Financial Data and Key Metrics Changes - First quarter net sales were $97 million, a decline of 1.9% year over year, but ahead of internal expectations [10][31] - Adjusted EBITDA was $25.7 million, representing a margin of 26.5%, down from 35.9% a year ago [33] - Cash and cash equivalents increased to $580.9 million from $507.5 million in Q1 of fiscal 2024 [35] - Inventory decreased to $79.2 million, down $15.5 million from Q1 of fiscal 2024 [35] Business Line Data and Key Metrics Changes - Specialty retail sales grew 12% year over year to $38.6 million, driven by strong retailer support [32] - Professional channel sales declined 10.9% to $34.5 million, largely due to softness in international markets [32] - Direct to consumer sales declined 7.2% to $23.9 million, aligning with a strategy to reduce promotional intensity [33] Market Data and Key Metrics Changes - North America saw modest growth, while international sales declined year over year but were better than expected [11][31] - The U.S. represented 51% of total net sales, with international sales making up 49% [36] Company Strategy and Development Direction - The company is focusing on a "Bonds and Beyond" strategy to position itself as a foundational health and beauty company [6][7] - Strategic vision is based on three pillars: moving beyond damage repair, empowering professionals, and creating emotional connections with consumers [8][9] - Plans to launch two to three strategic products annually, supported by strong consumer education and stylist engagement [22] Management's Comments on Operating Environment and Future Outlook - Management remains optimistic about the beauty category's resilience despite macroeconomic challenges [49] - The company is committed to executing its strategy and maintaining its 2025 guidance, reflecting confidence in its long-term vision [29][41] - Management acknowledges the ongoing complexity of operating through change but sees early signs of progress in transformation efforts [30] Other Important Information - The company invested $18.1 million in non-payroll sales and marketing, an increase of $4.8 million year over year [17] - The company has reduced outstanding debt by $300 million, lowering its gross leverage ratio and unlocking estimated annual interest savings of $20 million [35] Q&A Session Summary Question: Insights on DTC channel customer acquisition and retention - Management noted a deliberate strategy change in the DTC channel, focusing on using promotions strategically during key moments [47][48] Question: Changes in outlook due to macro trends - Management remains optimistic about the beauty category's resilience and reiterated guidance for the year [51][52] Question: Marketing initiatives and KPIs - Management highlighted early positive KPIs from the new marketing campaign, indicating a focus on emotional connections with consumers [59][60] Question: Specialty retail channel performance and inventory - Management confirmed healthy inventory levels and attributed specialty retail growth to strong retailer support and belief in the brand's future [65][66] Question: Promotional strategy across channels - Management clarified that the strategy to reduce promotional intensity applies across all channels, focusing on strategic use during critical moments [76][78] Question: Marketing spend cadence for the year - Management indicated that marketing spend would increase in the second quarter, with a focus on executing the brand strategy [101] Question: Tariff impacts and inventory planning - Management expects any tariff impacts to be modest and is proactively managing inventory to mitigate potential issues [36][41]