacts and promotional pressures [21][19] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenges posed by tariff-related product limitations and a highly promotional environment affecting holiday sales [12][19] - The company expects fourth-quarter performance to land below previous guidance due to a slower start to the holiday season [19] - Looking ahead to fiscal 2026, the company is optimistic about realizing benefits from cost reduction initiatives and improved merchandising strategies [20] Other Important Information - The company is in the final stages of constructing a new fulfillment center, which is expected to enhance direct-to-consumer capabilities [6] - Capital expenditures are expected to decline significantly as the new fulfillment center is completed [21] - The company anticipates a net tariff impact of approximately $25 million to $30 million for fiscal 2025, contributing to margin contraction [31] Q&A Session Summary Question: How meaningful would the assortment gap be for the upcoming season? - Management indicated that the assortment gap was primarily due to sourcing decisions made under tariff uncertainty, but they expect to have a more complete assortment for spring [38][40] Question: What is the current promotional intensity in the marketplace? - Management noted that promotional intensity remains high, but they are adapting their promotional strategies to remain competitive [42] Question: Can you elaborate on the wholesale situation? - Management acknowledged cautious behavior from wholesale partners, with less inventory needing liquidation through off-price channels [47][48] Question: What are the plans for price increases to offset tariffs? - Management indicated that price increases are planned for spring, ranging from 4% to 8%, to help mitigate tariff impacts [59] Question: How are the brands performing quarter to date? - Management reported broad-based weakness in the larger brands, while smaller brands continue to perform well [54]