Mark Altschwager

Hartshorn said the raise is in line with the comp raise, driven by higher merchandise margins and lower DC costs.

Hartshorn confirmed no variation across income levels, with California performing in line with the chain. Added that macro uncertainty could drive more value-seeking customers to off-price.

Conroy said brand strategy is lapped and fully in place across the business. They are exploring opportunities to stretch into better price points with new brands while ensuring best bargains at entry prices.

Hartshorn said new store productivity improvement is broad-based, not just new markets. Brand strategy cuts across the whole store, not a sequential category rollout. Nearly every major category solidly positive with outerwear a bigger business than historically.

Hartshorn confirmed vendor cost concessions, closeout leverage, and normalized DC ticketing drove tariff mitigation. Comp driven by traffic, UPT, and AUR with transactions biggest. Hispanic stores improved to solid comps.

Conroy cited vendor negotiations, sourcing shifts, increased closeouts, and very little AUR increase. Hartshorn expects vendor pre-ticketing to normalize by Q4, removing DC processing costs.

Conroy explained the release of frozen China goods creates near-term closeout availability, though a production gap may follow. Store environment and marketing plans proceed at evolutionary pace.

Orvos said 2024 was the brand investment year and 2025 shifts to listen-and-learn mode. Conroy confirmed more closeout opportunities emerging from mainstream retailer softness.

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Guided 40-50 net new Coach doors (Todd: 75% international, 25% domestic, crossing 1,000 total); called Q4 marketing leverage partly timing with the flywheel intact.

Scott explained AUR as biggest driver, supply chain mitigating actions (most accelerating into next year), and tariff sell-through timing creating quarterly noise. Full-year gross margin guided positive despite 200bp tariff headwind. Confident in continued gross margin expansion into FY27 and beyond as mitigating actions compound and tariff impacts are lapped.

Todd described One Coach expanding from Tabby into sneakers and jewelry (spring). 70% of future growth from international with close to 100 stores in next 3 years (smaller formats). New store formats include food/beverage (Coach coffee shops). All stores expected to be profit centers from day one.

Todd explained global product consistency works because Gen Z is most homogeneous generation. Joanne confirmed no signs of anti-American sentiment in China business, growing with continued customer acquisition.

Joanne emphasized omnichannel capabilities as competitive advantage. Scott confirmed minimal China sourcing exposure for tariff risk.

Klinger confirmed current forecast reflects best thinking on a 2-3% back-nine comp, with additional margin expansion expected only if sales outperform that plan.

Herrman acknowledged UK fuel prices particularly elevated, creating a value opportunity as some consumers trade down from high street to off-price. Focus on retaining these new customers long-term.

John credited HomeGoods margin convergence to freight benefits favoring larger home products and strong top-line performance. Ernie added HomeGoods team constantly creating newness of vendors with super fast-turning business, improving merchandise margins and closing the operating income gap with Marmaxx.

John deflected on specific AUR details. Ernie emphasized the current environment as textbook for off-price with more merchandise availability from consumer confidence slowdown and store closures.

Kecia framed comp guide as thoughtful plan to maintain share gains while being fiscally responsible. Outperformed and raised throughout FY2025, building confidence. Time to reap rewards of multi-year investment cycle. Space NK performing well with growth in sales; views as additive to core business.

Kecia confirmed 60-65% flow-through on Target royalties. Confident Unleashed initiatives can replace lost income. Partnership exit doesn't change long-term financial targets.

Kecia cited split cart, BOPIS, shop-my-store, and app investments with 60%+ e-commerce from app. Paula noted deliberate focus on channel profitability through fulfillment options mitigates margin pressure.

Management expects category low-to-mid-single-digit growth, rational promo environment. Paula noted they will balance discounts with value messaging and targeted offers.

Asked to bridge Q4's implied lower margin pressure; Frank cited ~250bps of Q4 operating-margin pressure, moderating from Q3, aided by a higher revenue water line and tariff mitigation.

Frank said China tracked above guide pre-disruption, came in +30% (+23% cc) with 8 points from the New Year shift, and remains margin-accretive.

Meghan updated 2025 tariff impact to $190 million gross with $210 million net, improved from prior 220bps guidance. Declined to give specific 2026 update but noted progress in vendor negotiations and DC network optimization. More details in March.