The call begins with a reminder about forward-looking statements and discusses non-GAAP financial measures, followed by an introduction of the participants. The speaker emphasizes the risks associated with forward-looking statements and directs listeners to the company's press release and SEC filings for further details.

Despite facing unpredictable market conditions and the impact of tariffs on consumer sentiment, the company experienced a quarter within its forecast range. Consumers respond best to new, innovative products and promotions with high perceived value. The rapidly evolving tariff policy complicates planning and forecasting, necessitating significant realignment of the supply chain. Amidst these challenges, the company emphasizes its commitment to evoke happiness in customers through its portfolio of 'happy brands', focusing on optimistic brand positioning, products, and experiences. The approach, tested during the pandemic, ensures resilience and strength post-challenging times.

The focus on consumer happiness led to significant growth and profitability improvements for the Lily Pulitzer brand, marked by double-digit growth and positive comps in both e-commerce and retail. Key successes included a balanced selection of prints, popular sportswear items, the reintroduction of Lily Men's, and a successful collaboration with Saint James. Marketing efforts, including the Palm Beach fashion show, further enhanced brand excitement. Tommy Bahama expanded its presence with new Marlin Bar locations in Charlotte and King of Prussia, aiming to provide immersive brand experiences and expecting uplift in retail business.

The enterprise discusses its ongoing adaptation to rapidly changing US trade policies, particularly tariffs, emphasizing successful historical responses to policy shifts like NAFTA and China's WTO accession. It highlights progress in diversifying the supply chain away from China, managing tariff impacts on pricing and gross margins, and addressing profitability challenges in the Johnny Was business through strategic focus and external expertise. Additionally, the company updates on the development of a new fulfillment center in South Georgia, anticipating competitive advantages in key markets.

Despite facing significant uncertainties and challenges in the rapidly evolving tariff and trade environment, the company delivered sales and profits within previously issued guidance ranges. Consolidated net sales reached Lyr million, with e-commerce sales decreasing and wholesale channel sales increasing. Adjusted gross margin contracted due to increased freight expenses, markdowns, and changes in sales mix. Adjusted operating profit was 39 million, reflecting investments in a challenging consumer and macro environment. Inventory increased due to US tariff impacts, and cash flows from operations were driven primarily by lower net earnings and changes in working capital needs.

The company provides an updated outlook for the fiscal year 2025, noting a negative comp sales trend continuing into the second quarter, with expectations for a slight moderation in the second half. Net sales are projected to decline slightly compared to the previous fiscal year, with a total company comp sales decline in the low to mid single digit range. The guidance accounts for the impacts of tariffs, increased interest expenses, and a higher tax rate, leading to an adjusted EPS estimate between $2.80 and $3.20. Capital expenditures are expected to remain around $120 million for the year.

The company discusses ongoing capital expenditures for a distribution center in Lions, Georgia, and new store openings across various brands, expecting elevated spending to moderate post-project completion. Strong operational cash flows are anticipated to finance investments, quarterly dividends, and address outstanding borrowings, despite expecting to remain in debt due to share repurchases, dividend payments, and capital expenditures.

On June 12, 2025, participants are instructed to press star 100 to join the question queue during a conference; the first query comes from a representative of Key Bank Capital Markets.

The discussion highlights the importance of focusing on the most committed customers to sustain brand momentum, emphasizing the delivery of products consistent with brand DNA while remaining relevant. It also addresses the challenges of navigating margin headwinds and potential price increases to offset higher costs, including the impact of tariffs, across various brands.

The company discusses its plan for the spring season, aiming to increase earnings with less than a one percent rise in Aur, maintaining gross profit dollars despite a slight dip in initial margin. The team anticipates potential margin dilution due to promotional activities but notes it's too early to predict specifics for the upcoming year. Additional promotions are expected for the remainder of the current year, with modest price increases seen for the fall and full mitigation strategies for the next spring season.

The company reports 4% growth in wholesale, performing well against competitors on the floor of a major department store customer. Expectations for the second half of the year include a slight decline due to conservative spring order books, with specialty stores experiencing more significant challenges than department stores.

The discussion highlights the positive reception of new assortments at Lily, particularly in sportswear and prints, and notes increased customer interest during promotional periods at Tommy. It also addresses the challenges and strategies being implemented to address the mid-teens decline at Johnny, emphasizing cautious projections for the brand's performance in the upcoming quarters.

The company discusses the significant increase in tariff impacts on their operations, notably higher than previously discussed. They detail the gross impact considered and clarify the net effect, acknowledging the challenge of mitigating these effects during peak seasons. Plans for reducing reliance on China and major operational shifts for the upcoming seasons are outlined, aiming to alleviate the financial strain caused by tariffs.

April proved to be the strongest sales month, attributed partly to the Easter shift, with both retail and e-commerce experiencing gains. Despite overall business being down, the restaurant sector saw nearly flat comps, influenced by rising ticket sizes due to increased item prices. Notably, the Sarasota over restaurant's relocation caused a temporary absence during the busy season, impacting comparisons.

The business experienced a low point in February, showed improvement in March, and reached its best performance in April, as of June 12, 2025.

The conference concludes with expressions of gratitude, anticipation for the next meeting in September, and well-wishes for a pleasant summer to all participants.