Q1 2024 Amer Sports Inc Earnings Call

All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer session.

Speaker Change: Like to ask questions. During this time simply press star followed by the number one on your telephone keypad.

Speaker Change: If you would like to withdraw your question Press Star one again.

Speaker Change: Now I'd like to turn the conference over to Omar Saad VP of Finance and Investor Relations you may begin.

Omar Saad: Hello, everyone and thanks for joining AMR sports first quarter 2024 earnings call earlier. This morning, we announced our financial results for the first quarter of fiscal year 2024. The release can be found on our IR web site investors <unk> Dot com.

Omar Saad: A quick reminder to everyone that today's call will contain certain forward looking statements within the meaning of the federal securities laws.

Omar Saad: These forward looking statements reflect our current expectations and beliefs only.

Omar Saad: Subject to certain risks and uncertainties that could cause actual results to differ materially. Please.

Omar Saad: Please see the safe Harbor statement in our earnings release and SEC filings.

Omar Saad: We will also discuss certain non <unk> financial measures.

Speaker Change: Please refer to our earnings release for important information regarding such non <unk> financial measures, including reconciliations to the most comparable <unk> financial measures.

Speaker Change: We will begin with prepared remarks from our CEO, James Deng and CFO, Andrew page, followed by a Q&A session until approximately nine a M eastern arc.

Speaker Change: <unk> CEO Stuart Hazelton will also joined for the Q&A portion of the call.

Speaker Change: With that I'll turn the call over to James.

James Deng: Thanks, a lot the momentum behind our strong financial performance has continued through the first quarter of 2024.

Speaker Change: We delivered sales and the margin above our guidance.

Speaker Change: Our transformation to a Brent direct finished model four years ago continues to fewer amer sports profitable growth to date and it will for years to come.

Speaker Change: Our high performance technical products are resonating with consumers globally, and we are gaining share in the premium sports and outdoor market.

Speaker Change: Consumers are engaged in our end markets are healthy, giving us confidence that our unique portfolio of brand is well positioned to deliver another great year in 2024.

Speaker Change: In the first quarter, we generated 12, 6% growth of 14, 2% excluding currency impacts.

Speaker Change: And we achieved an 11% adjusted operating margin above our expectations.

We continue to enjoy strong gross margin expansion, which reflects the strong pricing power of our brands as well as the ongoing mix shift cohort our high margin franchise, a category, which.

Speaker Change: Which continues to January best in class financial performance.

And as Andrew will describe we have significantly improved our balance sheet.

Speaker Change: Five key factors.

Andrew Page: Give me confidence for 2024 and beyond.

First.

We own and operate.

Andrew Page: And a valuable portfolio of premium outdoor and sports brands.

Speaker Change: Each one is fueled by technical innovation and are positioned at the pinnacle of the respective segment.

Speaker Change: Our brands have high engagement conversion and dissatisfaction with consumers everywhere, but are still relatively small players on a global stage with significant room to grow.

Speaker Change: Second our tariff is a breakout growth story with unprecedented growth and profitability for the outdoor industry.

Speaker Change: Nothing new territory with disruptive DTC model and a strong competitive position.

Speaker Change: Fueled by our Keryx Amer sports highest margin channels regions and the categories are growing the pocket.

Speaker Change: Sure.

Speaker Change: Panama Wilson and all of our other brands are also healthy.

Speaker Change: They have longstanding authentic heritage premium position high performance products and the leading market share.

Speaker Change: Although they are earlier, India closed infraction, we are building very strong foundation for future growth for these brands across categories and geographies.

Speaker Change: Fourth we believe our deep expertise and a unique scalable operating platform in great China gives us a significant competitive advantage across the brands in our portfolio in this large and important consumer market.

Speaker Change: Last but not least is T. A great journey begins with our great team.

Speaker Change: And we have assembled.

Speaker Change: <unk> management team with a great track record that is energized and motivated to drive value creation for our stakeholders.

Speaker Change: Okay.

Speaker Change: Now, let's review the performance of our brands segment first.

Speaker Change: First technical apparel led.

Keryx: Led by our Keryx technical apparel revenues grow 44% to $510 million in Q1.

Keryx: Excluding FX technical apparel sales increased 48%.

Speaker Change: The segment that was fueled by 46% DTC growth, including a 36% omnicom against a difficult plus 61% comp comparison from last year in the first quarter.

Speaker Change: Technical apparel growth in our direct channel was fueled by both new and existing consumers.

Speaker Change: And are both strong traffic and conversion trends in stores and online.

Speaker Change: As a reminder.

Speaker Change: I'm gonna come in carpet growth from both <unk> retail stores and E. Commerce sites that have been opened at least 13 months.

Speaker Change: The Terex brand continues to experience broad based strength and is over delivering across every region channel and category.

Speaker Change: DTC remains a core growth engine, but we also experienced strength in the wholesale channel, which grew 40% for the segment.

Speaker Change: Wholesale growth was driven by existing accounts and adults not expansion into new accounts or new doors.

Speaker Change: Wholesale performance was boosted by strong Reorders and a continued improvement in on time delivery and the inventory availability.

Speaker Change: Please note that we don't expect technical apparel wholesale to continue growing at this rate in Q2 or for the remainder of the year.

Speaker Change: Originary technic apparel growth pockets in Asia Pacific led by Japan, followed by the Americas and China.

Speaker Change: In Japan stores will also lapping very low inventory levels from last year.

Speaker Change: EMEA growth was driven by a tariff offset with a decline at peak performance, which faced a difficult growth comparison due to promotional activities in the prior year period.

Speaker Change: Importantly, <unk>.

Speaker Change: <unk> continues to generate outside the close in key opportunity areas, including footwear and hardgoods and accessories.

Speaker Change: Oh tariffs did a great job executing its commercial expansion strategy in Q1 with several brand development I would like to highlight.

Speaker Change: This was the first full quarter for our new Shanghai flagship, which we call <unk>.

Speaker Change: Full story one of our clients.

Speaker Change: Experiential store eating well locked square represents the pinnacle expression of the <unk> brand at retail.

Speaker Change: And has created incredible but for us in the market with.

Speaker Change: We expect this store to January sales, well over $20 million in its first year.

Speaker Change: Globally, we execute well our retail expansion plans.

Speaker Change: <unk> nine new carrier locations in total in Q1.

Speaker Change: Including Pasadena, 19, China, Cologuard in London, and in Paris, a shop in shop in summary, key Department store.

Speaker Change: Second our carriage launched its first footwear line that was designed developed and sourced by the <unk> team in Portland, Oregon.

Tariff: Tariff start its footwear journey several years ago, leveraging <unk> existing platform and three years ago, our carriers begin building in house footwear capability.

October XP: This launch represent our first model designed by the October XP.

Speaker Change: We are very pleased with the market reception to what we believe is the best line of technical performance footwear designed for the mountain entity.

Speaker Change: Since the launch the penetration of footwear to a current total revenue has jumped from 6% to 10%.

Speaker Change: The crack has emerged as our breakout style.

Speaker Change: Based on the enthusiastic response from consumers and the key wholesale comp we are gaining early confidence that footwear can become a meaningful profitable growth Avenue for the brand.

Speaker Change: Lastly, I'd like to adjust upcoming 2025 change in regulation bands.

Speaker Change: For ever chemicals.

Speaker Change: These new regulations are not expect to have an adverse impact on our business.

Speaker Change: We have been at the forefront of the industry developing alternative workflow materials with our key partners for a number of years.

Speaker Change: And the early reads from the consumers are very encouraging.

Speaker Change: The Rx team has already started selling the new paper comprised of materials in our most popular model with no negative impact on sales trends.

Speaker Change: The consumer is reacting to any difference in the look feel or performance of the new materials.

Across the rest of the portfolio our other brands have much lower exposure and are already worked.

Speaker Change: That's the transition to <unk> III inventory by next year.

Speaker Change: Turning to the outdoor performance segment.

Speaker Change: Revenue increased 6% to $400 million U S dollars above our guidance of flat sales.

Speaker Change: Excluding FX outdoor performance sales increased 6%.

Speaker Change: Upside was driven by strong top line performance in settlement DTC and the soft goods, particularly footwear in Asia Pacific and greater China.

Speaker Change: This strength.

Speaker Change: It was partially offset by softness in our winter sports equipment, and franchisees, which were negatively impacted by warm weather late in the ski season, 2022 delivery shifts and the elevated inventory levels in the market.

Speaker Change: Although winter sports equipment sales declined in Q1, when we look at the performance of that paid over the entire winter ski season, which start with wholesale shipments in the third quarter, our portfolio of brands had a strong season overall and a top market share.

Speaker Change: The industry is healthy with solid annual bookings and the traffic in the Big scheme epicentre in Europe and Americas.

Speaker Change: In the DTC channel outperformance grew 42% in Q1, driven by strong results in both e-commerce and the stores fueled by increased traffic and conversion.

Speaker Change: Wholesale declined 3% and was negatively impacted by challenging trends in the outdoor sporting goods channels in the Americas.

Speaker Change: Regionally, China more than doubled.

Speaker Change: Asia Pacific low double digits, driven by an over achievement in footwear, especially settlements both type category.

Speaker Change: The growth in Asia was partially offset by a decline in the Americas.

Speaker Change: The North America business has been affected by some preorders from key retailers, who are relying more on depression orders as they order stock closer to need.

Speaker Change: He may have single digit growth led by software, partially offset by winter sports equipment subgroups.

Sullivan: As you know we are undergoing a management transition at Sullivan.

Sullivan: And I am operating as interim brand CEO, where we perform a comprehensive search for the next brand leader.

Sullivan: Now six weeks into my interim low I'm, even more confident in the settlement brand our team.

Speaker Change: Ammonia is a strong and a unique brand with a sizable opportunity to grow its footwear franchise globally.

Speaker Change: We believe the global market is that a unique crossroads.

Speaker Change: More than ever before consumers are open to new brands and products.

Solomon: And we believe Solomons authentic mountain sports Heritage and a unique performance technology will allow us to become one of the most impactful up and coming E brands.

Speaker Change: I see three key strategic priorities for the <unk> brand as we look to accelerated footwear growth globally.

Speaker Change: Particularly in EMEA and in North America.

Speaker Change: Number one the new customer accuracy issue number two after refined leadership in footwear and the number three.

Speaker Change: Limiting the accessibility and the visibility of Saddam's products.

Speaker Change: I believe it's very important for the brand to win its home market of Europe, and we are focused on revenue both the Paris Olympics. This summer and the 2026 millennial Cortina Olympic games, where sodomy is an official partner.

Speaker Change: These high profile events will elevate the profile and the reach of Saddam across Europe.

Speaker Change: To support our commercial strategy in E mail and the to build upon our brand heat along these events. We are opening our Solomon flagships under <unk>. In addition to our recent store openings in laminate.

Speaker Change: I am confident in the brand and our team headquartered in NSE travel to deliver continued profitable growth in the near and the long term.

Speaker Change: With that I will turn to over to Andrew to discuss board and a record as well as the group results and the outlook.

Andrew Page: Thanks, James moving to ball and record.

Andrew Page: Revenue decreased 14% to $273 million as Wilson continues to be constrained by challenges comparing against strong growth and profitability last year in Q1.

Andrew Page: Recall this time last year, both retailers and consumers were buying earlier in the season to avoid stock outs.

Speaker Change: Retail ordering patterns have now returned to a more normal seasonal cadence and are back to buying stock closer to need.

Speaker Change: Importantly, Wilson continues to hold or gain share in terms of retail sell through and almost every one of its categories, which positions us well for when order trends improve.

Speaker Change: From a category perspective in.

Speaker Change: In Q1, Wilson sportswear achieved very strong double digit growth, although off a small base, which was more than offset by declines in other categories.

Speaker Change: Tennis declined due to slowness in the overall market across geographies, except for slight growth in China.

Speaker Change: Despite the decline Wilson returned to the number one performance racket brand in the U S fueled by the launch of the new blade bracket in February.

Speaker Change: During Q1.

Speaker Change: Wilson opened four new brand stores two in the U S and two in China.

Speaker Change: We are seeing positive signals in China, DTC with the new Wilsons store in Shenzen generating extremely strong early sales results led by our tenants 360 presentation.

Looking ahead, we are confident that our market leadership position and flow of innovative products positioned ball and bracket well for wind industry inventories reach balance and retailer orders and sell ins begin to reaccelerate.

Speaker Change: Which we still anticipate beginning in <unk> two this year.

Speaker Change: We're getting some early indications from retail partners of improving future order trends and we're also seeing reorder velocity pick up.

Speaker Change: Given the inventory cleanup in the back half of last year, our year over year comparisons will become easier in Q3 and Q4.

Speaker Change: Wilson has strong product plans in place for the second half of the year, including a unique partnership for an exclusive line of basketball, So Caitlin Clarke, which we announced earlier this morning Caitlin.

Speaker Change: Caitlin Clarke is one of the most visible of popular basketball stars in the game right now and she will be the new face of Wilson basketball.

Caitlin Clarke: Caitlin, it's a true sports and cultural superstar and will play a leading role in developing our basketball marketing campaigns from men's to women's and youth and professional a clear sign that the women's game and its influence is exploding the.

Speaker Change: The Womens NCWA Championship game was more watch than the men's final for the first time ever this year.

Speaker Change: Not only will Caitlin star in our marketing we will also develop with her a dedicated Caitlin Clarke basketball product line to express her personal story through our innovative basketball products.

Speaker Change: Additionally, Wilson is accelerating its new baseball glove merchandising strategy to flow more newness and colourway launches more frequently.

$273 million as Wilson continues to be constrained by challenges comparing against strong growth and profitability last year in Q1.

Speaker Change: We are also happy to announce that Wilson and the NFL has renewed its contract for a long term extension ensuring that Wilson will continue to be the only brand ever score touchdown NFL history for more years to come.

Recall this time last year, both retailers and consumers were buying earlier in the season to avoid stock outs.

Retailer ordering patterns have now returned to a more normal seasonal cadence and are back to buying stock closer to need.

Speaker Change: This news coincides with the opening of a new state of the art leather football manufacturing facility in <unk>, Ohio.

Importantly, Wilson continues to hold or gain share in terms of retail sell through and almost every one of its categories, which positions us well for when order trends improve.

Speaker Change: This cutting edge plant will also become a center of excellence for customization and personalization.

Lastly, we are relaunching, our NBA ball with new products and storytelling at retail, which will be our most expensive product refresh since our contract began in 2021.

From a category perspective.

In Q1, Wilson sportswear achieved very strong double digit growth, although off a small base, which was more than offset by declines in other categories.

Speaker Change #100: Now to the numbers.

Speaker Change #100: As James alluded to the fast growth of our high margin <unk> franchise is elevating the growth and profitability profile of Emirates Sports group in total.

Tennis declined due to slowness in the overall market across geographies, except for slight growth in China.

Despite the decline Wilson returned to the number one performance racket brand in the U S fueled by the launch of the new blade bracket in February.

James: This dynamic allows us to deliver best in class profitable growth for shareholders, while continuing to reinvest in the many growth opportunities across our portfolio of brands, especially our terex in salary.

During Q1.

Also opened four new brand stores.

James: In summary.

Two in the U S and two in China.

James: 14% constant currency growth means that we are winning with consumers, allowing us to deliver results ahead of the expectations. We set in March.

We are seeing positive signals in China, DTC with the new Wilsons store in Shenzen generating extremely strong early sales results led by our tenants 360 presentation.

Speaker Change #102: At the group level sales growth was fueled by outperformance in technical apparel and strong growth in the D to C channel, China and Asia Pacific.

Looking ahead, we are confident that our market leadership position and flow of innovative products positions ball and bracket well for wind industry inventories reach balance and retailer orders and sell ins began to reaccelerate.

Turning to profitability adjusted gross profit margin Rose 110 basis points to 54, three in Q1, primarily driven by the company's highest gross margin business, our terex growing faster than the other brands.

Which we still anticipate beginning in 82 this year.

Speaker Change #103: Lower logistics costs improve sourcing performance and channel and regional mix also drove gross margin expansion.

We're getting some early indications from retail partner of improving future order trends and we're also seeing reorder velocity pick up.

Speaker Change #103: This was partially offset by an unfavorable FX impact and technical apparel and inventory adjustments related to the outdoor performance and ball and racket segments.

Given the inventory cleanup in the back half of last year, our year over year comparisons will become easier in Q3 and Q4.

Wilson has strong product plans in place for the second half of the year, including a unique partnership for an exclusive line of basketballs with Caitlin Clarke, which we announced earlier this morning.

Speaker Change #104: Adjusted SG&A expenses as a percentage of revenue increased 420 basis points and represented 43, 7% of revenues in Q1 in line with our expectations and guidance.

Caitlin Clarke is one of the most visible at popular basketball stars in the game right now and she will be the new face of Wilson basketball.

Speaker Change #105: Primary drivers of higher SG&A include anticipated spend related to the higher mix of <unk> sales as well as key investments to support our growth, including it infrastructure investments and new store openings.

Caitlin, it's a true sports and cultural superstar and will play a leading role in developing our basketball marketing campaigns from men's to women's and youth and professional a clear sign that the women's game and its influence is exploding the.

Adjusted operating margin fell 240 basis points from 13, 4% and <unk> of 2023% to 11% in the first quarter of 2024 above our guidance of 9% to 10%.

Speaker Change: The Womens NCWA Championship game was more watch than the men's final for the first time ever this year.

Speaker Change #106: Looking at margins by segment technical apparel, adjusted operating margin contracted 40 basis points to 23% versus the strong margin comparison in Q1 of last year, driven primarily by lower gross margin from foreign exchange losses.

Speaker Change: Not only will Caitlin star in our marketing we will also develop with her a dedicated Caitlin Clarke basketball product line to express her personal story through our innovative basketball products.

Speaker Change: Additionally, Wilson is accelerating its new baseball glove merchandising strategy to flow more newness and callaway launches more frequently.

Speaker Change #107: Peak performance was also a slight drag on technical apparel segment margin.

Speaker Change: We are also happy to announce that Wilson and the NFL has renewed its contract for a long term extension ensuring that Wilson will continue to be the only brand ever score a touchdown NFL history for more years to come.

Speaker Change #108: The outdoor performance segment adjusted operating profit margin contracted 340 basis points to four 8% as expected.

Speaker Change #109: This was due to DTC driven gross margin expansion that was more than offset by higher investment in operating expenses to support <unk> growth opportunities in footwear in both the Americas and greater China.

Speaker Change: This news coincides with the opening of a new state of the art leather football manufacturing facility in <unk>, Ohio. This cutting edge plant will also become a center of excellence for customization and personalization.

Speaker Change #110: As expected the ball a racket segment adjusted operating margin contracted 140 basis points compared to the first quarter of 2023% to 4%.

Speaker Change: Lastly, we are relaunching, our NBA ball with new products and storytelling that retail, which will be our most expensive product refresh since our contract began in 2021.

Speaker Change #111: This margin compression was due to a deterioration in gross margin driven mainly by discounts customer mix inventory cost update SG&A deleverage and a difficult margin comparison.

Speaker Change: Now to the numbers.

Speaker Change: As James alluded to the fast growth of our high margin <unk> franchise is elevating the growth and profitability profile of Ameren Sports group in total.

Speaker Change #112: Corporate expenses were $18 million and depreciation and amortization was $62 million, which includes $26 million of REIT abuse depreciation.

Speaker Change: This dynamic allows us to deliver best in class profitable growth for shareholders, while continuing to reinvest in the many growth opportunities across our portfolio of brands, especially our terex in salary.

Speaker Change #113: Adjusted net finance costs in the quarter was $76 million well below the $100 million to $110 million, we guided to on our last call.

Speaker Change: In summary <unk>.

Speaker Change: 14% constant currency growth means that we are winning with consumers, allowing us to deliver results ahead of the expectations. We set in March.

Speaker Change #114: This reflects the benefit of hedging strategies and the exclusion of approximately $17 million of one time finance costs related to our debt restructuring in February.

Speaker Change: The group level sales growth was fueled by outperformance in technical apparel and strong growth in the D to C channel, China and Asia Pacific.

Speaker Change #115: Also note that the $76 million still includes approximately $30 million of other finance costs that won't recur on an ongoing basis.

Speaker Change: Turning to profitability adjusted gross profit margin Rose 110 basis points to 54, three in Q1, primarily driven by the company's highest gross margin business <unk> growing faster than the other brands.

Speaker Change #115: Our effective tax rate in the quarter was 25%.

Speaker Change #116: Adjusted net income was $39 million for the first quarter of 2024 compared to adjusted net income of $27 million in the prior year period.

Speaker Change: Lower logistics costs improve sourcing performance and channel and regional mix also drove gross margin expansion.

Speaker Change #116: Adjusted diluted earnings per share was 8%.

Compared to adjusted diluted earnings per share of <unk> <unk> for the same period last year.

Speaker Change: This was partially offset by an unfavorable FX impact and technical apparel and inventory adjustments related to the outdoor performance in Boston racquet segments.

Speaker Change #117: Turning to the balance sheet and cash flow we.

Speaker Change #118: We significantly improved our capital structure in Q1, using the IPO proceeds to retire approximately one 4 billion.

Speaker Change: Adjusted SG&A expenses as a percentage of revenue increased 420 basis points and represented 43, 7% of revenues in Q1 in line with our expectations and guidance the.

Speaker Change #119: Debt, our net debt to third parties declined from $3 $2 billion at year end to $1 7 billion at the end of the first quarter.

Speaker Change: The primary drivers of higher SG&A include anticipated spend related to the higher mix of <unk> sales as well as key investments to support our growth, including it infrastructure investments.

Speaker Change #120: Using the midpoint of our 2024 adjusted operating profit guidance, our net debt to adjusted non Ifr EBITDA ratio is already approaching two five times.

Speaker Change: And new store openings.

Speaker Change #121: Please note that we will focus on bringing down the leverage ratio to one five times or better in the next few years through both EBITDA expansion and debt Paydown.

Speaker Change: Adjusted operating margin fell 240 basis points from 13, 4% and <unk> of 2023% to 11% in the first quarter of 2024 above our guidance of 9% to 10%.

Speaker Change #121: Our focus on inventory discipline is paying off as inventories finished Q1 and healthy condition up only 6% year over year versus 13% sales growth.

Speaker Change: Looking at margins by segment technical apparel, adjusted operating margin contracted 40 basis points to 23% versus the strong margin comparison in Q1 of last year, driven primarily by lower gross margin from foreign exchange losses.

This is better than our goal to grow inventories in line with or slower than sales growth a target we will continue to aggressively pursue going forward.

Speaker Change #122: Before discussing guidance I want to touch on the NV sale announcement and the status of the Amyris sports portfolio.

Speaker Change: Peak performance was also a slight drag on technical apparel segment margin.

Speaker Change: The outdoor performance segment adjusted operating profit margin contracted 340 basis points to four 8% as expected.

Speaker Change #122: As we published in early May.

Speaker Change #123: So our NV business. This is a small franchise, serving the premium cycle market and non core to our portfolio of premium technical sports and outdoor brands.

Speaker Change: This was due to DTC driven gross margin expansion that was more than offset by higher investment in operating expenses to support <unk> growth opportunities in footwear in both the Americas and greater China.

Speaker Change #124: And we generated approximately $25 million of annual sales evenly spread across the four quarters.

Speaker Change #125: Following this divestiture, we are comfortable with and very excited about our 10 remaining brands. They all still have significant profitable growth opportunities, although the NV sale in other previous divestitures indicate our willingness to evolve the portfolio when necessary as certain franchises are no longer.

Speaker Change: As expected the ball a racket segment adjusted operating margin contracted one.

Speaker Change: 40 basis points compared to the first quarter of 2023% to 4%.

Speaker Change: This margin compression was due to a deterioration in gross margin driven mainly by discounts customer mix inventory cost update SG&A deleverage and a difficult margin comparison.

Speaker Change #126: Strategic and material to our value creation algorithm M&A is not a priority in the near term.

Speaker Change #127: Now turning to guidance.

Speaker Change: Corporate expenses were $18 million and.

Speaker Change #127: Given our confidence in our portfolio and its financial performance, we are slightly raising our guidance for the full year adjusted diluted EPS, Despite a higher than originally anticipated effective tax rate.

Speaker Change: Depreciation and amortization was $62 million, which includes $26 million of REIT abuse depreciation.

Speaker Change: Adjusted net finance costs in the quarter was $76 million well below the $100 million to $110 million, we guided to on our last call.

Speaker Change #127: However, the fact that we have only one quarter of the year under our belt and absorbing the loss of the NV revenue for the remainder of the year, we are not raising full year revenue guidance. At this time, however should trends continue and stronger than anticipated demand materialize. There is no structural reason.

Speaker Change: This reflects the benefit of hedging strategies and the exclusion of approximately $17 million of one time finance costs related to our debt restructuring in February.

Speaker Change: Also note that the $76 million still includes approximately $30 million of other finance costs that won't recur on an ongoing basis.

Speaker Change #128: To prevent us from continuing to deliver financial performance ahead of our expectations.

Speaker Change #129: For the full year, we continue to expect mid teens revenue growth given the upside in Q1, we are more comfortable that we will end the year towards the high end of the mid teens range.

Speaker Change: Our effective tax rate in the quarter was 25% adjusted net income was $39 million for the first quarter of 2024 compared to adjusted net income of $27 million in the prior year period.

Speaker Change #130: This incorporates greater than 25% growth in technical apparel mid to high single digit growth in outdoor performance, including the NV divestment.

Speaker Change: Adjusted diluted earnings per share was eight.

Speaker Change: Compared to adjusted diluted earnings per share of <unk> <unk> for the same period last year.

Speaker Change #130: And low to mid single digit growth in Poland racket.

Speaker Change #130: For the year, we expect FX to be neutral to reported sales growth at the group level.

Speaker Change: Turning to the balance sheet and cash flow.

Speaker Change: We significantly improved our capital structure in Q1, using the IPO proceeds to retire approximately one $4 billion of.

Speaker Change #131: We slightly increased our adjusted gross profit margin guidance, which is expected to be approximately 54%.

Speaker Change #132: We also still expect an adjusted operating profit margin of 10, 5% to 11% for 2024.

Speaker Change: Of debt, our net debt to third parties declined from $3 $2 billion at year end to $1 7 billion at the end of the first quarter.

Speaker Change #133: Our net finance costs for the year will be $215 million to $225 million and we expect to have an effective tax rate on an adjusted pre tax income of approximately 38% versus the 25% to 35% expected previously.

Speaker Change: Using the midpoint of our 2024 adjusted operating profit guidance, our net debt to adjusted non Ifr EBITDA ratio is already approaching two five times.

Speaker Change: Please note that we will focus on bringing down the leverage ratio to one five times or better in the next few years through both EBITDA expansion and debt Paydown.

Speaker Change #134: The higher effective tax rate reflects deductibility limitations related to interest expense associated with our debt we.

Speaker Change #135: We are designing and implementing strategies to reduce our effective tax rate and we are confident that we will be able to reduce our effective tax rate to a level that is consistent with other global consumer companies.

Speaker Change: Our focus on inventory discipline is paying off as inventories finished Q1 and healthy condition up only 6% year over year versus 13% sales growth.

Speaker Change #135: We now expect adjusted diluted EPS to be towards the high end of the previous guidance range of 30 to 40 per share.

Speaker Change: This is better than our goal to grow inventories in line with or slower than sales growth a target we will continue to aggressively pursue going forward.

Speaker Change #136: Looking at the segments, we expect 2024, adjusted operating profit margin of slightly above 20% for technical apparel high single digit for outdoor performance and a low mid single digit adjusted segment margin for ball and racket.

Speaker Change: Before discussing guidance I want to touch on the NV sale announcement and the status of the Amyris sports portfolio.

Speaker Change: As we published in early May.

Speaker Change: Our NV business. This is a small franchise, serving the premium cycle market and non core to our portfolio of premium technical sports and outdoor brands.

Speaker Change #137: Looking at Q2, we expect revenue growth for the group to be approximately 10% led by technical apparel.

NV generated approximately $25 million of annual sales evenly spread across the four quarters.

We expect <unk> adjusted gross margin to be approximately 54% driven primarily by mix shift benefit and an adjusted operating profit margin of approximately zero percent.

Speaker Change: Following this divestiture, we are comfortable with and very excited about our 10 remaining brands. They all still have significant profitable growth opportunities.

Speaker Change #138: Based on current interest rates, our net finance costs for the quarter would be $45 million to $50 million and an effective tax rate of approximately 38%. This leads to adjusted diluted EPS in the range of a <unk> lost <unk> <unk> loss per share with that ill turn back to the <unk>.

Speaker Change: Though the NV sale in other previous divestitures indicate our willingness to evolve the portfolio when necessary as certain franchises are no longer strategic and material to our value creation algorithm M&A is not a priority in the near term.

Speaker Change #138: Greater for Q&A.

Speaker Change: Now turning to guidance.

Speaker Change: Given our confidence in our portfolio and its financial performance, we are slightly raising our guidance for the full year adjusted diluted EPS, Despite a higher than originally anticipated effective tax rate.

Speaker Change #139: Thank you the floor is now open for questions.

After Eldon and I would like to ask a question. Please press star one on your telephone keypad to raise your hand and join the queue.

Eldon: I'd like to remove or withdraw your question simply press star one again.

Speaker Change: However, the fact that we have only one quarter of the year under our belt and absorbing the loss of the NV revenue for the remainder of the year, we are not raising full year revenue guidance. At this time, however should trends continue and stronger than anticipated demand materialize. There is no structural reason.

Speaker Change #141: If you are called upon to ask a question and and listening via loud speaker on your device. Please pickup your handset to ensure that your phone is not on mute when asking a question.

We do request for today's session in order to allow as many questions as possible that you. Please limit yourself to one question and one follow up.

Speaker Change #141: Your first question comes from the line of Lorraine Hutchinson.

Speaker Change: To prevent us from continuing to deliver financial performance ahead of our expectations.

Speaker Change #142: <unk> of America. Your line is open.

Speaker Change #143: Thank you good morning.

Lorraine Hutchinson: Regarding our Keryx you spoke about outsize growth in footwear and women's can you talk about how big these two categories are today.

For the full year, we continue to expect mid teens revenue growth given the upside in Q1, we are more comfortable that we will end the year towards the high end of the mid teens range.

Speaker Change #145: As for the penetration going forward and any margin implications of growing these categories.

Lorraine Stuart: Hey, Lorraine Stuart Yes.

Speaker Change: This incorporates greater than 25% growth in technical apparel mid to high single digit growth in outdoor performance, including the NV divestment and low to mid single digit growth in Boston racquet.

Speaker Change #147: Thanks for the question.

Speaker Change #148: Very excited about.

Lorraine Stuart: The momentum that we're seeing both in our new footwear line as well.

Lorraine Stuart: Potential for our womens.

Speaker Change #149: So women's is just over 20% of our business.

For the year, we expect FX to be neutral to reported sales growth at the group level.

Speaker Change #150: Currently we think that could be upwards of 40% in time.

Speaker Change: We slightly increased our adjusted gross profit margin guidance, which is expected to be approximately 54%.

Speaker Change #150: Organize.

Speaker Change #151: Powerful team inside the company to work on that strategy.

Speaker Change #151: Where.

Speaker Change #151: We've been working on it now for about three years.

Speaker Change: We also still expect an adjusted operating profit margin of 10, 5% to 11% for 2024.

Speaker Change #152: The exciting launch of the three new models that have been designed in our Portland.

Speaker Change #152: John centers.

Speaker Change: Our net finance costs for the year will be $215 million to $225 million and we expect to have an effective tax rate on an adjusted pre tax income of approximately 38% versus the 25% to 35% expected previously.

Speaker Change #152: That was mentioned on the prepared remarks.

Speaker Change #153: And we see that business growing rapidly.

Speaker Change #154: Through the end of last year, it was right around 6% of sales.

Speaker Change #155: Since we launched the <unk> models, we've seen.

Speaker Change #156: Penetration of footwear.

Speaker Change: The higher effective tax rate reflects deductibility limitations related to interest expense associated with our debt.

Speaker Change #156: <unk> grew to 10% I think as James mentioned.

Speaker Change #157: And we're really seeing.

James: That's exciting momentum with these three new models that represent almost 50% of sales.

Speaker Change: We are designing and implementing strategies to reduce our effective tax rate and we are confident that we will be able to reduce our effective tax rate to a level that is consistent with other global consumer companies.

James: Since we launched.

Speaker Change #158: We are seeing in the 10 weeks central launch our footwear.

Speaker Change #158: Revenues increased.

Speaker Change #158: Over 100% so.

Speaker Change: We now expect adjusted diluted EPS to be towards the high end of the previous guidance range of 30 to 40 per share.

Speaker Change #159: We really believe that our terex has.

Speaker Change #159: Sure.

Speaker Change #160: Legitimate competitor in the athletic footwear space.

Speaker Change: Looking at the segments, we expect 2024, adjusted operating profit margin of slightly above 20% for technical apparel high single digit for outdoor performance and a low mid single digit adjusted segment margin for ball and racket.

Speaker Change #160: And from a margin standpoint.

Speaker Change #161: It's a relatively small business today, it's slightly dilutive to our overall margin, but we think as we grow it.

Speaker Change #162: <unk> was arrested.

Speaker Change #162: Product margins.

Speaker Change #163: Not a real challenge for margins.

Speaker Change #164: Margins are very healthy very strong.

Speaker Change: Looking at Q2, we expect revenue growth for the group to be approximately 10% led by technical apparel.

Speaker Change #164: <unk>.

Speaker Change #165: With our managed margins.

Speaker Change #165: Yes.

Speaker Change #165: Students.

Speaker Change #166: Parts of our business and do that we have identified internally.

We expect <unk> adjusted gross margin to be approximately 54% driven primarily by mix shift benefit and an adjusted operating profit margin of approximately zero percent.

Speaker Change #166: Alrighty.

Speaker Change #167: Thank you.

Speaker Change #167: Your next question comes from the line of Matthew Boss of Jpmorgan. Your line is open.

Speaker Change: Based on current interest rates, our net finance costs for the quarter would be $45 million to $50 million and an effective tax rate of approximately 38%. This leads to adjusted diluted EPS in the range of a <unk> lost <unk> <unk> loss per share with that I'll turn back to the <unk>.

Speaker Change #167: Great. Thanks, maybe Stuart just to pick up on that at our Terex.

Matthew Boss: Could you speak to new customer acquisition trends that youre seeing at the brand and any change in momentum at the brand as we think about second quarter to date, just relative to first quarter performance and Andrew on gross margin. So this year, 54% is there any feeling as we think about gross margin performance moving forward.

Speaker Change: Greater for Q&A.

Speaker Change: Thank you the floor is now open for questions.

Speaker Change: Gerald and I would like to ask a question. Please press star one on your telephone keypad to raise your hand and join the queue.

Andrew Page: I think 54 was the long term target.

Andrew Page: So just any constraints that further gross margin expansion from here.

Speaker Change: Like to remove or withdraw your question simply press star one again.

Andrew Page: Hey, Matt This is Andrew I'll start off with the gross margin and turn it over with regard to gross margin as you all are long term.

Speaker Change: If you are called upon to ask a question and and listening via loud speaker on your device. Please pickup your handset to ensure that your phone is not on mute when asking a question.

Andrew Page: We thought that we had.

Speaker Change: We do request for today's session in order to allow as many questions as possible that you. Please limit yourself to one question and one follow up.

Andrew Page: Meaningful upside on a long term basis gross margin.

Andrew Page: About 300 points and we have now.

Speaker Change: Your first question comes from the line of Lorraine Hutchinson of.

As you can see as we continue to grow.

Speaker Change: Bank of America. Your line is open.

Speaker Change #169: Grow our business and weakness.

Speaker Change #169: Sure.

Lorraine Hutchinson: Thank you good morning.

Speaker Change #170: Our fastest franchise and our most profitable channels faster it is that.

Speaker Change: Keryx you spoke about outsized growth in footwear and women's can you talk about how big these two categories are today goals for the penetration going forward and any margin implications of growing these categories.

Speaker Change #171: But meaningful compounding effect.

Speaker Change #172: We've also talked about the fact that we have planned our business is structured our business.

Speaker Change #172: No.

Stuart: Hey, Lorraine Stuart.

Around what we believe to be prudent growth rates, but to the extent that.

Speaker Change: Yes, thanks for the question.

Very excited about that.

Speaker Change #173: As demand materializes, we are able to service that demand as those structural constraints that prevents us from services at demand. So you saw that.

The momentum that we're seeing both in our new footwear line as well.

Speaker Change: Potential for our womens.

Speaker Change: So women's is just over 20% of our business.

Speaker Change #174: One with regard to our Ericsson NSO performance again as a compound so I do think that.

Speaker Change: Currently we think that could be upwards of 40%.

Speaker Change: We organize.

Speaker Change #175: As we continue to seek to grow that business it is going to be strong.

Speaker Change: Powerful team inside the company to work on that strategy.

Speaker Change #175: Strong impact on gross margin as Stuart alluded to even the new categories that we expect.

Speaker Change: Footwear.

Speaker Change: We've been working on it now for about three years.

Speaker Change: The exciting launch of the three new models that have been designed in our Portland.

Speaker Change #176: So as far as women's footwear.

Speaker Change #177: We don't see those as two youre aiding gross margins well, we continue to drive D to C and our outdoor outdoor performance footwear. That's also and it is built in our guidance also.

Speaker Change: Data centers.

Speaker Change: That was mentioned on the prepared remarks.

Speaker Change: And.

You see that business growing rapidly.

Speaker Change: Through the end of last year, it was right around 6% of sales.

Speaker Change: Since we launched three new models, we've seen.

Speaker Change #178: Yes, Matt to your to your other questions on our carrier so really happy with the momentum that we saw in the first quarter in a strong kpis fundamentals across regions and channels.

Speaker Change: Penetration of footwear.

Speaker Change: We're at 10% I think James mentioned.

Speaker Change: I am really saying.

Speaker Change: This exciting momentum with these three new models that represent almost 50% of sales.

Speaker Change #178: Constantly.

Speaker Change #178: That we reported.

Speaker Change: Since we launched.

Speaker Change #178: That is up against some very difficult.

Speaker Change: We're seeing in the 10 weeks central launch our footwear.

Speaker Change #178: Last year comparisons.

Speaker Change #179: And I'm pleased with the balanced.

Speaker Change: Revenues increased over 100% so.

Speaker Change #180: The business regionally strong results in North America, China, or APAC business as well so.

Speaker Change: We really believe that our terex has a feature.

Speaker Change: The legitimate competitor in the athletic footwear space.

Speaker Change #180: <unk>.

Speaker Change #181: It's a really exciting momentum that we're seeing across really every part of the business as we look at the second quarter.

Speaker Change: And from a margin standpoint.

Speaker Change: It's a relatively small business today, it's slightly dilutive to our overall margin, but we think as we grow it.

Seeing these trends continue.

Speaker Change #182: We're lapping the toughest comparisons this year on a quarterly basis versus the second quarter of last year.

Speaker Change: Our hardwoods.

Speaker Change: Our product margins.

Speaker Change: Not a real challenge on margins.

Speaker Change #183: And yet we're still very pleased with the omnicom momentum.

Speaker Change: Okay.

Speaker Change: Margins are very healthy very strong and on par with our managed margins well so.

Speaker Change #183: So we are seeing in the second quarter.

Speaker Change #183: And it's really a it's a high quality full price growth story and again, we're continuing to see great balanced regionally and by channel.

Speaker Change: Students.

Speaker Change: Parts of our business.

Speaker Change: We have identified internally.

Speaker Change: Alrighty.

Speaker Change: Thank you.

Speaker Change #184: We're in a strong inventory position that we havent been throughout all of last year were much stronger coming into this year gives us.

Speaker Change: Your next question comes from the line of Matthew Boss of Jpmorgan. Your line is open.

Speaker Change: Great. Thanks, maybe Stuart just to pick up on that at our Terex.

Speaker Change #184: Gas in the tank to outperform.

Speaker Change #185: That materializes.

Speaker Change: Could you speak to new customer acquisition trends that youre seeing at the brand and any change in momentum at the brand as we think about second quarter to date, just relative to first quarter performance.

Speaker Change #185: <unk>.

Speaker Change #186: And in regards to your other question on <unk>.

Speaker Change #187: Customer acquisition.

Speaker Change #188: Continued to see strong.

Speaker Change #189: Customer guest file.

Speaker Change #189: Spansion.

Speaker Change: Andrew on gross margin. So this year, 54% is there any ceiling as we think about gross margin performance moving forward I think 54 was the long term target. So just any constraints, Jeff further gross margin expansion from here.

Speaker Change #190: Healthy average.

Speaker Change #191: Patterns and retention.

Speaker Change #192: And acquisition statistics that we measure across every region. So we're pleased with how the guest filed its expanding.

Speaker Change #192: Bill.

Speaker Change #193: Cultivating a very strong level of engagement.

Andrew: Hi, This is Andrew I'll start off with the gross margin and then turn it over with regard to gross margin as you all are long term.

Speaker Change #194: That is.

Speaker Change #195: Pay off for years to come.

Speaker Change #196: That's great color best of luck.

Speaker Change: We thought that we had.

Speaker Change: Meaningful upside on a long term basis gross margin.

Speaker Change #196: Your next question comes from the line of Brooke Roach of Goldman Sachs. Your line is open.

Speaker Change: About 300 points and we have.

Speaker Change #197: Good morning, and thank you for taking our question.

Speaker Change: As you can see as we continue to.

Speaker Change: Grow our business and we.

Speaker Change #198: As you contemplate the stronger momentum in York Terex brand, how are you thinking about reinvesting upside for future growth back into SG&A versus flowing through that stronger leverage to the bottom line.

Speaker Change: Sure.

Speaker Change: Our fastest franchise and our most profitable channels faster it is a meaningful compounding effect.

Speaker Change: We've also talked about the fact that we have planned our business is structured our business.

Speaker Change #198: And then perhaps for Andrew.

Speaker Change #199: Moving future order trends from retail partners in North America wholesale can you elaborate on inventory levels today for both Paul and rocket in outdoor performance and the drivers of your improved confidence for stronger growth in those segments in the back half.

Speaker Change: Yes.

Speaker Change: Around what we believe to be prudent growth rate, but to the extent that.

Speaker Change: That demand materialize, we aren't able to service that demand as those structural constraints that prevents us from services demand. So you saw that in.

Speaker Change #198: You.

Stuart Hazelton: Hey Brook, it's Stuart so.

Stuart Hazelton: Absolutely.

Stuart Hazelton: SG&A standpoint, and reinvestment. We are we are taking a portion of the fees that we're seeing on the top line and reinvesting the business.

Q1 with regard to our Terex NSO performance again as a compound in fact, so I do think that.

Speaker Change: As we continue to grow that business it is going to be strong.

Stuart Hazelton: Given the pace of growth that we're seeing is it's imperative that we are looking into the future and identify critical strategic investments that we have.

Speaker Change: Strong impact on gross margin as Stuart alluded to even the new categories that we expect.

Speaker Change: So as far as women's footwear.

Stuart Hazelton: In order to sustain the trajectory and build the business long term we have seen.

Speaker Change: We don't see those as two youre aiding gross margins well, we continue to drive D to C and our outdoor outdoor performance business footwear. That's also and it's built in our guidance also.

Speaker Change #201: Closer to growth over the last.

Speaker Change #201: Three years.

Speaker Change #201: We can only sustained this is building a very solid foundation.

Speaker Change #201: Areas that we're focused on.

Speaker Change #202: For investment.

Speaker Change: Yes, Matt to your to your other questions on a carrying so really happy with the momentum that we saw in the first quarter strong kpis fundamentals across regions and channels.

Speaker Change #203: Our infrastructure our supply chain technology.

Speaker Change #202: Yeah.

Speaker Change #204: First talk about in the past the investments that we've made.

Speaker Change #205: To strengthen our supply chain, our ERP systems and technology, our digital platforms for our E. Commerce. So these are all areas that we're very focused on ensuring a strong.

Speaker Change: On the comps.

Speaker Change: As we reported.

Speaker Change: It was up against some very difficult.

Speaker Change: Last year comparisons.

Speaker Change: And I'm pleased with the balanced.

Speaker Change #206: For the.

Speaker Change #206: Scale of business that we're in.

Speaker Change: The business regionally strong results in North America, China, or APAC business as well so.

Speaker Change #207: And otherwise just across key parts of our our infrastructure from products.

Speaker Change #208: Product team to this brand team.

Speaker Change: It's a really exciting momentum that we're seeing across really every part of the business as we look at the second quarter.

Speaker Change #209: Our commercial team well.

Speaker Change #209: This.

Speaker Change #210: The business is seeing exciting growth, we've seen and that's the only sustainable if we are able to.

Speaker Change: Seeing these trends continue.

Speaker Change: We're lapping the toughest comparisons this year on a quarterly basis versus the second quarter of last year.

Speaker Change #210: Yes.

Speaker Change #211: Yes, I'd also mentioned.

Speaker Change #212: We're seeing very strong store expansion.

Speaker Change: And yet we're still very pleased with the omni comp momentum.

Speaker Change #213: Is another important area of investments the second quarter, we're going to see the highest number of store openings. This year will have in 17.

So we are seeing in the second quarter.

Speaker Change: And it's really a it's a high quality full price growth story and again, we're continuing to see great balanced regionally and by channel.

Our 17 new stores.

Speaker Change #214: Those four or five stores.

Speaker Change: We're in a strong inventory position that we havent been throughout all of last year were much stronger coming into this year gives us.

Speaker Change #214: Second quarter that will be that stores that we've opened probably ever.

Speaker Change #215: And the highest quarterly.

Speaker Change #215: Accordingly.

Speaker Change #215: Absolutely.

Speaker Change: Gas in the tank to outperform.

Speaker Change #215: Hey, Thanks Brooks this is Andrew.

Speaker Change: Materializes.

Speaker Change: So.

Andrew Page: You alluded to.

And in regards to your other question on <unk>.

Brooks: Inventory North American wholesale.

Speaker Change: Customer acquisition.

Speaker Change #217: So as we exited 2023 really nice story.

Speaker Change: Continued to see strong.

Speaker Change: Customer guest.

Andrew Page: You can see as we move through 2024 inventory was up about 6%.

Speaker Change: Spansion.

Speaker Change: Healthy average.

Speaker Change: Patterns and retention and.

Andrew Page: But exiting 2023 in a strong inventory position.

Speaker Change: An acquisition statistics that we measure across every region. So we're pleased with how the guest file is expanding.

Andrew Page: Well.

Speaker Change #218: Yes, very responsive to our wholesale partners we understand.

Speaker Change: Bill.

Speaker Change #219: The ordering cadence in the ordering pattern.

Speaker Change: Cultivating a very strong level of engagement.

Speaker Change #220: 2023, given the fact that.

Speaker Change: That is.

Speaker Change: Pay off for years to come.

Speaker Change #220: Wholesales were rushing to inventory exiting 2022 in the first quarter of 2023.

Speaker Change: That's great color best of luck.

Speaker Change #221: As comparison, but we look at both.

Speaker Change: Your next question comes from the line of Brooke Roach of Goldman Sachs. Your line is open.

Speaker Change #222: Our sell in to our wholesalers and as importantly, we look at our sell throughs sell through from our wholesale accounts.

Brooke Roach: Good morning, and thank you for taking our question.

Speaker Change #222: Okay.

Brooke Roach: As you contemplate the stronger momentum in York Terex brand, how are you thinking about reinvesting upside for future growth back into SG&A versus flowing through that stronger leverage to the bottom line.

Speaker Change #223: It's been leading across.

Speaker Change #223: Most of the categories that we participate in.

Speaker Change #224: The velocity is starting to pick up some preorders.

Speaker Change #225: So we have a healthy inventory position.

Speaker Change: And then perhaps for Andrew you spoke to improving future order trends from retail partners in North America wholesale can you elaborate on inventory levels today for both Paul and rocket in outdoor performance and the drivers of your improved confidence for stronger growth in those segments in the back half. Thank you.

Speaker Change #226: It's up to levels that says that.

We'd like for not carrying excess inventory cleaned that up and made meaningful investments.

Speaker Change #226: Fourth quarter of 2023, that's our inventory.

Speaker Change #226: Well positioned.

Speaker Change #227: As we stated a couple of times, we do feel like exiting <unk> and moving into the H two a couple of things the ones easier comparison for us because of the investments that I, just talked about and cleaning up inventory last year and.

Brooke Roach: You.

Stuart: Hey Brook, it's Stuart.

Stuart: Absolutely from a SG&A standpoint, and reinvestment. We are we are taking a portion of the fees that we're seeing on the top line and reinvesting the business.

Speaker Change #228: And signals from our wholesale accounts is that they believe that they are cleaning their inventory.

Speaker Change: Given the pace of growth that we're seeing is it's imperative that we are looking into the future and identify critical strategic investments that we need to have in order to sustain the trajectory and build the business long term we have seen.

Speaker Change #228: Sure.

Speaker Change #229: The data that we get from them is that even as even in a constrained in this region.

Speaker Change #230: We're taking share.

Speaker Change #231: To get out of each one.

Speaker Change: Explosive growth over the last.

Speaker Change #232: Very welcome thank advantage.

Speaker Change: Three years.

Speaker Change: We can only sustain this is building a very solid foundation.

Speaker Change #233: Or in the market, but our inventory is clean.

Speaker Change: Areas that we're focused on.

Speaker Change: For investment.

Speaker Change: Our infrastructure our supply chain technology.

Next question.

Speaker Change #233: Your next question comes from the line of Jay sole of UBS. Your line is open.

Yeah.

Speaker Change: Heard us talk about in the past the investments that we've made.

Jay Sole: Great. Thank you so much Jim I'm wondering if you can comment on the company's performance in China revenue in China was better than expected and I think there is a view of the consumer spending environment in China is kind of choppy. So can you just tell us more about how you are delivering really strong growth in China, and if you think that strong growth can continue.

Speaker Change: Strengthen our supply chain, our ERP systems and technology, our digital platforms for our E. Commerce. These are all areas that we're very focused on ensuring a strong.

Speaker Change: For the.

Speaker Change: Scale of business that we're in.

Speaker Change: And otherwise just across key parts of our infrastructure from product.

Jay Sole: Yeah.

Jay Sole: Hey, Jay This is Jan Thank you for your question.

Speaker Change: Product team to this brand team.

Speaker Change #235: A quick snapshot about how China, China current retail environment looks like okay. So actually.

Speaker Change: Our commercial team.

Speaker Change: <unk>.

Jan: Overall, China Chinese economy still face.

Speaker Change: The business is seeing exciting growth.

Speaker Change: We've seen and that's only sustainable if we are able to.

Jan: Big chunk.

Jan: Okay.

Speaker Change #237: You look at the macro situation and especially in consumer sectors.

Speaker Change: Yes.

Speaker Change: I'd also mentioned.

Speaker Change: We're seeing very strong store expansion.

Speaker Change #237: We have seen.

Speaker Change: <unk> is another important area of investments the second quarter, we're going to see the highest number of store openings. This year will have in 17.

Speaker Change #238: Big slowdown from the luxury segment as well as cosmetics.

Speaker Change #239: However, I mean in our industry supports the industry.

Speaker Change #240: I think the trend.

Speaker Change: Net 17 new stores.

Speaker Change #241: Moving to very positive.

Speaker Change: Those four or five stores.

Speaker Change #242: Direction, even more.

Speaker Change: Second quarter that will be the stores that we've opened probably ever.

Speaker Change #243: More and more consumers.

Speaker Change #243: They viewed it.

Speaker Change: And the highest.

Speaker Change #244: Is the most important matter India lifestyle, so basically yes.

Speaker Change: Accordingly.

Speaker Change: Absolutely.

Speaker Change #244: A lot of.

Andrew: Hey, Thanks Brooks this is Andrew.

Speaker Change #244: Consumers.

Speaker Change #244: They participate in.

Speaker Change: And you alluded to.

Speaker Change #245: Sports is a very high level and especially for our activity.

Speaker Change: Inventory North American wholesale.

Speaker Change: So as we exited 2023 really nice story.

Speaker Change #246: This gave us a very strong.

Speaker Change #247: Background to basically to grow our base appreciate for Carrington Saddam them both really.

Speaker Change: You can see as we move through 2020.

Speaker Change: <unk> inventory was up about six.

Speaker Change: But exiting 2023 in a strong inventory position.

Speaker Change #248: Really positioned in a very unique premium segment in China, our growth markets and.

Speaker Change: Well.

Speaker Change: Yes, very responsive to our wholesale partners, we understand that the ordering cadence in the ordering pattern.

Speaker Change #248: Especially.

Speaker Change #249: The tariffs really taking on leadership flow in China in Chinese overall, Chinese auto segments enter this segment, which.

Speaker Change: 23, given the fact that wholesalers.

Speaker Change #250: I mean basically it's performing.

Speaker Change: Wholesales were Washington inventory exiting 2022 in the first quarter of 2023.

Speaker Change #251: At this moment and <unk>.

Speaker Change #251: Likewise.

Speaker Change: Tough comparison, but we look at both.

Speaker Change #252: <unk> also in China also created a new fast Stephen based on the.

Speaker Change: Our sell in to our wholesale and as importantly, we look at our sell throughs sell through from our wholesale accounts has been picking up.

Speaker Change #253: So great introduction about our sports footwear business in China market.

Speaker Change: Leading across.

Speaker Change #253: No.

Speaker Change: Most of the categories that we participate in.

Speaker Change #253: Yes.

Speaker Change #254: I'm not sure I would say at the market.

Speaker Change: Velocity is starting to pick up some preorders.

Speaker Change: So we have a healthy inventory position not acceptable.

Speaker Change #255: Getting more challenging.

Speaker Change #256: Given the overall.

Speaker Change: It's up to the levels that.

Speaker Change #257: Economic development and.

Speaker Change: We'd like for not carrying excess inventory cleaned that up and made meaningful investments.

Speaker Change #258: Our segment skew very promising and.

Speaker Change: Fourth quarter of 2023, that's our inventory.

Speaker Change #259: And we see more and more consumers like to spend the money.

Speaker Change: Well positioned.

Speaker Change: As we stated a couple of times, we do feel like exiting H, one and moving into H two a couple of things one.

Speaker Change #260: Both activity and especially on for outdoor activities.

Speaker Change #260: The team here I'm going to steal Scott.

Speaker Change: Easier comparison for us because of the investments that I, just talked about and cleaning up inventory last year.

Speaker Change #261: Any high level of the comprehensive continue to drive our business based on our current footprint we setup for these two major brands.

Speaker Change: And signals from our wholesale accounts is that they believe that they are cleaning their inventory.

Sure.

Speaker Change: The data that we get from them is that even even in a constrained in this region.

Speaker Change #262: Your next question comes from the line of Ike <unk> of Wells Fargo. Your line is open.

Speaker Change: Taking share.

Speaker Change #263: Hey, good morning, everyone two questions Andrew Big picture for you just in North America, I guess, Jay hit kind of the China macro just in North America.

Speaker Change: To get out of each one.

Speaker Change: We believe that we're going to be very well to take advantage.

Speaker Change: Or in the market, but our inventory is clean.

Speaker Change #264: Kind of just what are you seeing versus three months ago anything to call out by kind of income cohort or price point across the brands just kind of trying to understand its very dynamic just trying to understand if there's anything to read into there good or bad and then maybe a quick follow up for Stuart just on the wholesale number for our generics in Q1, just kind of explain.

Speaker Change: Next question.

Speaker Change: Your next question comes from the line of Jay sole of UBS. Your line is open.

Jay Sole: Great. Thank you so much Jim I'm wondering if you can comment on the company's performance in China revenue in China was better than expected and I think there is.

Stuart Hazelton: What exactly drove that robust number and then why we should be expecting everything what exactly what kind of growth rates should we be expecting that to moderate.

Speaker Change: <unk>.

Jay Sole: We are spending environment in China is kind of choppy. So can you just tell us more about how you are delivering really strong growth in China, and if you think that strong growth can continue.

Speaker Change #265: Through the rest of the year I would be great. Thank you.

Yes, So let me let me touch on North America, again, a little bit.

Speaker Change: Yeah.

Jan: Hey, Jay This is Jan Thank you for your question.

Speaker Change #265: One last question and I'll, let hand, it over to Stuart talk about what we're seeing.

Jan: I'll give a quick snapshot about how China, China current retail environment look like okay. So actually.

Speaker Change #266: No we.

Speaker Change #267: Really it started coming out of 2023, we've redemption.

Jan: Overall, China Chinese economy still face Fig.

Jan: A big chunk.

Speaker Change #268: Whispers that.

Jan: Okay.

Jan: You look at the macro situation and especially in consumer sectors.

Speaker Change #269: They thought that each one was going to be a tough year retailer stock with each one is going to be not.

Speaker Change #270: Not as much around consumers with just around back that they needed to work.

Jan: We have seen.

Jan: <unk> slowdown from the luxury segment as well as cosmetics.

Speaker Change #271: And we set ourselves up.

Jan: However, I mean in our industry supports the industry.

Speaker Change #271: And as we cleaned up inventory.

Speaker Change #272: We made sure that we have premium products available to be able to service.

I think the trend.

Jan: Moving to a very positive.

Speaker Change #273: The replenish organs.

Jan: The erection.

Speaker Change #274: Going into 2024, so three months later, where do we see it three months later, we are actually seeing that we are on strategy.

Jan: More and more consumers.

Jan: They viewed it.

Jan: It is the most important matter of India lifestyles, so basically yes.

Speaker Change #275: There are indications that would suggest that our expectations coming into 2024, where we're off a big factor.

Jan: Consumers.

Jan: Participate.

Jan: Sports is a very high level and especially for outdoor activities.

Jan: So this gives us a very strong.

Speaker Change #276: I think about the cadence.

Speaker Change #276: Q1.

Jan: Background to basically to grow our base appreciate for that.

Speaker Change #276: Q1 was actually on par with our expectations.

Look at how we exited Q1.

Speaker Change: Carrington Saddam them both.

Speaker Change: Really positioned in a very unique premium segment in China.

Speaker Change #277: We're starting to see some pickup in velocity we're excited.

So you can think about.

Speaker Change: Markets and.

Speaker Change #278: Baseball, where we lead the category, we're excited about both our gloves and our.

Speaker Change: Okay.

Speaker Change: The tariffs really taking on leadership low in China in Chinese overall Chinese auto segment this segment, which.

Speaker Change #279: And our bat launches that we have later in the season, we're excited about some of the things that wasn't in our plan. So the Caitlin.

Speaker Change: Basically it's performing.

Speaker Change #280: Basketball or something.

Speaker Change: This moment and.

Speaker Change #281: It's not part of our plan, our blade racket and regaining the number one position.

Speaker Change: Likewise.

Speaker Change: <unk> also in China.

Speaker Change: <unk> also created a new fast Stephen based on the.

Speaker Change #282: Sell through there. So we continue to be excited about.

Speaker Change: Great introduction about our sports footwear business in China market.

Speaker Change #283: What we expected coming into 2024 and as we've moved through the first quarter of 2024 like we built in.

Speaker Change: Yes.

Speaker Change: I'm not sure I would say the market is.

Speaker Change #284: All of the things that we can control in our plan and we felt with the risks associated with the macro environment.

Getting more challenging.

Speaker Change: Given the overall.

Speaker Change: Economic development and.

Speaker Change #285: <unk> been a surprise to us through the end of Q1.

Our segment is still very promising and.

Speaker Change #285: Hey.

Speaker Change #285: Stuart on the wholesale question I would say stepping back.

Speaker Change: And we see more and more consumers like to spend the money.

Speaker Change #286: And we have a new focus on wholesale.

Speaker Change: Both activity and especially on the <unk>.

Speaker Change #287: After several years of building, our DTC strategy Youll see CDC.

Speaker Change: Activities. So the team here I'm going to steal Scott.

Speaker Change #288: The primary engine.

Speaker Change: Very high level of the comprehensive continued to drive our business based on our current footprint we setup for these two major brands.

Speaker Change #289: Our channel strategy.

Speaker Change #289: Yes.

Relationships.

Speaker Change #290: Points of distribution for us on the wholesale side.

Speaker Change #291: And were created.

Speaker Change: Your next question comes from the line of Ike <unk> of Wells Fargo. Your line is open.

Speaker Change #291: And the focus there.

Speaker Change #292: And feel good about the mix of the business.

Speaker Change: Hey, good morning, everyone two questions Andrew Big picture for you just in North America, I guess, Jay hit kind of the China macro just in North America.

Speaker Change #292: I think in the first quarter, we were about 70%.

Speaker Change #293: <unk> globally.

Speaker Change #294: And the upside that we saw in the first quarter from a wholesale standpoint, really our North America region and it was related to just timing of certain deliveries.

Just what are you seeing versus three months ago.

Speaker Change: To call out by kind of income cohort or price point across the brands just kind of trying to understand its very dynamic just trying to understand if there's anything to read into there good or bad and then maybe a quick follow up for Stuart just on the wholesale number for our generics in Q1, just kind of explain what exactly drove that robust number and then why.

Speaker Change #294: Wholesale partners.

Speaker Change #294: And some revenue that we had originally planned second quarter shifting first quarter and it was just tactical moves.

More to make sure we're servicing.

Speaker Change #295: And a high quality way.

Speaker Change: We should be expecting everything what exactly what kind of growth rates should we be expecting that to moderate through the rest of the year would be great. Thank you.

Speaker Change #296: But we see a lower growth rate for wholesale over the course of this tariff is still quite healthy and well.

Speaker Change #296: Pleased with the overall mix of business that we see.

Speaker Change: Yes, So let me let me touch on North America, again, a little bit.

Speaker Change #296: Wholesale is a strategic part of our business.

Speaker Change #296: We believe it is important.

Jeff: Jeff One last question and I'll, let hand, it over to could you talk about what we're seeing.

Speaker Change #296: Okay.

Speaker Change: No we.

Speaker Change #297: Your next question comes from the line of Vista.

Speaker Change: Really it started coming out of 2023, we were definitely hearing.

BNP Paribas: <unk> <unk> of BNP Paribas Your line is open.

Vista: Good morning. Thank you very much for taking my question Andrew last quarter, you gave us very.

Speaker Change: Whispers that.

Speaker Change: I thought that <unk> was going to be a tough year retailer stock with each one is going to be here.

Speaker Change #300: Helpful guidance on.

Speaker Change: That is less around consumers, but just around the fact that they needed to work.

Speaker Change #301: Segment revenues for <unk> I think you mentioned this morning that for.

Speaker Change: Laurie.

Speaker Change: And we set ourselves up.

Speaker Change #301: For QQ.

Speaker Change: And as we cleaned up inventory.

Speaker Change #302: <unk> will lead that would make sense for the audience is there any way you can give us some kind of bridge.

<unk> made sure that we have premium products available.

Speaker Change: Service.

Speaker Change #303: <unk> III segments, and then I have a follow up question on Solomon.

Speaker Change: The replenish orders.

Speaker Change: Going into 2024, so three months later, where do we see three months later, we are actually.

Speaker Change #304: I think in our prepared remarks I talked about.

Speaker Change #305: With regard to.

Speaker Change #306: The revenue development.

Speaker Change: But we're on strategy.

Speaker Change: There are no indications that would suggest that our expectations coming into 2024.

Speaker Change #306: Our performance.

Speaker Change #307: I've seen go through.

Speaker Change #307: Low double.

Speaker Change #308: Double digit growth in the second quarter end.

Speaker Change: We're off a big factor.

Speaker Change: I think about the cadence.

Speaker Change #309: Following rapid score.

Speaker Change: Q1, okay.

Speaker Change #309: Yes.

Speaker Change: Q1 was actually on par with our expectations.

Speaker Change #309: Gotcha.

Speaker Change #309: Also.

Speaker Change #310: We talked about technical.

Speaker Change: How we exited Q1 and then <unk>.

Thanks Nicole.

Speaker Change: We're starting to see some pickup in velocity pretty excited.

Speaker Change #310: Plus 20.

Yes, sorry.

Speaker Change: When you think about.

Tom: Sorry, Tom I, just wanted to add so technical apparel overtime.

Speaker Change: Baseball, where we lead the category, we're excited about both our gloves and.

Speaker Change #312: Performing extremely well even against a difficult comparison outdoor performance and bar racket in second quarter, a much more muted performance in single digits.

Speaker Change: And our bat launches that we have later in the season, we're excited about some of the things that that wasn't in our plan. So the Caitlin Clarke.

Speaker Change #312: Okay. Thank you Andrew Thank you Omar and then as a follow up question.

Speaker Change: Basketball or something.

Speaker Change: Part of our plan, our blade racket and regaining the number one position U.

Speaker Change #312: Solomon.

Speaker Change #312: Frankly, Franco recently departed the Solomon brand James could you talk about the.

Speaker Change: Sell through there. So we continue to be excited about what we did.

Speaker Change #313: Criteria Youre looking for for a new found in leader how long do you think you expect that search process to last.

Speaker Change: Coming into 2024, and as we move through first quarter of 2024.

Speaker Change #314: What is the phone its growth trajectory going forward, particularly around footwear.

Speaker Change: We built in.

All of the things that we can control in our plan and we feel as good as the risks associated with the macro environment.

Speaker Change #314: Got it.

Speaker Change #314: Lauren.

Speaker Change #315: So you know.

Speaker Change #316: We are on the Hawaii, However search okay.

Speaker Change: Been a surprise to us.

One.

Speaker Change #317: For us the ideal candidates for Saddam branch.

Stuart: Hey, Stuart on the wholesale question I would say stepping back.

Lauren: We really like.

Stuart: And we have a new focus on wholesale.

Scott: A person Scott.

Scott: Sounds good.

Stuart: After several years of building, our DTC strategy Youll see DTC.

Speaker Change #320: Youll alone.

Speaker Change #320: <unk>.

Speaker Change #320: Okay.

Stuart: The primary engine.

Speaker Change #321: The software patents and on your side that we also like the Kennedy coming from similar industry, where we are in that segment.

Stuart: For our channel strategy.

Stuart: But we are.

Stuart: Relationships points.

Stuart: Points of distribution for us on the wholesale side.

Speaker Change #322: Eastern advantage.

Stuart: And were.

Stuart: And the focus there.

Speaker Change #322: All right.

Overall softness.

Stuart: And feel good about the mix of the business.

Speaker Change #322: And.

Stuart: I think in the first quarter, we were about 70% DTC globally.

Speaker Change #323: Obviously, the leadership a strong leadership.

Speaker Change #323: Also the criteria.

Stuart: And the upside that we saw in the first quarter from a wholesale standpoint, really our North America region and it was related to just timing of certain deliveries.

Speaker Change #324: So these are the major.

Speaker Change #325: We are finding our price the right candidates.

Speaker Change #326: So I assume we will have another one.

Speaker Change #326: Six to 12 months.

Speaker Change #326: Yes.

Stuart: Our wholesale partners.

Speaker Change #327: Finding the right candidate.

Stuart: And some revenue that we had originally planned second quarter shifting first quarter and it was.

Speaker Change #327: Uh huh.

Speaker Change #328: For the for the brands and the in terms of the.

Stuart: Just a tactical move.

Speaker Change #329: The overall growth trajectory for the business.

Stuart: More to make sure their services.

Stuart: At a high quality way.

Speaker Change #330: So obviously, we will continue to see accomplished strategy.

Stuart: But we see a lower growth rate for wholesale over the course of the tariff is still quite healthy.

Speaker Change #331: We give to you guys at the beginning of the year so basically.

Stuart: We're pleased with the overall mix of business that we see wholesale as a strategic part of our business.

Speaker Change #332: Footwear will be a key growth engine for us given the successful story, we filled up.

Speaker Change: Is that the leases.

Speaker Change: Gordon.

Speaker Change: Sure.

Speaker Change #333: China and the APAC, we really believe we have.

Speaker Change: Your next question comes from the line of.

Speaker Change #334: Very strong.

Speaker Change: <unk> <unk> of BNP Paribas Your line is open.

Speaker Change #334: Our franchise.

Speaker Change #335: In the market to adjust the needs from the cross border.

Good morning. Thank you very much for taking my question Andrew last quarter, you gave us very.

Speaker Change #336: We are positioning the brand as a modern although livestock line and so I know, we've also created a new category for us.

Speaker Change: Helpful guidance on.

Speaker Change: Segment revenues for <unk> I think you mentioned this morning that for.

Speaker Change #337: Although sneakers.

Speaker Change: <unk> <unk>.

Driven mainly by the sports franchise.

Speaker Change: <unk> will lead that would make sense for.

Speaker Change #337: Franchise.

Speaker Change: The audience is there any way you can give us some kind of bridge across the three segments and then I have a follow up question on Solomon.

Speaker Change #337: I think that path will really be with us.

Speaker Change #337: To grow our business.

Speaker Change #338: Both Europe and North America. So we are on the way too.

Speaker Change: I think our prepared remarks, I talked about with regard to.

Speaker Change #339: To really drive this we just opened.

Speaker Change #340: New salamone footwear inspired.

Speaker Change: Yeah.

Speaker Change: The revenue development.

Speaker Change #341: Footwear inspired shop in La <unk>, which is a main commercial state.

<unk> performance.

Speaker Change: I single too.

Speaker Change: Low double.

Speaker Change #342: Paris commercial.

Speaker Change: Double digit growth in the second quarter end.

Speaker Change #343: Areas and what have.

Speaker Change: Following rapid score.

Speaker Change #344: How do you square meters and.

Speaker Change #345: In the first two weeks sales really out of our top five expectation.

Speaker Change: Got it.

Speaker Change: Awesome.

Speaker Change: Also.

Speaker Change: We've talked about technical.

Speaker Change #346: Clearly demonstrate our.

Speaker Change: Thanks Nicole.

Speaker Change #347: New product lines through the adjusted EPS.

Speaker Change: Plus 20.

Speaker Change #348: And the market besides our.

Speaker Change: Yes, sorry.

Speaker Change: Yes.

Speaker Change #348: Holiday.

Speaker Change: Alright, I just want to add so technical apparel over.

Speaker Change #348: Diabetes.

Speaker Change: Still performing extremely well even against the difficult comparison outdoor performance and bar rack in the second quarter, a much more muted performance in single digits, yes.

Speaker Change #348: But.

Fair enough.

Speaker Change #349: Although professional technical outdoor segment, okay. So.

Speaker Change #350: <unk> is kind of a strategy can.

Speaker Change: Okay. Thank you Andrew Thank you Omar and then as a follow up question.

Speaker Change #351: Products can really drive us to have a higher growth for our <unk> system.

Speaker Change: Solomon.

Speaker Change: No Frank Franco recently departed the Solomon brand James could you talk about the.

Speaker Change: Criteria Youre looking for for a new found in leader how long do you think you expect that search process to last.

Speaker Change #352: Your next question comes from the line.

Speaker Change #352: Michael Binetti of Evercore ISI your line is open.

Speaker Change: What is the phone its growth trajectory going forward, particularly around footwear.

Speaker Change #353: Thanks for all the detail here today appreciate it.

Michael Binetti: I just want to ask one preliminary one before I ask my questions. I think your audio is breaking up a little bit. So we had trouble hearing the growth rates by segment that you gave the audio actually broke out if you wouldn't mind just restating the three segments for <unk>.

Speaker Change: Got it.

Speaker Change: Lauren.

So you know.

Speaker Change: We are on the Hawaii, However search okay.

Speaker Change: For us the ideal candidates for solid among brands.

Speaker Change #355: My question would be.

Speaker Change: We really like.

Speaker Change #356: I guess, just maybe go back to a question you spoke a little bit earlier Andrew.

Speaker Change: A person Scott.

Speaker Change: Sounds good.

Speaker Change #357: I'd be interested to know the trajectory.

Speaker Change: Hum Yawn alone.

Speaker Change #358: Our wholesale through the year, particularly for.

Speaker Change: <unk>.

Speaker Change: Okay.

Speaker Change #359: Solomon of outdoor and then I guess, Paul in racket seems to be holding back the revenue growth rate a little bit in the first quarter you are speaking to sellout improving.

Speaker Change: These are patents and on your side that we also like the Kennedy coming from the similar industry segment.

Speaker Change: Segment.

Speaker Change #360: Maybe on what growth looks like.

Speaker Change: So decent mcdonalds.

Speaker Change #361: I guess I guess sorry.

Speaker Change: How to Orion.

Speaker Change: Overall softness.

Speaker Change #361: Wholesale revenue.

Speaker Change: And.

Speaker Change #362: Looks like with when do when Ken when can the growth rate of revenue.

Speaker Change: Obviously, the leadership a strong leadership.

Speaker Change #362: Start.

Start to improve and look like more like DTC in those two segments and then I think Americas was guided to mid teens growth in 2024, I'm curious if there's any change to that given where first quarter came in.

Speaker Change: Also the <unk> criteria.

Speaker Change: So these are major.

Speaker Change: We are raising our prices are different.

<unk> candidates, so I assume we will.

Speaker Change: Under six to 12 months plus.

Omar Saad: Hey, Michael It's Omar just to kind of clarify so we're not giving quarterly youre not going to provide quarterly detailed segment guidance just update the annual but more of a rank order. So obviously technical apparel, leading the growth in the second quarter and for the full year it'd followed by outdoor performance and bond racket.

Speaker Change: Finding the right candidate.

Speaker Change: Uh huh.

Speaker Change: For the for the brand.

Speaker Change: In terms of.

Speaker Change: The overall growth trajectory.

Speaker Change: For our business.

Speaker Change: So obviously so.

Speaker Change: We will continue to become a strategy.

Omar Saad: I would say single digits for the second two outdoor performance of <unk> in the second quarter is probably the right way to think about it.

Speaker Change: Give to you guys.

Speaker Change: Beginning of the year so basically.

Speaker Change: Footwear will be a key growth engine.

Omar Saad: In terms of your other comment around mid teens Americas growth that was an a and it must have been a miscommunication that's not guidance that we've provided.

Speaker Change: So given those successful story, we filled up both China and the APAC, we really believe we have.

Omar Saad: Yeah.

Speaker Change #363: Any thoughts on the wholesale question.

Speaker Change: A very strong.

Speaker Change: Footwear franchise in the market to adjust.

Andrew: Yes, Andrew.

Speaker Change #365: You can talk about kind of what weapons.

Speaker Change: Needs from the cross border.

Andrew: Yes trajectory through wholesale how does it build throughout the year Boston racquet for softer performance.

Speaker Change: We repositioned the brand as a modern although livestock line.

Speaker Change #366: From <unk>.

Andrew: With respect this trajectory throughout the year as we've talked about wholesale in Q1.

I know, we've also created a new category.

Speaker Change: Although sneakers.

Speaker Change: Driven mainly by the slow start.

Speaker Change #367: Going to be by far our toughest comps Q2 will continue to be.

Speaker Change: Franchise.

Speaker Change: I think that path.

Speaker Change #367: A bit tougher, but we definitely expect.

Speaker Change: A few of those.

Speaker Change: To grow our business.

Speaker Change #368: Keeping guidance.

Speaker Change: Both Europe and the North America.

Speaker Change #369: The trajectory to accelerate especially as we exit Q2, and then Q3 and Q4.

Speaker Change: Way too.

Speaker Change: To really drive that we just opened the new solid loan footwear inspired footwear.

Speaker Change #369: Correct.

Speaker Change #369: Meaningful.

Speaker Change: Footwear is flat shop in <unk>, which is a main commercial state.

Speaker Change #369: <unk>.

Speaker Change #370: That's our strongest quarter.

Speaker Change #370: Hi, Bob Brackett Similarly with regard to.

Speaker Change: I'll start.

Speaker Change: Paris commercial.

Speaker Change: Areas and with <unk>.

Bob Brackett: Outdoor performance, we expect a similar trajectory back half weighted.

Speaker Change: I guess square meters.

Speaker Change: In the first two weeks sales really out of our top five expectation.

Bob Brackett: Yes, primarily in the different regions.

Speaker Change: Clearly demonstrate our.

Speaker Change #372: <unk> fallen racket.

Speaker Change: New product lines through the adjusted <unk>.

Speaker Change #373: All of this and all of the cleanup that I talked about last year from an inventory perspective outdoor performance you get into benefit.

Speaker Change: In the market besides our.

Speaker Change: Holiday.

Speaker Change: <unk>.

Speaker Change #373: You remember last year.

Speaker Change: But.

Speaker Change #374: Added about 97.

Speaker Change: Kind of.

Speaker Change: Although professional technical outdoor segment. Okay. So so we really believe is kind of a strategy can the products can really drive us.

Speaker Change #380: <unk> in greater China, some of which were also related to the partner stores is captured in wholesale so you get the full year benefit of that.

Speaker Change #374: Also adding additional doors.

However, higher growth for our footwear, we see them.

Speaker Change #377: In greater China, So we expect an acceleration.

Speaker Change #381: As it relates to our wholesale accounts.

Speaker Change: Your next question comes from the line of Michael Binetti of Evercore ISI. Your line is open.

Paul: Paul again.

Speaker Change #379: Again easier comps are falling rapidly.

Speaker Change: Hey, guys. Thanks for all the detail here today appreciate it.

Paul: Sure.

Harlan: Thanks Harlan.

Michael Binetti: I just want to ask one preliminary one before I ask my question is I think your audio is breaking up a little bit. So we had trouble hearing the growth rates by segment that you gave your audio actually broke out if you wouldn't mind just restating the three segments for <unk>.

Speaker Change #374: Operator, unfortunate I think thats, all we have time for Jill.

Operator: Understood due to lots of time for further questions. This concludes the Q&A session.

Operator: I'll now turn the conference back over to Omar for closing remarks.

Michael Binetti: My question would be.

Omar Saad: Thanks, Jill and thanks, everyone for joining we look forward to reconnecting with you on our second quarter earnings call in approximately 90 days.

Speaker Change: I guess, just maybe go back to a question you spoke on it a little bit earlier, Andrew I'd.

Speaker Change: I'd be interested to know the trajectory.

Speaker Change #378: This concludes today's conference call you may now.

Speaker Change: Wholesale through the year, particularly for.

Speaker Change: Solomon outdoor and then I guess, Paul in racket seems to be holding back the revenue growth rate a little bit in the first quarter Youre speaking to sellout improving.

Speaker Change: Maybe on what sell out growth looks like.

Speaker Change: I guess I guess higher.

Speaker Change: Wholesale revenue.

Speaker Change: Like when do when Ken when can the growth rate of revenue.

Start to improve and look like more like DTC in those two segments and then I think Americas was guided to mid teens growth in 2024, I'm curious if there's any change to that given where first quarter came in.

Omar: Hey, Michael It's Omar just to kind of clarify so we're not giving quarterly youre not going to provide quarterly detailed segment guidance just update the annual but more of a rank order. So obviously technical apparel, leading the growth in the second quarter and for the full year it'd followed by outdoor performance and bond racket.

Speaker Change: Say single digits for the second two outdoor performance of <unk> in the second quarter is probably the right way to think about it.

Speaker Change: In terms of your other comment around mid teens Americas growth that wasn't a and it must have been a miscommunication that's not guidance that we provided.

Speaker Change: Yeah.

Speaker Change: Any thoughts on the wholesale question.

Andrew: Yes, Andrew.

Speaker Change: And talking about kind of a hole.

Andrew: Yes trajectory through wholesale how does it build throughout the year, Boston Racquet bears out the performance.

Andrew: From a bottling perspective trajectory throughout the year.

Andrew: As we've talked about wholesale in Q1.

Andrew: To be by far our toughest comps Q2 will continue to be.

Andrew: A bit tougher, but we definitely expect.

Andrew: We've given guidance that we expect.

Andrew: The trajectory to accelerate especially as you exit Q2 and into Q3 and Q4.

Speaker Change: Thank you.

Speaker Change: Meaningful.

Speaker Change: Our strongest quarter.

Speaker Change: Okay, Bob Brackett, Similarly, with regard to <unk>.

Speaker Change: Outdoor performance, we expect a similar trajectory back half weighted.

Speaker Change: Yes, primarily in the different regions.

Speaker Change: Fallen racket.

Speaker Change: All of this and all of the cleanup that I talked about last year from inventory perspective outdoor performance to get into benefit.

Speaker Change: Remember last year.

Speaker Change: Added about 97.

Speaker Change: Stores in greater China, some of which were also related to score the partner stores is captured in wholesale so you get the full year benefit.

Speaker Change: And we're also adding additional doors.

Speaker Change: In greater China. This year. So we expect an acceleration is.

Speaker Change: As it relates to our wholesale accounts.

Speaker Change: Performance.

Speaker Change: Again easier comparable in the Rockies.

Speaker Change: Sure.

Speaker Change: Thanks Harlan.

Speaker Change: Operator, unfortunate I think thats, all we have time for Jill.

Speaker Change: Understood due to lots of time for further questions. This concludes the Q&A session.

Omar: I will turn the conference back over to Omar for closing remarks.

Omar: Thanks, Jill and thanks, everyone for joining we look forward to reconnecting with you on our second quarter earnings call in approximately 90 days.

Speaker Change: This concludes today's conference call you may now disconnect.

Speaker Change: Yeah.

Speaker Change:

Speaker Change: Yeah.

Speaker Change: Yeah.