Financial Data and Key Metrics Changes - Banco Macro's net income for Q2 2025 totaled ARS 101.1 billion, representing a 209% increase compared to the previous quarter, primarily driven by higher net interest income and net fee income [4][5] - Total comprehensive income for the quarter reached ARS 157.1 billion, a 241% increase from the previous quarter [5] - The annualized ROE and ROA were reported at 123.5% [5] - Provision for loan losses increased by 47% quarter on quarter and 349% year on year, totaling ARS 103 billion [6][14] Business Line Data and Key Metrics Changes - Net interest income for Q2 2025 was ARS 696.9 billion, a 14% increase from the previous quarter and a 163% increase year on year [6][7] - Income from interest on loans increased by 19% quarter on quarter and 30% year on year, representing 69% of total interest income [8] - Net fee income totaled ARS 108.4 billion, a 16% increase from the previous quarter and a 34% increase year on year, with credit card fees increasing by 90% [11][12] Market Data and Key Metrics Changes - Banco Macro's market share in private sector loans reached 9.2% as of June 2025 [15] - Total deposits increased by 4% quarter on quarter and 13% year on year, with private sector deposits also increasing by 4% quarter on quarter [16][17] - The nonperforming loans (NPL) ratio reached 2.06%, with consumer portfolio NPLs deteriorating to 2.81% [17][18] Company Strategy and Development Direction - The bank aims to maintain a loan growth guidance of 60% for 2025 and a deposit growth guidance of 30% [38][39] - Banco Macro is focused on optimizing its deposit base and improving efficiency standards while managing asset quality [18][19] - The bank is open to analyzing potential M&A opportunities if favorable conditions arise [51] Management's Comments on Operating Environment and Future Outlook - Management noted an increase in funding costs and anticipated some reduction in net interest margins (NIMs) in Q3 due to market volatility [24][26] - The bank expects NPLs to increase to between 2.5% to 3% of total loans by the end of the year due to high real interest rates [26][33] - The effective income tax rate was reported at 39%, lower than the previous year [14] Other Important Information - Banco Macro's capital adequacy ratio was reported at 30.5%, with a Tier one ratio of 9% [18] - The bank's liquidity remains strong, with a liquid assets to total deposit ratio of 67% [18] Q&A Session Summary Question: Impact on NIMs and asset quality from interest rate volatility - Management acknowledged higher volatility and increased funding costs, forecasting a slight reduction in NIMs for Q3 [24][26] Question: ROE expectations for the second half of the year - Management maintained an ROE guidance of 8% to 10% for 2025 [26] Question: Cost of risk expectations - Management estimated a cost of risk similar to the previous year, around 4% [27] Question: Tier one ratio forecast - Management forecasted a Tier one ratio of approximately 28.75% by the end of 2025 [30] Question: Quality of the retail loan portfolio - Management noted some deterioration in asset quality due to rising interest rates, expecting continued deterioration in the third quarter [32][33] Question: Funding growth strategy - Management emphasized the importance of maintaining growth in both peso and dollar deposits while managing funding costs [36][38] Question: Loan growth guidance - Management confirmed a loan growth guidance of 60% for 2025 and a deposit growth guidance of 30% [39][40]

Financial Data and Key Metrics Changes - Banco Macro's net income for Q2 2025 totaled ARS 101.1 billion, representing a 209% increase compared to the previous quarter, primarily driven by higher net interest income and net fee income [4][5] - Total comprehensive income for the quarter reached ARS 157.1 billion, a 241% increase from the previous quarter [5] - The annualized ROE and ROA were reported at 123.5% [5] - Provision for loan losses increased by 47% quarter-on-quarter and 349% year-on-year, totaling ARS 103 billion [6] - Net interest income for Q2 2025 was ARS 696.9 billion, a 14% increase from the previous quarter and a 163% increase year-on-year [6][7] Business Line Data and Key Metrics Changes - Income from interest on loans increased by 19% quarter-on-quarter and 30% year-on-year, totaling ARS 746.1 billion [7] - Income from government and private securities rose by 18% quarter-on-quarter and 54% year-on-year [7][8] - Net fee income for Q2 2025 was ARS 108.4 billion, a 16% increase from the previous quarter and a 34% increase year-on-year [11] - Other operating income decreased by 37% quarter-on-quarter and 24% year-on-year, totaling ARS 45.8 billion [12] Market Data and Key Metrics Changes - Banco Macro's market share in private sector loans reached 9.2% as of June 2025 [16] - Total deposits increased by 4% quarter-on-quarter and 13% year-on-year, totaling ARS 62 trillion [17] - Nonperforming loans to total financial ratio was reported at 2.06% [18] - The current ratio of total allowances under expected credit losses over nonperforming loans was 137% [18] Company Strategy and Development Direction - The company aims to maintain a loan growth guidance of 60% for 2025 and a deposit growth guidance of 30% [40][41] - Banco Macro is focused on optimizing its deposit base and improving efficiency standards while managing asset quality [19][20] - The bank is open to M&A opportunities but currently has no specific targets [53] Management's Comments on Operating Environment and Future Outlook - Management noted an increase in funding costs and anticipated a slight reduction in net interest margins for Q3 2025 due to market volatility [24][26] - The bank expects some deterioration in asset quality, projecting nonperforming loans to rise to between 2.5% to 3% of total loans by year-end [28][35] - The effective income tax rate was reported at 39%, lower than the previous year [14] Other Important Information - Banco Macro's capital adequacy ratio was reported at 30.5%, with an excess capital of ARS 3.13 trillion [19] - The liquidity ratio of liquid assets to total deposits was 67% [19] Q&A Session Summary Question: Impact on NIMs and asset quality from interest rate volatility - Management acknowledged higher volatility and increased funding costs but noted that net interest margins had widened in Q2 2025. They expect a slight reduction in NIMs for Q3 due to these factors [24][26] Question: ROE expectations for the second half of 2025 - Management maintained the ROE guidance range of 8% to 10% for 2025, despite macroeconomic challenges [28] Question: Quality of the retail loan portfolio - Management indicated a general deterioration in asset quality across the system, with expectations of continued increases in delinquency rates [35] Question: Funding strategy and loan growth guidance - Management emphasized the importance of maintaining growth in both peso and dollar deposits, with a loan growth guidance of 60% for 2025 [40][41] Question: Inflation adjustment item in the P&L - Management confirmed that the inflation adjustment item is due to inflation accounting [55] Question: Expected loan growth for 2025 and 2026 - Management projected a 60% loan growth for 2025 and a 45% growth for 2026 [56]

Financial Data and Key Metrics Changes - The company reported a consolidated sales increase of 5% to $3.65 billion for Q2 2025, with comparable sales (comps) also increasing by 5% [16][11] - Gross profit for Q2 was $1.35 billion, representing 37.06% of net sales, with an increase of 33 basis points from the previous year [17] - Non-GAAP earnings per diluted share were $4.38, slightly up from $4.37 in the previous year [19] Business Line Data and Key Metrics Changes - The company is focusing on three growth areas: repositioning real estate and store portfolio, driving growth in key categories, and expanding its e-commerce business [12][13] - The company opened one additional House of Sport location in Q2 and plans to open 13 more in Q3, aiming for a total of approximately 35 by year-end [12] - E-commerce continues to grow faster than the overall company, driven by a strong product pipeline and app engagement [13] Market Data and Key Metrics Changes - The company is gaining market share from online-only and omni-channel retailers, with a two-year comp stack of 9.5% and a three-year comp stack of 11.5% [16] - The company expects full-year comp sales growth in the range of 2% to 3.5%, up from a prior expectation of 1% to 3% [21] Company Strategy and Development Direction - The company is enthusiastic about the strategic benefits of the pending acquisition of Foot Locker, which is expected to close on September 8 [8] - The acquisition aims to create a global leader in the sports retail industry, enhancing partnerships with leading sports brands and expanding the total addressable market [8] - The company is committed to investing in stores and marketing to revitalize the Foot Locker business post-acquisition [31] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's long-term strategies and the strength of its operating model, despite a complex macroeconomic environment [10][21] - The company is navigating the tariff environment effectively, with minimal impact on Q2 and a cautious outlook for the back half of the year [36][109] - Management raised full-year guidance based on strong Q2 performance and ongoing confidence in business execution [10][21] Other Important Information - The company ended Q2 with approximately $1.2 billion in cash and cash equivalents, with no borrowings on its $2 billion unsecured credit facility [19] - The company plans to invest approximately $1 billion in net capital expenditures for the full year [23] Q&A Session Summary Question: Update on Foot Locker acquisition and revitalization plans - Management sees a tremendous opportunity with Foot Locker and plans to invest in stores and marketing to turn the business around [30][31] Question: Impact of tariffs on demand and pricing - Management reported strong performance despite sporadic price increases and is confident in navigating the tariff environment [36] Question: Consumer behavior and category performance - Management noted broad-based growth across key segments, with no signs of consumer slowdown [40][41] Question: Gross margin expectations - Management expects gross margin to expand, balancing various factors including tariffs and strategic investments [68] Question: Accretion from Foot Locker deal - Management remains confident that the acquisition will be accretive, with ongoing evaluations post-transaction [72][87] Question: Game Changer performance - Game Changer continues to perform well, with significant user growth and integration with DICK'S Media Network [78] Question: Athletic footwear pricing and consumer absorption - Management indicated that selective price increases have not negatively impacted consumer demand [107] Question: Traffic dynamics between store formats - Management expressed enthusiasm for the performance of House of Sport and Fieldhouse stores, focusing on overall performance rather than traffic alone [115]

Financial Data and Key Metrics Changes - The company reported total revenue of $301.2 million for fiscal year 2025, a 6.1% increase from $283.9 million in the previous year [18] - Adjusted EBITDA for the year was $88.7 million, up from $83.4 million, reflecting a positive trend in profitability [18] - Same store sales declined by 4.1%, but showed sequential improvement each month in the fourth quarter [18] Business Line Data and Key Metrics Changes - The retail business remained steady, while league operations experienced low single-digit growth, and the events business faced a high single-digit decline [18] - The acquisition of Boomers and two new water parks contributed an additional $7 million in EBITDA [19] - Food and beverage revenue showed positive same store comps, with food revenue up 2.5% and alcohol comps down 2.7%, indicating a shift in consumer preferences [12][19] Market Data and Key Metrics Changes - California, which accounts for approximately 20% of total sales, contributed $6 million to the same store sales decline [19] - New York is showing positive trends, with marketing efforts yielding favorable results [56] Company Strategy and Development Direction - The company is focused on building a premier location-based entertainment platform in North America, with significant investments in water parks and family entertainment centers [9] - The strategy includes enhancing guest experiences, expanding operating cash flow, and increasing free cash flow [21] - The company aims to reach 100 Lucky Strike locations by year-end, up from 55 [17] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the recovery of the business, particularly in July, which saw double-digit growth year-over-year [6][21] - The company anticipates total revenue growth of 5% to 9% for fiscal year 2026, translating to $1.26 billion to $1.31 billion in revenue [21] - Management highlighted the importance of marketing investments to capture additional market share and improve brand awareness [47] Other Important Information - The company acquired 58 properties for $36 million, which will enhance its operational flexibility and is expected to be accretive to earnings [9][20] - The liquidity position remains strong at $342 million, with $60 million in cash [22] Q&A Session Summary Question: Can you walk us through the assumptions embedded in the new targets for 2026? - Management indicated that July's positive performance and increased marketing investments are key components of the guidance [25] Question: How do you see the cadence playing out between the quarters in 2026? - Management expects good double-digit growth in September, with the fourth quarter projected to be $10 million to $20 million higher than the second quarter [29] Question: What is the outlook for the events side of the business? - Management noted that the comp gets easier starting in September, and they are focusing on increasing marketing spend to capture market share [33] Question: How are you approaching the water parks and family entertainment centers compared to bowling? - The same operational playbook is applied, focusing on improving asset quality and enhancing food and beverage offerings [36] Question: What is the expected trajectory for location operating costs? - Management indicated that location operating costs are expected to return to historical trends after accounting for non-cash charges [65] Question: Can you provide insights on the impact of marketing investments on recent performance? - Management noted that increased marketing spend has driven significant results, particularly in the successful summer season pass program [46] Question: What is the expected annualized cost to operate Boomers? - Boomers is currently running close to a 25% EBITDA margin, with revenue expectations to increase over the next twelve months [80] Question: What is the non-acquisition CapEx guidance for FY 2026? - Non-acquisition CapEx is expected to be around $130 million, down from previous levels as the company focuses on high ROI initiatives [82]

Financial Data and Key Metrics Changes - The fixed service revenue declined by 6.2% year over year, with 3% attributed to lower connection revenue, equating to approximately €20 million decline in the quarter [13][15] - EBITDA decrease is primarily due to a direct impact from revenue decline, with close to 100% of the €100 million decline being a direct drop from service revenue [10] Business Line Data and Key Metrics Changes - The B2C mobile market saw a competitive environment with aggressive pricing, where offers for 30 GB were priced at €5 in May, now reduced to 20 GB for €7 [6][7] - The B2B segment experienced a revenue decline of 2%, with high competition and many small players entering the market [8][9] Market Data and Key Metrics Changes - The volume of net adds in the French market was low compared to previous years, with Q2 net adds comparable to last year, totaling around 80,000 for all players [6][21] - The market share of the incumbent remains high, indicating potential growth opportunities despite declining prices [9] Company Strategy and Development Direction - The company is focusing on reducing CapEx, which has declined by 24% this year, driven by lower network investment and a decrease in collection fees as FTTH is rolled out [20][22] - The company is well advanced in 5G rollout, covering approximately 85% of the population, and has 41 million home passes for FTTH [22][24] Management Comments on Operating Environment and Future Outlook - Management noted that the competitive environment has softened slightly in July and August after a peak in May, indicating a potential stabilization in pricing [6][7] - The company believes that the direction of CapEx reduction is sustainable due to lower data consumption growth expectations and reduced network investment needs [24] Other Important Information - The expected gross proceeds from the tower transaction are €480 million, with net proceeds estimated around €460 million after costs [14][18] Q&A Session Summary Question: Competitive environment in France - Management acknowledged high competition in the mobile market, particularly on the budget end, and noted that the market has softened slightly in recent months [6][8] Question: Barriers to growth in B2B business - Management indicated that the B2B market is competitive with declining prices and many small players, impacting growth [8] Question: Fixed service revenue decline details - Management confirmed a 6.2% decline in fixed service revenue, with connection fees being a significant driver [15] Question: Net proceeds from tower transaction - Management clarified that net proceeds from the tower transaction would be around €460 million [18] Question: Impact of mobile network outage on net adds - Management stated that net adds in Q2 were comparable to last year, with improvements noted in the competitive landscape [21] Question: Sustainability of CapEx reduction - Management explained that the CapEx reduction is driven by lower network investment needs and a decrease in collection fees, indicating sustainability [24]

Financial Data and Key Metrics Changes - The company reported total revenue of $301.2 million for fiscal year 2025, a 6.1% increase from $283.9 million in the previous year [19] - Adjusted EBITDA for the year was $88.7 million, up from $83.4 million, reflecting a positive trend in profitability [19] - Same store sales declined by 4.1%, but showed sequential improvement each month in the fourth quarter [19] Business Line Data and Key Metrics Changes - The retail business remained steady, while league operations experienced low single-digit growth and the events business faced a high single-digit decline [19] - The acquisition of Boomers and two new water parks contributed an additional $7 million in EBITDA [19] - Food revenue showed positive same store comps of 2.5%, while alcohol comps were down 2.7% but improving [12][19] Market Data and Key Metrics Changes - California, which accounts for approximately 20% of total sales, contributed $6 million to the same store sales decline [20] - New York is performing well, with positive comps attributed to increased marketing efforts [56] Company Strategy and Development Direction - The company is focused on building a premier location-based entertainment platform in North America, with significant investments in water parks and family entertainment centers [8][10] - The strategy includes enhancing guest experiences and expanding market leadership through acquisitions and organic growth [10] - The company aims to reach 100 Lucky Strike locations by year-end, up from 55 [17] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the positive momentum heading into fiscal year 2026, driven by strong July performance and the successful season pass program [6][22] - The company anticipates total revenue growth of 5% to 9% for fiscal year 2026, translating to $1.26 billion to $1.31 billion in revenue [22] - Management highlighted the importance of marketing investments to capture additional market share and improve brand awareness [47] Other Important Information - The company acquired 58 properties for $36 million, which will lower GAAP rent expense and capitalized lease expense in fiscal year 2026 [21][22] - The liquidity position remains strong at $342 million, with $60 million in cash [23] Q&A Session Summary Question: Can you walk us through the assumptions embedded in the new targets for 2026 EBITDA guidance? - Management noted that July showed positive growth, and the guidance reflects increased marketing investments and the expected positive impact from newly acquired assets [26][27] Question: How do you see the cadence playing out between the quarters in fiscal 2026? - Management expects double-digit growth in September, with the fourth quarter projected to be $10 million to $20 million higher than the second quarter [30] Question: What is the outlook for the events side of the business? - Management indicated that the comp gets easier starting in September, and they are focusing on increasing marketing spend to capture market share [34] Question: How are you approaching the business of water parks and family entertainment centers compared to bowling? - The same playbook is applied, focusing on improving asset quality and enhancing food and beverage offerings [36] Question: What is the expected trajectory for location operating costs? - Management indicated that location operating costs are expected to return to historical trends after accounting for non-cash charges [66] Question: Can you provide insights on the impact of marketing investments on recent performance? - Management highlighted that increased marketing spend has driven significant results, particularly in the successful season pass program [46] Question: What is the expected annualized cost to operate Boomers? - Boomers is currently running close to a 25% EBITDA margin, with expectations for revenue growth in the next twelve months [84] Question: What is the non-acquisition CapEx guidance for FY 2026? - Non-acquisition CapEx is expected to be around $130 million, down from the previous year as the company focuses on high ROI initiatives [85]

Financial Data and Key Metrics Changes - The company reported a consolidated sales increase of 5% to $3.65 billion for Q2 2025, with comparable sales (comps) also increasing by 5% [16][11] - Gross profit for Q2 was $1.35 billion, representing 37.06% of net sales, an increase of 33 basis points from the previous year [17] - Non-GAAP earnings per diluted share were $4.38, slightly up from $4.37 in the previous year [19] - The company ended Q2 with approximately $1.2 billion in cash and cash equivalents, with no borrowings on its $2 billion unsecured credit facility [19] Business Line Data and Key Metrics Changes - The company opened one additional House of Sport location in Q2 and plans to open 13 more in Q3, marking the highest number of openings in a single quarter [12] - The e-commerce business continues to grow faster than the overall company, driven by a strong product pipeline and app engagement [13][14] Market Data and Key Metrics Changes - The company continues to gain market share from online-only and omni-channel retailers, with a two-year comp stack of 9.5% and a three-year comp stack of 11.5% [16] - The average ticket increased by 4.1%, while transactions rose by 0.9% in Q2 [16] Company Strategy and Development Direction - The company is focused on four strategic pillars: differentiated product assortment, omni-channel athlete experience, teammate experience, and deep engagement with the Dick's brand [10] - The pending acquisition of Foot Locker is expected to create a global leader in the sports retail industry, enhancing partnerships with leading sports brands and expanding the total addressable market [7][10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the business's resilience and the effectiveness of long-term strategies, raising full-year comp sales growth expectations to 2% to 3.5% [21] - The company is navigating a complex macroeconomic environment, including tariff impacts, while maintaining strong consumer demand and sales momentum [38][21] Other Important Information - The company anticipates closing the Foot Locker acquisition on September 8, 2025, and is enthusiastic about the strategic benefits it will bring [7] - The company is investing in digital and in-store initiatives to position itself for long-term growth, with a focus on enhancing the athlete experience [18][21] Q&A Session Summary Question: Update on Foot Locker acquisition and revitalization plans - Management sees a tremendous opportunity with Foot Locker and plans to invest in stores and marketing to turn the business around, with more details expected in the Q3 call [34][33] Question: Impact of tariffs on demand and pricing - Management reported strong performance despite tariff impacts, with surgical price increases and no significant demand slowdown observed [38][36] Question: Consumer behavior and category performance - Management noted broad-based growth across all key segments, with no signs of consumer slowdown, and highlighted the importance of innovation in driving sales [41][42] Question: Gross margin expectations - Management expects gross margin to expand for the full year, driven by product assortment quality and strategic investments, despite balancing various economic factors [73][72] Question: Game Changer performance - Game Changer continues to perform well with 7.4 million unique active users in Q2, and the integration with Dick's Media Network is enhancing personalization and engagement [80][81] Question: Private brands and tariff impacts - Management did not provide specific details on private brand performance but acknowledged ongoing discussions with brand partners regarding pricing strategies in light of tariffs [122]

Financial Data and Key Metrics Changes - For Q2 2025, total revenue was €2.29 billion, a decline of 9.1% year over year on a reported basis [3] - Q2 EBITDA was €801 million, and operating free cash flow was €423 million [3] - EBITDA decreased by 10.8% in the second quarter, primarily due to a decline in residential revenue [14] - CapEx expenditure for the quarter totaled €378 million, reflecting a notable reduction compared to Q2 2024 [14] - Free cash flow for Q2 2025 amounted to an outflow of €137 million [16] Business Line Data and Key Metrics Changes - Residential service revenue declined by 9.1% year over year, with fixed residential service revenue down 6.2% [12] - Mobile residential service revenue declined by 11.3%, impacted by customer base erosion and competitive pricing pressure [13] - Business Services, excluding construction, declined by 2%, with the majority of the decline driven by construction [13] - Total net losses in fixed services were minimal in 2025 compared to 2024, indicating improved commercial trends [9] Market Data and Key Metrics Changes - The competitive environment in France remains intense, particularly in the budget mobile segment, with aggressive pricing from competitors [35] - The volume of net adds in the French market was low compared to previous years, with a total of approximately 80,000 net adds across all players [48] Company Strategy and Development Direction - The company aims to reduce leverage to four times and has entered into agreements with creditors to extend debt maturities and reduce interest expenses [20] - The focus remains on CapEx discipline, particularly in areas like FTTH and 5G, where prior investment levels will not need to be sustained [14] - The company is actively reviewing its portfolio for potential transactions that make strategic sense [30] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to improve trends in the coming quarters despite current revenue declines [9] - The restructuring plan aims to reduce the absolute debt of Altice France without impacting operations or employees [28] - Management believes the current political situation in France does not impact business operations or transaction capabilities [30] Other Important Information - The company has started implementing a safeguard plan and expects to close the process by early October 2025 [4] - A technical incident in June affected mobile network service, but the issue was resolved quickly, and impacted customers were compensated with additional mobile data [10][11] Q&A Session Summary Question: Guidance for full year operating cash flow - Management confirmed guidance for growth in EBITDA minus CapEx for 2025, primarily driven by CapEx reduction [25][26] Question: Update on safeguard process and appeals - One appeal has been made by employee representatives, but management remains confident in the October timeline for restructuring [27][28] Question: Competitive environment in mobile and B2B business - The competitive environment remains intense, with pricing pressures affecting both mobile and B2B segments [35][36] Question: Fixed service revenue decline and connection revenue base - Fixed service revenue declined by 6.2% year over year, with connection fees contributing to the decline [42] Question: Net proceeds from the tower transaction - Expected net proceeds from the tower transaction are around €460 million [45] Question: Trends in net adds and churn issues - Management noted that net adds in Q2 were comparable to last year, with improvements in customer retention [48] Question: Sustainability of CapEx reduction - Management indicated that the reduction in CapEx is sustainable due to lower network investment needs and changing data consumption patterns [50][51]

Financial Data and Key Metrics Changes - The company reported a consolidated sales increase of 5% to $3.65 billion for Q2 2025, with comparable store sales (comps) also increasing by 5% [16][11] - Gross profit for Q2 was $1.35 billion, representing 37.06% of net sales, an increase of 33 basis points from the previous year [17] - Non-GAAP earnings per diluted share were $4.38, slightly up from $4.37 in the previous year [19] - The company raised its full-year comp sales growth expectation to a range of 2% to 3.5%, up from a prior expectation of 1% to 3% [21] Business Line Data and Key Metrics Changes - The company opened one additional House of Sport location in Q2 and plans to open 13 more in Q3, marking the highest number of openings in a single quarter [12] - The e-commerce business continues to grow faster than the overall company, driven by a strong product pipeline and app engagement [13][14] Market Data and Key Metrics Changes - The company continues to gain market share from online-only and omni-channel retailers, with a two-year comp stack of 9.5% and a three-year comp stack of 11.5% [16] - There was broad-based strength across key categories, including footwear, apparel, team sports, and golf, with no signs of consumer slowdown [39] Company Strategy and Development Direction - The company is focused on strategic investments in digital, in-store, and marketing to position itself for long-term growth [21] - The pending acquisition of Foot Locker is expected to create a global leader in the sports retail industry, enhancing partnerships with leading sports brands and expanding the total addressable market [7][10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating the complex macroeconomic environment, including tariff impacts, while maintaining strong sales momentum [36][21] - The company is optimistic about the future growth potential of both DICK'S and Golf Galaxy businesses, as well as the opportunities presented by the Foot Locker acquisition [14] Other Important Information - The company ended Q2 with approximately $1.2 billion in cash and cash equivalents, with no borrowings on its $2 billion unsecured credit facility [19] - The company expects to incur preopening expenses in the range of $65 million to $75 million for the full year, primarily in Q3 [22] Q&A Session Summary Question: Update on Foot Locker acquisition and revitalization plans - Management sees a tremendous opportunity with Foot Locker and plans to invest in stores and marketing to revitalize the business [32][33] Question: Impact of tariffs on demand and pricing - Management reported strong performance despite sporadic price increases, indicating that consumers are responding well [36] Question: Consumer behavior and potential slowdown - Management noted no signs of consumer slowdown, with growth across all key segments [39] Question: Gross margin expectations - Management expects gross margin to expand for the full year, balancing various factors including tariffs and strategic investments [70][71] Question: Game Changer performance - Game Changer continues to perform well with 7.4 million unique active users in Q2, indicating strong growth [78] Question: Private brands performance and tariff impacts - Management did not provide specific details on private brands but acknowledged the impact of tariffs on cost of goods sold [122]

Financial Data and Key Metrics Changes - Sales increased by 3% to $161.8 million compared to $157 million last year, with adjusted operating profit more than doubling to $7 million from $2.6 million despite a $2.2 million impact from U.S. tariff expenses [5][17] - Gross profit margin was 54.1% compared to 54.3% in the same quarter last year, primarily affected by increased tariffs and unfavorable foreign exchange [18][19] - Net income for the quarter was $5.3 million or $0.23 per diluted share, up from $3.5 million or $0.15 per diluted share in the prior year [20] Business Line Data and Key Metrics Changes - The company's owned brands experienced a 5.6% sales decline, while licensed brands grew by 6.5% on a constant currency basis or 9.5% on a reported basis [7][12] - The Movado brand saw a return to growth in wholesale distribution, with a 6% growth in its own e-commerce site [10] - The outlet stores segment grew by 2.4% for the quarter, indicating positive trends in that channel [9] Market Data and Key Metrics Changes - U.S. net sales declined by 1.6%, while international net sales increased by 6.9% or 3.9% on a constant currency basis, with strong performances in Europe, Latin America, and India [8][18] - The Middle East market is currently being rebuilt, which has impacted overall performance [8] Company Strategy and Development Direction - The company is focused on returning to growth and profitability, expecting approximately $10 million in annualized savings from actions taken to reduce operating expenses [6][7] - New product launches and marketing campaigns are planned for the second half of the year, targeting both women's and men's watch categories [11][14] - The company is closely monitoring the tariff situation and developing mitigation plans while maintaining a strong balance sheet with over $180 million in cash and no debt [6][25] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the resurgence in the fashion watch market and the potential for growth in the mini and micro watch categories, particularly among younger consumers [27][28] - The company is not providing a fiscal 2026 outlook due to ongoing uncertainties around tariffs and the broader retail environment [25] Other Important Information - The company has built a strong inventory position of Swiss-made watches in the U.S. to mitigate tariff impacts [6][24] - Capital expenditures for the first six months were $2.8 million, and approximately 100,000 shares were repurchased under the share repurchase program [24] Q&A Session Summary Question: Insights on consumer habits regarding mini watches - Management noted a trend of smaller watches gaining popularity again, particularly among young women, driven by social media and layering with jewelry [27][28] Question: Performance during Prime Day - The company observed strong performance in its digital business during Prime Day, particularly in Europe, indicating a positive trend across its brand portfolio [29] Question: Inventory increase due to tariffs - Management explained that inventory was rebuilt after being low at year-end, with expectations to align inventory levels by year-end while managing tariff impacts [30][33] Question: Future of restructuring charges - Management indicated that restructuring charges are predominantly done, with expectations for a significant reduction in future expenses [36]