Q1 2025 On Holding AG Earnings Call

Speaker Change: [music].

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Unknown Executive: Hello, and thank you for standing by.

Tiffany: Hello, and thank you for standing by my name is Tiffany and I will be your conference operator today at this time I would like to welcome everyone should be on holding a G Q1, 'twenty twenty-five results conference call. All lines have been placed on mute to prevent any background noise.

Tiffany: My name is Tiffany, and I will be your conference operator today. At this time, I would like to welcome everyone to the On Hldg AG Q1 2025 Results Conference Call.

Tiffany: All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during that time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, press star one again. Thank you.

Jay: After the Speakers' remarks, there will be a question and answer session. If you'd like to ask a question during that time simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question Press Star. One again. Thank you I would now like to turn the call over to Jay.

Jerrit Peter: I would now like to turn the call over to Jerrit Peter, Head of Investor Relations. Please go ahead. Good afternoon. Good morning to our investor community.

Speaker Change: Erik Peter head of Investor Relations. Please go ahead.

Speaker Change: And good morning to our Investor community. Thank you for joining on 2025 first quarter earnings conference call and webcast with.

Jerrit Peter: Thank you for joining on 2025 First Quarter Earnings Conference Call and Web.

Jerrit Peter: With me today on the call are Owens Executive Co-Chairman and Co-Founder Caspar Coppetti and CFO and Co-CEO Martin Hoffmann.

Speaker Change: With me today on the call or on executive co Chairman and co founder Tesla.

Marc Hoffman: And CFO and co CEO Marc Hoffman.

Jerrit Peter: Before we begin, I'll briefly remind everyone that today's call will contain forward-looking statements within the meaning of the Federal Security Department. Thank you. These forward-looking statements reflect our current expectations and beliefs only and are subject to certain risks and uncertainties that could cause actual results to differ much .

Marc Hoffman: Before we begin I'll briefly remind everyone that today's call will contain forward looking statements within the meaning of the federal securities laws.

Marc Hoffman: These forward looking statements reflect our current expectations and beliefs, only and are subject to certain risks and uncertainties that could cause actual results to differ materially.

Marc Hoffman: Please refer to our 20-F filed with the FCC on March 4th well, a detailed discussion of such risks and uncertainties.

Jerrit Peter: Please refer to our 20th File with the SEC on March 4th for a detailed discussion of such risks and uncertainties.

Jerrit Peter: We will further reference certain non-IFRS financial measures, such as adjusted EBITDA and adjusted EBITDA margin. These measures are not intended to be considered in isolation or as a substitute for the financial information presented in accordance with IFP.

Marc Hoffman: We will further reference certain non <unk> financial measures such as adjusted EBITDA and adjusted EBITDA margin.

Marc Hoffman: These measures are not intended to be considered in isolation or as a substitute for the financial information presented in accordance with high for us.

Marc Hoffman: Please refer to today's release for reconciliation to the most comparable measures.

Jerrit Peter: Please refer to today's release for a reconciliation to the most comparable IFRS.

Marc Hoffman: We will begin with Tesla followed by March and bleeding through today's prepared remarks, after which we're looking forward to opening the call for a Q&A session.

Jerrit Peter: We will begin with Caspar, followed by Martin, leading through today's prepared remarks, after which we're looking forward to opening the call for a Q&A.

Marc Hoffman: Before I hand, it over allow me to close the introduction on a personal note.

Jerrit Peter: Before I hand it over, allow me to close the introduction on a personal note.

Jerrit Peter: I'm very excited to announce that I will be taking on a new role within OWN following this quarterly cycle, and therefore today will mark my last earnings for this year. It has been an incredible privilege and honor to represent ON to our research and investor community over the past years, and I hope many of our paths cross again. Thank you so much for all your trust.

Speaker Change: I'm very excited to announce that I will be taking on a new role within one following this quarterly cycle and therefore today will mark my last any falling capacity it has.

Marc Hoffman: It's been an incredible privilege and honor to represent onto Arete research and investor community over the past years and I hope many of our paths cross again in the future. Thank.

Speaker Change: Thank you so much for all your trust and support.

Caspar Coppetti: With that, I'm now happy to turn over the calls to Caspar. Thank you and welcome everyone to our first quarter 2025 earnings call. We're excited to have kicked off the year with continued exceptional brand momentum, clearly reflected in the numbers we're presenting today. Net sales exceeded 725 million Swiss francs, reflecting a year over year growth of 40% on a constant currency. The strength of our direct-to-consumer business and its increased share resulted in an increased gross profit margin of 59.9%. We are proud to see our focus on premium execution and operational efficiency result in an even higher margin expansion on the adjusted EBITDA line, reaching 16.5% in the quarter.

Speaker Change: With that I'm now happy to turn over the call Tesla.

Speaker Change: Thank you and welcome everyone to our first quarter 2025 earnings call. We're excited to have kicked off the year with continued exceptional brand momentum clearly reflected in the numbers we're presenting today.

Speaker Change: Net sales exceeded 725 million Swiss francs, reflecting a year over year growth of 40% on a constant currency basis, the strength of our direct to consumer business and its increased chair resulted in an increased gross profit margin of 59, 9%.

Speaker Change: We are proud to see our focus on premium execution and operational efficiency result in an even higher margin expansion on the adjusted EBITDA line, reaching 67, 5% in the quarter.

Speaker Change: The results speak for themselves demand for on remains incredibly strong.

Caspar Coppetti: The results speak for themselves. Demand for ON remains incredibly strong. Our brand promise to ignite the human spirit through movement, along with ON's positioning as the most premium global sportswear brand in the marketplace, are resonating with our allowing us to capture market share and drive on success. We are committed to this premium brand and product promise and see it as a differentiator in ourselves.

Speaker Change: Our brand promise to ignite the human spirit through movement, along with Ards positioning as the most premium global sportswear brand in the marketplace are resonating with our fans.

Speaker Change: Allowing us to capture market share and drive <unk> success.

Speaker Change: We are committed to this premium brand and product promise and see it as a differentiator in our space.

Caspar Coppetti: And we are confident that it provides us with the tools to navigate the uncertainty that comes with operating a global business and supply chain in the current environment and beyond.

Speaker Change: And we are confident that it provides us with the tools to navigate the uncertainty that comes with operating a global business and supply chain in the current environment and beyond.

Caspar Coppetti: Martin will elaborate further on this later on. You can rest assured that all decisions we are taking are first and foremost a reflection of our long-term strategy and brand. Setting ourselves up for continued success in the future as the most premium global sports server. Beyond our financial results in the first quarter, we have seen this vision come to life over We're rapidly expanding brand awareness and reaching new audiences through innovative products, strategic partnerships, and culture moments that resonate deep. Earlier in the quarter, the concept of soft wins took center stage with Allemann and Roger Federer generating significant buzz around the on-brand and ripple effect across social and traditional media alike.

Speaker Change: March and Bill elaborate further on this later on this call.

Speaker Change: You can rest assured that all decisions. We are taking are first and foremost a reflection of our long term strategy and brand position setting.

Speaker Change: Setting ourselves up for continued success in the future as the most premium global sportswear brand.

Speaker Change: Beyond our financial results in the first quarter, we have seen this vision come to life or recent months.

Speaker Change: We're rapidly expanding brand awareness and reaching new audiences through innovative products strategic partnerships and culture moments that resonate deeply.

Speaker Change: Early in the quarter the concept of soft wins took center stage with element drugs that are generating significant bumps around the on brand a ripple effect across social and traditional media like.

Caspar Coppetti: This momentum continued into a larger SoftWinds running campaign with the new CloudSurfer 2 at the forefront. The second generation of one of our most beloved models has already gained strong global traction. cementing its position as a key running franchise in our portfolio.

Speaker Change: This momentum continued into a larger software and it's running campaign with the new cloud surfer too at the forefront.

Speaker Change: Second generation one of our most aloft bottle has already gained strong global traction.

Speaker Change: One thing its position as a key Ronnie franchise in our portfolio.

Speaker Change: Among other new launches in the quarter a true highlight for me personally was certainly the launch of the cloud six.

Caspar Coppetti: Among other new launches in the quarter, a true highlight for me personally was certainly the launch of the cloud. As on the largest product launch ever, we're thrilled to see the cloud once again tying us closer with existing customers while also reaching new audiences or discovering it for the first time. After a few years of focus on diversifying our product portfolio, the whole ON team has been patiently waiting for this opportunity to ignite our icon with renewed energy and once again share the story of the cloud with the world. The cloud also serves as a strong example of how we continuously refine and elevate new launches to deliver more premium products.

Speaker Change: <unk> largest product launch ever we're thrilled to see the cloud once again timeless closer with existing customers, while also reaching new audiences or discovering it for the first time.

Speaker Change: After a few years of focus on diversifying our product portfolio. The whole on team has been patiently waiting for this opportunity to ignite our icon with renewed energy and once again shared a story of the cloud with civil.

Speaker Change: The cloud also serves as a strong example of how we continuously refine and elevate new launches to deliver more premium product introduced at a price point above its predecessor, the cloud six reflects how our premium positioning enables pricing power without compromising consumer.

Caspar Coppetti: Introduced at a price point above its predecessor, the Cloud 6 reflects how our preview positioning enables pricing power without compromising consumer demand. Beyond consistent and continuous product innovations, authentic partnerships are key to growing ON's cultural relevance.

Speaker Change: Demand.

Speaker Change: Beyond consistent and continuous product innovations authentic partnerships are key to growing <unk> cultural relevance in April we introduced our latest move in livestock compete with Cynthia.

Caspar Coppetti: In April, we introduced our latest Movement Lifestyle campaign with Zendaya. The fictional film trailer, set in space, reflects On's continued commitment to pushing the boundaries of visual storytelling and cultural connection. The campaign highlights key products from our spring summer. including On Hldg's new low-profile model, the Cloud Zone. Designed for consumers seeking a refined lifestyle. Even more importantly, the campaign reinforces our focus to build on from the feet up by introducing our fans to ON's apparel and accessories.

Speaker Change: The fictional film trailer set in space reflects our continued commitment to pushing the boundaries of visual storytelling and cultural connection.

Speaker Change: The campaign highlights key products from our spring summer collection, including on sleek, new low profile Basel the cloud zone.

Speaker Change: Designed for consumers seeking a refined lifestyle look.

Speaker Change: Even more importantly, the campaign it reinforces our focus to build on from the feet up by introducing our fans two arms apparel and accessories.

Caspar Coppetti: at every touch.

Speaker Change: At every touch point.

Speaker Change: Ahead of any impact from Ards most recent campaign.

Caspar Coppetti: Ahead of any impact from ON's most recent campaign, we have continued to observe the meaningful acceleration within our apparel business, with net sales almost doubling during the first three months of the year. While our product franchises continue to fuel strong commercial momentum, we believe transformational innovations like Lightspray will truly allow ON to provide a differentiated offering and define the future of sports. 2025 will be a key year for testing and optimizing this technology as we lay the foundation for global scalability in the future. At the same time, pop-ups in key global locations such as Boston, Durham, Marathon, are already bringing this innovation closer to runners and fans of the on-board.

Speaker Change: We've continued to observe the meaningful exploration was in our apparel business with net sales almost doubling during the first three months of the year.

Speaker Change: While our product franchises continue to fuel strong commercial momentum.

Speaker Change: Believe transformational innovations like light spray will truly allow on to provide a differentiated offering and define the future of sportswear.

Speaker Change: 2025, it will be a key year for testing and optimizing this technology as you lay the foundation for global scalability in the future.

Speaker Change: At the same time pop ups in key global locations, such as Boston jewelry Medicine, we are already bringing disintegration close to runners and fans of the brand.

Caspar Coppetti: Behold, some of you had the chance to try the Cloud Foam Strike Light Spray at our Boston pop-up. Looking ahead to later in the year, we're continuing our global tour to further connect innovation with our core community. Engaging directly with runners in cities like Berlin, Zurich and Tokyo during the World Athletics Championships. Lightspray represents a radical shift in materials, automation, supply chain, and production.

Speaker Change: We hope some of you had the chance to try the classroom strike lifestyle at our Boston pop up.

Speaker Change: Looking ahead to later in the year for continued narrow global tour to further connect innovation without core communities.

Speaker Change: Engaging directly with runners in cities like Berlin, Missouri, and told you during that rural aesthetics Championships.

Speaker Change: Light spray represents a radical shift in materials automation supply chain and production.

Caspar Coppetti: as well as Steps Towards Circular. And we're incredibly honored to have been recognized by Fast Company as the number one most innovative company in the design category with this groundbreaking technology. We are now laser focused on unlocking its full potential.

Speaker Change: As well as steps towards circularity.

Speaker Change: We're incredibly honored to have been recognized by fast company as the number one most innovative company in the design category with this groundbreaking technology.

Speaker Change: We are now laser focused on unlocking its full potential.

Speaker Change: That's why we're actively building a future facing team.

Caspar Coppetti: That's why we're actively building a future-facing team, hiring computational engineers, robotics specialists, and plant engineers to support this next I've had the privilege to personally visit some of the production sites that we are currently exploring. And it became apparent that what we are setting up is quite literally the future. Clean, efficient, and fully automated manufacturing combined with high-side flexibility. A step change for the industry and for ON, a major leap toward a more resilient and locally diverse supply chain. Valide spray is undoubtedly a key part of the future. Our relentless focus on innovation and excellence across our operations and supply chain remains central to our vision.

Speaker Change: Computational engineers robotic specialist and plant engineers to support its next phase.

Speaker Change: I've had the privilege to personally visit some of the production sites that we are currently exploring.

Speaker Change: And it became apparent that once we are setting up is quite literally the future clean efficient and fully automated manufacturing combined with high sides flexibility.

Speaker Change: <unk> change for the industry and for on the maitre leaf to avert a more resilient and locally diverse supply chain.

Speaker Change: Yeah.

Speaker Change: <unk> undoubtedly a key part of the future.

Speaker Change: Our relentless focus on innovation and excellence across our operations and supply chain remains central to our vision.

Caspar Coppetti: The numbers that we are sharing today reflect 12 to 18 months of focused execution. Driven by improved capabilities in planning, production, supply chain, and order management. We have also added strength in key leadership roles and deepened in-house capabilities to support long-term scalability. Together, these efforts are enabling us to do a much better job at having the right product at the right place at the right time.

Speaker Change: The numbers that we're sharing today reflect 12 to 18 months of focus execution.

Speaker Change: Driven by improved capabilities in planning production supply chain and order management. We have also added strength in key leadership roles and deepened in house capabilities to support long term scalability.

Speaker Change: Whether these efforts are enabling us to do a much better job and having the right product at the right place at the right time.

Finally, I want to take a moment to reflect on the recent leadership evolution, we announced a few weeks ago.

Caspar Coppetti: Finally, I want to take a moment to reflect on the recent leadership evolution we announced a few weeks ago. On behalf of the board, I want to sincerely thank Marc for his incredible leadership over the past 12 years. Marc, your dedication, vision and passion have left an unforgettable mark on us.

Speaker Change: On behalf of the board I want to sincerely. Thank mark for his incredible leadership over the past 12 years, Mark your dedication vision and passion as left an unforgettable mark going on.

Caspar Coppetti: And we're all better for having walked, or precisely. for having run this past Marc will continue as co-CEO through the end of June and then transition into an advisory role to the board.

Speaker Change: And we're all better for having walked precisely.

Speaker Change: For having run this past with you Mark will continue with <unk> through the end of June and then transition into an advisory role to the board.

Caspar Coppetti: Looking ahead, we're fortunate to have Martin stepping into the role of Seoul Chief Executive Officer from July 1st. The board has full confidence in Martin's ability to serve as CEO and lead on, together with us founders, as the incredible on.

Speaker Change: Looking ahead, we're fortunate to have maarten stepping into the role of sole Chief Executive officer from <unk>.

Speaker Change: The board has full confidence in Martin's ability to serve as CEO at lead on together with US founders SD incredible on team together, we will continue to deliver on strategy of sustained growth and profitability, while continuing to foster a strong culture that makes every on off is such a unique and inspiring place.

Caspar Coppetti: Together, we will continue to deliver ON's strategy of sustained growth and profitability, while continuing to foster the strong culture that makes every ON office such a unique and inspiring place to step in every day.

Speaker Change: I stepped in everyday.

On a separate note. We're looking forward to next week's annual shareholder meeting, where Helena <unk> standing for election to our board.

Caspar Coppetti: On a separate note, we're looking forward to next week's annual shareholder meeting where Helena Helmerson is standing for election to our board. Helena brings extensive experience from her leadership at H&M and her expertise in operations and retail will be incredibly valuable as we scale. We appreciate your support for her and the other proposals put forward by the board.

Speaker Change: <unk> brings extensive experience from her leadership at H N M and her expertise in operations and retail will be incredible valuable as we scale.

Martin: We appreciate your support for her and you're at a proposal put forward by the board with that over to you Martin.

Marc Maurer: With that, over to you, Marc. Thank you, Caspar. And hello, everyone.

Martin: Thank you Kasper and Hello, everyone.

Marc Maurer: It goes without saying that having had the opportunity to share the CEO role with one of my closest friends over the past years has been the experience Marc, thank you for making this the most unforgettable journey, and thank you for the countless exciting, challenging, fun, and inspiring moments. For us and for all, it marks the end of an amazing journey. And it marks the beginning of a new one, one that I'm incredibly excited and grateful for.

Speaker Change: It goes without saying that having had the opportunity to share the CEO role with one of my closest friends over the past years has been the experience of a lifetime.

Speaker Change: Mark Thank you for making this the most unforgettable journey and thank you for the countless exciting challenging fun and inspiring moments throughout the years.

Speaker Change: For us and for all it marks the end of an amazing chip there.

Speaker Change: And it marks the beginning of a new one one that I'm incredibly excited and grateful for.

Marc Maurer: I am extremely honored to take on the next chapter of this journey, together with my partners and the rest of the online community. A few weeks ago, our full team came together to celebrate ON's 15-year anniversary at our global conference. It was one of the most powerful moments I have ever experienced. Global Summit isn't just our key annual commercial event. That's where our future takes flight. It's where we ignite the collective ambition of our global teams and partners for 2020. Aligning us on a shared strategic vision and bringing the soul of our brand and the innovation of our products to life.

Speaker Change: I'm extremely honored to take on the next chapter of this journey together with my partners and the rest of the <unk> team.

Speaker Change: A few weeks ago, our full team came together to celebrate ons 15 year anniversary at our club at summit.

Speaker Change: It was one of the most powerful moments I have ever experienced at all.

Speaker Change: The global Summit isn't just our key annual commercial event.

It's where our future takes flight.

Speaker Change: It's very economically collective ambition of our global teams and partners for 2026.

Speaker Change: Aligning us on a shared strategic vision and bringing the soul of our brand and the innovation of our product to life.

Marc Maurer: Here, we don't just preview futures. We provide our markets with the inspiration and tools to execute with unparalleled Building the commercial energy that will propel the. Beyond the Pith This summit is a powerful testament to our community. Celebrating ON's 15th anniversary reminded us that these moments of connection are at the heart of our It's in these vibrant gatherings that our unique culture shines bright. fueling our inspiration and celebrating the very essential. This shared energy and profound connection to our mission to ignite the human spirits from movement. It's the unwavering force that guides us.

Speaker Change: Here.

Speaker Change: We don't just preview of future Assortments, we provide our markets was the inspiration and tools to execute with unparalleled excellence built.

Speaker Change: Building the commercial energy that were propels us forward.

Speaker Change: Beyond the business. The summit is a powerful testament to our team.

Speaker Change: Celebrating <unk> 15th anniversary reminded us that these moments of connection are at the heart of our success.

Speaker Change: It's in this widespread gatherings that our unique culture shines brightest.

Speaker Change: Fueling our inspiration and set of Prady to various sensor phone.

Speaker Change: This shed energy and profound connection to our mission to ignite the human spirit from movement is the unwavering forest it guides us.

Marc Maurer: As we continue to evolve and reach Thank you, team, for making this a once-in-a-lifetime.

Speaker Change: As we continue to evolve and reach new Heights.

Speaker Change: Thank you team for making this a once in a lifetime moment.

Speaker Change: As Kasper highlighted 2025 is off to an incredible exciting start.

Marc Maurer: As Caspar highlighted, 2025 is off to an incredibly exciting We have launched the year with a powerful wave of new products. Print Campaigns Across Running, Lifestyle and Not to mention our full apparel line, which is continuing its impressive climb in market share across all regions. We've introduced successful updates that bring fresh energy to some of our most important including the Cloud Surfer 2 and the Cloud Surfer 3. And of course, the entirely new cloud. In the coming months, we're excited to deliver even more newness to the running community. highlighted by pinnacle innovation in our CloudBoom franchise and renewed energy and focus with launches in the high-performance trail running.

Speaker Change: We've launched a year with a powerful wave of new products and print campaigns across running lifestyle tenants not to mention our full apparel line, which is continuing its impressive climb in market share across all regions and channels.

Speaker Change: We've introduced successful updates that bring fresh and achieve to some of our most important franchises, including the clouds, if it too and the cloud six.

Speaker Change: And of course, the entirely new cloud zone.

Speaker Change: In the coming months, we're excited to deliver even more newness to the running community hi.

Speaker Change: Highlighted by Pinnacle innovation in our cloud <unk> franchise, and renewed energy and focus with launches into high performance thread running segment.

Speaker Change: While staying true to our vision to be the most premium global sportswear brand, we understand that our growing scale demand meticulous attention to detail and a strong commitment to elevating the premium experience across every touch point.

Marc Maurer: While staying true to our vision to be the most premium global sportswear brand, we understand that our growing scale demands meticulous attention to detail. Strong Commitment to Elevating the Premium Experience Across Averages from product and merchandising to retail, customer service and operations. Every area plays a vital role in how we bring that vision to life. Over the last month, we have focused our energy on elevating our processes and capabilities across all. And we are very happy with the program.

Speaker Change: From product and merchandising to retail customer service and operations every area plays a vital role in how we bring that vision to life globally.

Speaker Change: Over the last months, we have focused our energy on elevating our processes and capabilities across all touch points and we are very happy with the progress we have made.

Marc Maurer: These efforts have laid the foundation for what we share here today. Power us to dream even bigger as we look beyond 20. We have reached net sales of 726.6 million Swiss francs. growing 43% year-over-year on a reported basis, and 40% on a constant. This marks the highest quarterly net sales in the history of the country. And it's the result of the continued strong demand that we are seeing across all. Our D2C channel has again fueled our. increasing by 45.3% year-over-year on the reported 42.4% on a constant currency. reaching net sales of 276.9 million. This growth ahead of our expectations has further resulted in an increased D2C share of 38.1% in Q1 2025, up from 37.5% in Q1 2020.

Speaker Change: These efforts have laid the foundation for what we've shared here today.

Speaker Change: Power us to dream, even bigger as we look beyond 2025.

Speaker Change: We have reached net sales of $726 6 million Swiss francs into first quarter.

Speaker Change: 43% year over year on a reported basis and 40% on a constant currency basis.

Speaker Change: This marks the highest quarterly net sales in the history of the company and its the result of the continued strong demand that we're seeing across all of our channels.

Speaker Change: R. A D to C channel has again fueled our growth increasing by 45, 3% year over year on a reported basis and 42, 4% on a constant currency basis, reaching net sales of $276 9 million Swiss francs.

Speaker Change: This growth ahead of our expectations as further resulted in an increase D to C share of 38, 1% in Q1 25 up from 37, 5% in Q1 24.

Speaker Change: Both E com and retail are contributing strongly to this result, and we are clearly seeing the synergies across the tool.

Marc Maurer: Both Ecom and retail are contributing strongly to this result, and we are clearly seeing the synergies across In EECOM, we remain very pleased with the global momentum and continued full price execution across our own website and online. From a smaller base, retail continues to showcase exceptional momentum from both new store openings and meaningful increases in existing store prices.

Speaker Change: In E. Comm, we remain very pleased with the global momentum and continued food price execution across our own website and online marketplaces.

Speaker Change: From a smaller base retail continues to showcase exceptional momentum from both new store openings and meaningful increases in existing store productivity.

Marc Maurer: The store rollout and strong growth of this channel is visible across all regions, but if I had to pick one highlight this quarter, it would be the continued strength of our Tokyo which even surpassed our Regent's Street store in London in terms of sales. Across both e-commerce and retail, we continue to invest in our tech capabilities to elevate the experience for our customers and to drive additional operations. Wholesale grew by 41.5% year over year, reaching 449.7 million Swiss francs in the first On a constant currency basis, the growth was 38%. The demand for our brand is fully reflected in strong sellout numbers of our wholesale partners.

Speaker Change: The store rollout and strong growth of this channel is visible across all regions, but if I had to pick one highlight this quarter. It would be the continued strength of our Tokyo store, which even surpassed our regent Street store in London in terms of net sales.

Speaker Change: Across both E com and retail we continue to invest in our tech capabilities to elevate the experience for our customers and to drive additional operational efficiencies.

Speaker Change: Wholesale grew by 41, 5% year over year, reaching $449 7 million Swiss francs into first quarter.

Speaker Change: On a constant currency basis, the growth was 38, 6%.

Speaker Change: The demand for our brand is fully reflected in strong sell out numbers of our wholesale partners globally.

Marc Maurer: This allows us to drive high same stock growth rates while maintaining a very controlled speed in expanding our store. Retailer demand for the new Cloud 6 franchise has been exceptionally strong worldwide. We're excited to see it once again, contributing strongly to our.

Speaker Change: This allows us to drive higher same store growth rates, while maintaining a very controlled speed in expanding our store network.

Speaker Change: Retailer demand for the new cloud six franchise X being exceptionally strong worldwide and we're excited to see it once again contributing strongly to our growth.

Now, let me dive into the development by region.

Marc Maurer: Now let me dive into the development. Starting with Europe, Middle East and Africa, which grew by 33.6% on a reported basis in the quarter and reached 168.6 million citizens. On a constant currency basis, growth was 33%. Strong growth rates across all genders.

Adding this Europe Middle East and Africa, which grew by 33, 6% on a reported basis in the quarter and reached $168 6 million Swiss francs on a constant currency basis gross was 33% with strong growth rates across all channels.

Marc Maurer: We're excited to see increasing contributions and granteed from less established. Spain, Belgium, the Netherlands, as well as our Scandinavian partners. In France, we maintain the Parenti post-Olympics, establishing France amongst the top markets in Europe.

Speaker Change: We're excited to see increasing contributions and brand heat from less accepting markets like Spain, Belgium, and Netherlands, as well as our Scandinavian markets.

Speaker Change: In France, we maintained the Parenty Post Olympics, establishing fronds amongst the top markets in Europe in terms of net sales.

Speaker Change: Moving on to the Americas.

Marc Maurer: Moving on to the American. Net sales in the region grew by 32.7% year-over-year to $437.4 million. with a constant currency growth at 28%. We continue to see strong performance across our key strategic retail partners. with regions like the southeast and west coast outpacing the broad Reflecting this momentum, our own retail stores in Miami and Aberdeen are delivering standout We are also excited to open our second California store in Q1, located in Newport, which recorded the highest apparel share among all U.S.

Speaker Change: Net sales in the region grew by 32, 7% year over year to $437 4 million Swiss francs was the constant currency growth of 28, 6%.

Speaker Change: We continue to see strong performance across our key strategic retail partners in the U S with regions like the southeast and West coast outpacing the broader market.

Speaker Change: Reflecting this momentum our own retail stores in Miami and Abbot Kinney delivering standout results. We're always excited to open our second California store in Q1, located in Newport Beach, which recorded the highest apparel share among all U S stores during the quarter.

Marc Maurer: stores during In the Asia-Pacific region, the incredible momentum continued. Net sales grew by 130.1% on a reported to 120.6 million. On a constant currency basis, growth was 128.9% year-over-year.

Speaker Change: In the Asia Pacific region, the incredible momentum continued into Q1.

Speaker Change: Net sales grew by 131% on a reported basis to $120 6 million Swiss francs in Q1.

Speaker Change: On a constant currency basis growth was 128, 9% year over year.

Marc Maurer: In March, I had the pleasure to visit our team in Shanghai.

Speaker Change: In March I had the pleasure to visit our team in Shanghai and I already look forward to experiencing incredible energy around the World Championships in Tokyo later this year.

Marc Maurer: And I already look forward to experiencing the incredible energy around the world championships in Tokyo. As we have previously spoken about, growth continues to be very broad across the region. China, Japan, Australia, Korea, and our distributor markets in Southeast Asia more than doubled Momentum in China continues to accelerate, achieving the strongest growth Impactful campaigns like Softvins have elevated brand awareness, while more targeted Tmall initiatives such as Haybox and New Fashion Week have driven a notable increase in market share on Just two weeks ago, we opened our first flagship store in Chengdu's Super Premium Thai Cuisine.

Speaker Change: As we have previously spoken about growth continues to be very broad across the region.

Speaker Change: China, Japan, Australia, Korea, and our distributor markets in southeast Asia more than doubled and net sales momentum.

Speaker Change: Momentum in China continues to accelerate achieving the strongest growth across the region.

Speaker Change: Impactful campaigns like soft wins have elevated brand awareness by more targeted T mall initiatives, such as Hey box and new fashion week have driven a notable increase in market share on the platform.

Speaker Change: Just two weeks ago, we opened our first flagship store in China in Chengdu is Super premium Tycho Lee.

Speaker Change: Turning to our performance by product category.

Marc Maurer: Turning to our performance by product. Net sales from shoes grew by 40.5% to 680.9 million Swiss francs. Our strategic focus on building key franchises With the CloudSurfer 2 launch, the continued strength of the CloudMonster, the CloudRunner, and our new Raise product, our running franchises achieved some of the strongest The brand-building campaign around the Cloud Surfer 2 has created a clear halo across the entire cloud space.

Speaker Change: Net sales from shoes grew by 45% to $680 9 million Swiss francs in the first quarter.

Speaker Change: Our strategic focus on building key franchises is paying off with.

Speaker Change: With the cloud sofa to launch the continued strength of the clot monster the clouds runner and our new who raised product or running franchises achieved some of the strongest growth rates.

Speaker Change: The Brent building campaign around the cloud Sofia two has created a clear halo across the entire cloud sofa franchise.

Marc Maurer: In particular, the cloud server, Next, has seen a notable lift in momentum following In July we look forward to expanding the franchise further, building on the energy with the introduction of the cloud. Outside of running, the new Cloud 6, the Cloud Tilt, Cloud Nova, the Roger, and the new Cloud Zone drove.

Speaker Change: In particular, the cloud server next has seen a notable lift the momentum following the launch.

Speaker Change: In July we look forward to expanding the franchise further building on the and achieve is the introduction of the cloud surf a Max.

Speaker Change: Outside of running the new cloud six the cloud tilt clubbed, Nova the rupture and to new cloud zone drove significant growth.

Speaker Change: Moving onto apparel.

Marc Maurer: Moving on to a Net sales reached 38.1 million Swiss francs for the quarter, the highest quarterly net sales in history, increasing by 93.1%. But this growth rate is partly attributable to the prior year. we are highly energized by the success and feedback for our product.

Speaker Change: That said, it's reached $38 1 million Swiss francs for the quarter, the highest quarterly net sales in history, increasing by 93, 1% year on year.

Speaker Change: While this growth rate is partly attributable to the prior year base, we are highly energized by the success and feedback for our product lineup.

Marc Maurer: At our global summit, the team staged a full-scale fashion show, unveiling our complete head-to-toe offering for spring The energy and anticipation in the room were undeniable. and the Q1 numbers tell the same story. Parallel momentum is off to a strong start in 2020. Powered by standout launches and running movement. Our training campaign with FK Twigs, launched earlier this year, drove significant gains in the apparel share across key e-commerce Meanwhile, other formats, such as shop-in-shops with strategic retail partners, delivered outside At our cell fridges pop-up in London, which opened earlier in the quarter, nearly every second item purchased was either apparel or Moving down the P&L, our cross-profit margin increased to 59.9%, up from 59.7% in Q1.

Speaker Change: At our global summit, the team's staged a full scale fashion show unveiling our complete head to toe offerings for spring summer 'twenty six.

Speaker Change: The energy and anticipation into room, where undeniable.

And the Q1 numbers tell the same story apparel momentum it's off to a strong start in 2025 powered by stent out launches and running movement in tennis.

Speaker Change: Our training campaign with FK tweaks launched earlier this year drove significant gains in the apparel share across key E Commerce region.

Speaker Change: Meanwhile, other formats, such as shop in shops with strategic retail partners delivered outstanding results.

Speaker Change: But our Selfridges pop up in London, which opened earlier in the quarter nearly every second item purchased while these apparel or an accessory.

Speaker Change: Moving down the P&L, our gross profit margin increased to 59, 9% up from 59, 7% in Q1 24.

Marc Maurer: which reflects the increased D2C share versus the prior year period, as well as the power SG&A expenses, excluding share-based compensation, accounted for 47.3% of net sales in Q1, down from 48.8% We continue investing in all parts of the while driving operational. most reflected in the distribution. While we currently continue to fulfill higher order volumes through our LA Warehouse.

Speaker Change: Which reflects the increased D to C share versus the prior year period as well as the power of the premium position of the brand.

Speaker Change: SG&A expenses, excluding share based compensation accounted for 47, 3% of net sales in Q1 down from 48, 8% in the same period last year.

Speaker Change: We continue investing in all parts of the business, while driving operational efficiencies most reflected into distribution expense line.

Speaker Change: While we currently continue to fulfill higher order volumes through our L. A warehouse we remain highly focused on progressing with our new automated Atlanta facility.

Marc Maurer: We remain highly focused on progressing with our new. The resulting adjusted EBTA margin for Q1 is 16.5%. up from 15.2% in the first quarter.

Speaker Change: The resulting adjusted EBITDA margin for Q1, 16, 5% up from 15, 2% in the first quarter of 2024.

Speaker Change: We're pleased to report that our net income reached $56 7 million Swiss strengths.

Marc Maurer: We are pleased to report that our net income reached $56.7 million. Even after considering the sizable unrealized ethics loss due to the lower U.S.

Speaker Change: Even after considering the sizable unrealized FX loss two due to lower U S. Dollar at the end of the quarter.

Speaker Change: Moving on to our balance sheet capital expenditure were $12 1 million Swiss francs in Q1, 25, representing one 7% of net sales broadly in line with the 1.8% recorded in Q1 24.

Marc Maurer: Moving on to our Capital expenditure were 12.1 million Swiss francs in Q1 representing 1.7 Broadly in line with the 1.8% recorded. Inventory also remained relatively stable compared to year-end levels, standing at 399.3 million Swiss francs at the end of Our cash position was 871.8 million Swiss francs at the end of Q1. Down from 924.3 million Swiss francs at the end of 24. The decrease was primarily driven by the higher networking capital, a consequence of the strong growth and larger wholesale quarter, which resulted in a temporary increase in accounts.

Speaker Change: Inventory also remains relatively stable compared to year end levels standing at $399 3 million Swiss francs at the end of the quarter.

Speaker Change: Our cash position was 871.8 million Swiss francs at the end of Q1.

Speaker Change: Down from $924 3 million Swiss francs at the end of 'twenty four.

Speaker Change: The decrease was primarily driven by the higher networking capital.

Speaker Change: The consequence of the strong growth and larger wholesale quarter, which resulted in a temporary increase in accounts receivable.

Speaker Change: With that I would like to look ahead.

Marc Maurer: With that, I would like to look We're approaching the remainder of the year with an exciting and highly performance driven product. with strong brand momentum, with high levels of energy across our team. The Right Inventory Strong Cash. Entering Q2, we continue to observe strong consumer demand for our products across all global markets and Our pipeline of new product launches in the second half of the year includes running products like the Cloud Surfer CloudFloorFight and the Cloud Boom Max, our first super shoe for the everyday. as well as newness in our tenants and training virtual. Strong pre-orders for the second half of the year from our wholesale partners already reflect the strengths of our partners.

Speaker Change: We are approaching the remainder of the year with an exciting and highly performance terrific product pipeline.

Speaker Change: With strong brand momentum with high levels of energy across our team.

Speaker Change: With the right inventory and a strong cash position.

Speaker Change: Entering Q2, we continued to observe strong consumer demand for our products across all global markets and channels.

Speaker Change: Our pipeline of new product launches in the second half of the year.

Speaker Change: Includes running products like the cloud surf Amex.

Speaker Change: The cloud flow Fyfe.

Speaker Change: And the cloud to mix, our first Super Shaw 40 everyday runner.

Speaker Change: As well as newness in our tenants and training verticals.

Speaker Change: Strong preorders for what the second half of the year from our wholesale partners already reflect the strengths of our products.

Speaker Change: Our strong foundation for sustained growth is further supported by the elevated brand awareness as a result of the successful brand campaigns that we have executed in the later half of 2024 and the first quarter of 2025.

Marc Maurer: Our strong foundation for sustained growth is further supported by the elevated brand awareness as a result of the successful brand campaigns that we have executed in the later half of 2024 and the first quarter of 2020. Why we ended the remainder of the year with a lot of tailwinds.

Speaker Change: While we ended the remainder of the year is a lot of tailwind the ongoing.

Marc Maurer: The ongoing discussions and pending decisions surrounding potential incremental tariffs in the United States introduce a considerable degree of uncertainty into our and may create a dynamic market. This includes more volatile foreign exchange rates, with nearly all our key operating currencies significantly depreciating in value relative to the Swiss franc in recent Within this, it's paramount that we are focused on what we can control and continue to build our company towards our vision to be the most premium global startup. This means delivering on our brand promises to our fans while ensuring we continuously invest into what differentiates us in the long run.

Speaker Change: Discussions and pending decisions surrounding potential incremental tariffs in the United States introduce a considerable degree of uncertainty into our planning and may create a dynamic market environment.

Speaker Change: This includes more volatile foreign exchange rates with nearly all of our key operating currencies significantly depreciating in value relative to the Swiss franc in recent weeks.

Speaker Change: Within this it's Paramount that we are focused on what we can control and continue to build our company towards our vision to be the most premium global sportswear Brett.

Speaker Change: This means delivering on our brand promises to our fence, while ensuring we continuously invest into what differentiates us in the long term.

Marc Maurer: Highest Quality Standards, Cutting Edge Innovation. Premium Customer Experiences and Service, Sustainability and Social Income. In line with this ambition, we continuously assess our global pricing strategy within the movements of the industry and take actions where appropriate to maintain our premium. At the same time, we will continue to drive operational efficiencies across the P&L to give us as much flexibility as possible while investing in growth in this uncertain environment. On the back of our strong performance in Q1, the sustained high demand of our products across the globe, as well as our premium position and premium offering, we are increasing our constant currency gross rate outlook for 2025 to at least 2018.

Speaker Change: The highest quality standards cutting edge innovation premium customer experiences and service sustainability and social impact.

Speaker Change: In line with this ambition, we continuously assess our global pricing strategy within the movements of the industry and take actions where appropriate to maintain our premium position.

Speaker Change: At the same time, we will continue to drive operational efficiencies across the P&L to give us as much flexibility as possible while investing in growth in this uncertain environment.

Speaker Change: On the back of our strong performance in Q1 to sustained high demand of our products across the globe as.

Speaker Change: As well as our premium positioning and premium offering we are increasing our constant currency growth rate outlook for 2025 to at least 28%.

Speaker Change: Based on the latest spot rates reported net sales are projected to reach at least 2.86 billion Switzer inks.

Marc Maurer: Based on the latest spot rates, reported net sales are projected to reach at least $2.86 billion. This updated outlook implies a constant currency net sales growth rate of close to 25 percent for the remaining nine months of 2020. Based on the strengths of our order book for the last weeks of the spring-summer-25 season and the upcoming fall-winter-25 season, we see opportunities to accelerate beyond these numbers in a continued favorable consumer environment.

Speaker Change: This updated outlook implies constant currency net sales growth rate of close to 25% for the remaining nine months of the year.

Speaker Change: Based on the strengths of our order book for the last weeks of the spring summer twenty-five season and.

Speaker Change: In the upcoming fall winter twenty-five season, we see opportunities to accelerate beyond these numbers in a continued favorable consumer environment. So we.

Marc Maurer: So we remain cautious as we look into the second half of the year in the light of the macroeconomic uncertainties we are The recent global trade policy shifts have introduced higher levels of planning and This includes the additional dairies in place during the 90 day pause. The risk for increased terrorists and freight as well as channel volatility within the global supply chain. We will closely track and manage the broad-based currency effect from the above-mentioned depreciation of all key operating currencies against the Swiss francs for the remainder of the fiscal year. while taking it into consideration within our profitability outlook for the full year.

Speaker Change: We remain cautious as we look into the second half of the year and delight of the macroeconomic uncertainties we are observing.

Speaker Change: The recent global trade policy shifts have introduced higher levels of planning uncertainty.

Speaker Change: This includes the additional tariffs in place during the 90 day past period.

Speaker Change: The risk for increased tariffs and freight expenses as.

Speaker Change: As well as general volatility within the global supply chain.

Speaker Change: We will closely track and manage to broad based currency effect from the above mentioned depreciation of all key operating currencies against the Swiss francs, but the remainder of the fiscal year.

Speaker Change: Taking it into consideration within our profitability outlook for the full year.

Speaker Change: As a result of these factors we are embedding this higher degree of uncertainty in our cross profit margin and adjusted EBITDA margin outlook.

Marc Maurer: As a result of these facts, We are embedding this higher degree of uncertainty in our cross-profit margin and adjusted EBTA margin. We now project our cross-profit margin to be in the range of 60 to 60.5% for the full year. Despite these uncertainties, and given our strong position in the market, we remain committed to ongoing strategic investments in initiatives that will drive long-term sustainable growth. Including investments to drive brand awareness and market Impactful initiatives such as light spray, technology enhancement. and other key projects that drive innovation and innovation. Consequently, and given the sizeable Swiss franc cost.

Speaker Change: We now project, our gross profit margin to be in the range of 60% to 65% for the full year.

Speaker Change: Despite these uncertainties and given our strong position in the market. We remain committed to ongoing strategic investments in initiatives that will drive long term sustainable growth, including investments to drive brand awareness and market share gains impactful initiatives, such as light spray technology.

Speaker Change: She enhancement and.

Speaker Change: And other key projects that drive innovation and excellence.

Speaker Change: Consequently, and given the sizable Swiss franc cost base, we now expect our adjusted EBITDA margin to be in the range of 16, 5% to 17, 5%.

Marc Maurer: We now expect our adjusted EBDA margin to be in the range of 16.5% to 17.5%. With this clear direction and commitment, as well as the strength of our brand, we are convinced that our partners and fans will continue to invest into the most premium offering in the world. setting us up for long-term success from this position.

Speaker Change: With this clear direction and commitment as well as the strength of our brand. We are convinced that our partners and fence will continue to invest into the most premium offering in the market.

Speaker Change: Setting us up for long term success from this position of strength.

Marc Maurer: My thank you today goes to all of our partners that are on this journey with us. We are so grateful to be working together as we navigate these uncertainties at DREAM.

Speaker Change: Bye. Thank you today goes to all of our partners that are on this journey with US we are so grateful to be working together as we navigate these uncertainties at dream bond.

Speaker Change: With that Casper and I would like to open up the session to your questions.

Jerrit Peter: With that, Caspar and I would like to open up the session to you. But before I hand over to the operator. I would like to say thank you to you, Jerrit. for your amazing work leading investor relations since the IPCC. It means a lot to me that we will continue to work together as you move into your next chapter.

Speaker Change: But before I hand over to the operator.

Speaker Change: Would like to say, thank you to you Jared for your Amazing Burke, leading investor relations since the IPO.

Speaker Change: It means a lot to me that we will continue to work together as you move into your next chapter at all.

Jerrit Peter: And I look forward to welcoming Liv Rottlinger in her new role. Now.

Speaker Change: And I look forward to welcoming lift rod linger in her new role.

Speaker Change: Now.

Tiffany: We are ready to begin the Q&A session. At this time, I would like to remind everyone, in order to ask a question, press star, then the number 1 on your telephone keypad. We'll pause for just a moment to compile the Q&A roster.

Speaker Change: We are ready to begin the Q&A session.

Speaker Change: At this time I would like to remind everyone in order to ask a question Press Star then the number one on your telephone keypad.

Speaker Change: Well pause for just a moment to compile the Q&A roster.

Speaker Change: Your first question comes from Jonathan Komp with Baird. Please go ahead.

Jonathan Komp: Your first question comes from Jonathan Komp with Baird. Please go ahead. Yes, hello, Caspar, Martin, good afternoon. I want to follow up and ask about brand awareness. I know in the past, you've shared some pretty positive developments on the increases you're seeing. Could you share a little bit more about what you're seeing across regions after some of the big brand campaigns you've had? And then when you think more specifically about the Americas business, could you maybe just talk through some of the drivers of growth that you see for the balance of the year? Thanks for the question, John, you're spot on.

Speaker Change: Yes, Hello, Casper Martin good afternoon.

Jonathan Komp: I wanted to follow up and ask about brand awareness I know in the past you've shared some pretty positive develop Tommy increases youre seeing could you share a little bit more about what youre seeing across regions. After some of the big brand campaigns you've had.

Jonathan Komp: Then when you think more specifically about the Americans business could you maybe just talk through some of the drivers.

Jonathan Komp: Growth that you see for the balance of the year.

Jonathan Komp: Thanks for the question John you're spot on.

Caspar Coppetti: You know, this this first quarter, the exceptional results that we've seen are really a result from our brand efforts. As many of you know, last year, we started shifting more investment into the opera funnel, because we realized that In our most important markets, but globally in general, there's a lot of people that haven't heard of ON or you have a hard time reading the logo, what have you. So the initiatives that we've taken following coming out of the Olympics, of course, but then also, we had the Super Bowl ad with Elma and Rochard and went viral.

Jonathan Komp: You know this this first quarter and the exceptional results that we've seen are really a result from our brand efforts as S.

Jonathan Komp: Many of you know last year, we started shifting more investment into the upper funnel, because we realize that.

Jonathan Komp: In our most important markets globally in general.

Jonathan Komp: There's still a lot of people that haven't heard them on already I have a hard time reading the logo what have you. So the initiatives that we've taken policies coming out of the Olympics of course, but then also we had the Super Bowl AD was the element I and Rockford and went viral.

Martin Hoffmann: We've continued down this course, we just had the Zendaya campaign. These things are really resonating. And we're also doing very market things, for example, in China and other regions, but it's really these global initiatives that are driving the brand demand.

Jonathan Komp: We've continued down this course, we just had the Sunday our campaign.

Jonathan Komp: These things are really resonating.

Jonathan Komp: We're also doing a very market specific things fresh for example in China and in other regions, but it's it's really these global initiatives that are driving the brand demand.

Martin Hoffmann: And maybe Martin, you want to comment a bit more on the U.S. specifically? Yeah, hi, John. Very, very happy to do that. So if we look on a global scale, we really see that our momentum doesn't stop at the end of Q1. We actually just had the strongest month in the history of the company in April. And this is true from a global perspective. So all regions have seen strong growth continued into April. If you look at the U.S. specifically, I feel the picture that we see globally is the picture of the US as well, with All our brand campaigns resonating very strongly.

Jonathan Komp: And maybe Mark do you want to comment a bit more on the U S. Specifically.

Jonathan Komp: Okay.

Jonathan Komp: Yeah, Hi, Sean very happy to do that.

Jonathan Komp: So if you look on the on a global scale, we really see that our momentum doesn't stop at the end of Q1.

Jonathan Komp: Actually just had the strongest months in the history of the company in April and this is true from a from a global perspective, so all of the regions.

Jonathan Komp: Have stayed strong growth continue.

Jonathan Komp: Continued into April.

Jonathan Komp: If you look at the U S. Specifically.

Jonathan Komp: I feel the picture that we see globally is the picture of the U S as well with.

Jonathan Komp: All of our brand campaign is resonating very strongly.

Martin Hoffmann: Our new product had a very strong start, Thriving Crows. For us, it's important to win market share in running with both our run specialty retailers, as well as our general sporting goods retailers. That really allows us to be, at the moment, extremely careful in terms of store expansion in the U.S. So we're very much on the on the brakes there on adding more doors. We still do this, but at a very controlled speed. We have planned a couple of new own retail stores across the U.S. And we we see that they are working exceptionally well in the cities that we are in at the moment.

Jonathan Komp: Our new product had a very strong start driving driving growth for us it's important to to win market share in running.

Jonathan Komp: Both our run specialty retailers as well as our channel sporting goods retailers.

Jonathan Komp: And <unk>.

Jonathan Komp: That really allows us to be at the moment extremely careful in terms of store expansion in the U S.

Jonathan Komp: So we're very much on the on the breaks there on on ethane.

Jonathan Komp: More doors, we still do this but at a very controlled speeds.

Jonathan Komp: We have planned a couple of new owned retail stores across the U S and we see that they are working exceptionally well in the cities that we're in at the moment.

Martin Hoffmann: The same stock growth that we that we have seen in Miami, in Aberdeen, in New York is really, really strong. It's just a testament to the plenty that we have. Then let's not forget that especially in Q2 last year, we had disruptions on the operation side. This especially impacted our D2C business in the U.S. We feel in a much better position now. And so there's also a base effect. And then we still have a strong product pipeline to drive growth. And this is reflected in the strong pre-orders going forward. That's great. Very encouraging. Thank you.

Jonathan Komp: The same store growth that we that we have seen in Miami in Abbott Kinney in New York.

Jonathan Komp: It's really really strong it's just.

Jonathan Komp: Estimates to differentiate that we have.

Jonathan Komp: Then, let's not forget that especially in Q2 last year, we had disruptions on the operation side, it's especially impacted our DTC business in the U S. We feel in a much better position now and and.

Jonathan Komp: And so there was a base our base effect.

Jonathan Komp: And then we still have a strong product pipeline to drive growth and this is reflected in the strong pre orders going forward.

Jonathan Komp: Yes.

Jonathan Komp: That's great very encouraging thank you.

Alex Stratton: Your next question comes from Alex Stratton with Morgan Stanley. Please go ahead.

Alex Straton: Your next question comes from Alex Straton with Morgan Stanley. Please go ahead. Alex, your line is open. Great, thank you. Hi. Hi, Caspar, Martin.

Speaker Change: Alex Your line is open.

Speaker Change: Great. Thank you Hi, Hi, Kasper Martin this is <unk> on for Alex.

Unknown Executive: This is Chabert now on for Alex Straton. My first question, kind of touching on John's question, but my first question is on the improved constant currency growth outlook for the full year. Looks like guidance now embeds better 2Q to 4Q growth than prior. So first, what regions specifically are you planning better versus your previous outlook? And then any updated color on the shape of growth by channel for the remainder of the year would be helpful as well. Thank you. So if we look into the Outlook, we said it on the call. We are applying quite a high level of prudence in the outlook.

Speaker Change: My first question kind of kind of touching on Johns question, but my first question is on the improved constant currency growth outlook for the full year, it looks like guidance down beds, better <unk> growth and prior so first what region. Specifically are you planning better versus your previous outlook and then any updated color on the shape of growth.

Speaker Change: By channel for the remainder of the year would be helpful. As well. Thank you.

Speaker Change: Okay.

Speaker Change: So if we look into the outlook.

Speaker Change: Got it on the call.

Speaker Change: We.

Speaker Change: We are applying quite a high level of prudence in the outlook I just mentioned.

Martin Hoffmann: I just mentioned, we have seen the strongest month in the history of the company in April, so a really good start into that remainder of the year. And at the same time, we factor in the potential that we see a slowdown in consumer demand driven by the uncertainties that are out there. But based on what we observe at the moment, internally and in our channels, and that our key account partners, we don't see this. We see a very strong brand. We see our products and our brand awareness driving growth. And this is true across all the different channels.

Speaker Change: We have seen the strongest month in the history of the company in April its a really good start into that remainder of the year.

Speaker Change: And at the same time, we factor in the potential for that.

Speaker Change: <unk>.

Speaker Change: We see a slowdown in consumer demand driven by the uncertainties that are out there.

Speaker Change: Based on what we observed at the moment in.

Speaker Change: Internally and in our channels and our.

Speaker Change: Key account partners, we don't see it as we see a very strong brand we see our.

Speaker Change: Our products and our brand awareness driving growth and does this does this through across all the different across all the different channels.

Martin Hoffmann: So nothing much has changed, but we also didn't increase the year-to-go outlook and basically stayed where we were and passed on the beat from the first quarter with the perspective that our order book, our internal outlooks show that there's also an opportunity to end up with a higher growth rate. And this is really across all the different channels. We just mentioned EECOM remains very strong. You have seen that our D2C channel has been outperforming the wholesale channel in Q1. We have done a lot of investments into our capabilities in order to showcase the product in a better way on our app, on our website, on our marketplaces.

Speaker Change: Nothing much has changed.

Speaker Change: But we we also didn't increase the year to go outlook basically is a stage, where we maybe burn in test on the the beat from from the first quarter.

Speaker Change: With the perspective that our order book, our internal outlooks.

Speaker Change: So that there's also an opportunity to end up with a higher growth rate.

Speaker Change: And does this really across all the different channels.

Speaker Change: Mitch just mentioned.

Speaker Change: <unk> remains very strong you have seen that our DTC channel has been outperforming.

Speaker Change: Outperforming the whole China in Q1, we have done a lot of investments into our capabilities in order to showcase the product in a better way.

Speaker Change: Our app on our web site on our on our marketplaces.

Speaker Change:

Martin Hoffmann: This is also visible in the strong apparel number, which is very much D2C driven as well. As I said before, our retail stores are driving significant growth all across the different regions. And so do our wholesale partners and our key accounts that continue to see very strong growth. So for us, this is a global story. So we spoke about Asia-Pacific, where nearly all markets more than doubled the business in the first quarter. Europe, where all the strategic initiatives that we went through last year are really showing a positive effect and driving growth, including some of the younger markets that are really accelerating.

Speaker Change: This is also visible in the into strong apparel number which is very much D to C driven as well.

Speaker Change: Yes, as I said before our retail stores are.

Speaker Change: Driving significant growth all across the different the different regions.

Speaker Change: And so that's our to our wholesale partners and our key accounts that are continuing to see very strong growth so for us.

Speaker Change: This is a global story.

Speaker Change: We spoke about Asia Pacific, where nearly all markets more than doubled the business in the first quarter.

Speaker Change: Europe, we're all the strategic initiatives that we have.

Speaker Change: Went through last year.

Speaker Change: Really.

Speaker Change: Showing showing a positive effect in driving growth, including some of the younger markets that are that are really accelerating and then as said before the U S is the growth engine of the of the brand.

Martin Hoffmann: And then as I said before, the US is the growth engine of the brand. And yeah, it's a very healthy business there.

Speaker Change: Yes.

Speaker Change: A very healthy business there.

Speaker Change: Great. Thanks for the color I'll pass it on.

Unknown Executive: Great, thanks for the color. I'll pass it on.

Speaker Change: Your next question comes from a niche as chairman with Bernstein. Please go ahead.

Anisha Sherman: Your next question comes from Anisha Sherman with Bernstein. Please go ahead. Thank you. So I'm curious about what mitigation efforts you have already undertaken to minimize the headwinds you're facing from some of these tariffs, if any. And Martin, you referred to pricing strategy in your opening comments. Are there any price increases currently built into your margin guide? And to what extent do you think you're able to pass on some of the impacts of tariffs in terms of consumer price?

Speaker Change: Thank you Tom.

Speaker Change: Curious about what mitigation efforts you have already undertaken to minimize the headwinds you're facing from some of these tariffs.

Speaker Change: And Martin you referred to pricing strategy in your opening comments.

Speaker Change: Are there any price increase is currently built into your margin guide and to what extent do you think youre able to pass on some of the impacts of tariffs in terms of consumer pricing.

Speaker Change: Okay.

Martin Hoffmann: It's very important to understand that all the outlook that we presented is under the assumption of the tariffs that are currently in place. So specifically for Vietnam, the 10% additional tariff during the pause period that we are currently on. So that's the base for our outlook. As we said before, I think in those uncertain times, it's super important to focus on what the brand stands for and what the company stands for. And we want to be the most premium performance sportswear brand. And That requires us to have high quality products, to lead with innovation, to provide a customer with a unique customer experience, to invest in sustainability and social impact.

Speaker Change: Yes, it's very important to understand that.

Speaker Change: Well the outlook that we presented this under the assumption of the tariffs that are currently in place.

Speaker Change: Specifically for Vietnam, the 10% additional tariff.

Speaker Change: During the past periods that we are currently on so that's the that's the base for our outlook.

Speaker Change: As we said before I think in those uncertain times, it's super important to focus on.

Speaker Change: What the brand stands for and what the company stands for and we want to be the most premium performance sportswear brand.

Speaker Change: And.

Speaker Change: That requires us to have high quality products to lead with innovation to provide the customer with a unique customer experience to.

Speaker Change: To invest in sustainability.

Speaker Change: And social impact and we have done this over the last two years more than ever before.

Martin Hoffmann: And we have done this over the last one to years more than ever before. And this has really put us in a strong position to have earned pricing power in the different markets that we are in. And we want to separate ourselves even more from our competitors. And so we are in a position to increase prices and we will do this.

Speaker Change: That's really put us in a strong position to have pricing power in the different markets that we are in.

Speaker Change: And we want to separate ourselves even more from our competitors.

Speaker Change: And so we are in a position to increase prices and we will do this so.

Martin Hoffmann: So in the normal course of our business, starting with the fall winter season in July, we will initiate a pricing round in the US on selected styles in order to to really differentiate our products even more from our competitors on the premium position. And. This really puts the brand in a unique position and where we think we can drive even more from a position of strength. And at the same time, of course, that also helps us to mitigate some of the tariff impacts that we are seeing and that are embedded. And therefore, we also stayed with our cross-profit margin guidance, very close to where we were before, and very close to our long-term aspiration, factoring in the ethics impact that we see and that we spoke about.

Speaker Change: In the normal course of our of our business.

Speaker Change: Starting with the fall winter season and in July we.

Speaker Change: We will initiate the pricing round in the U S on selective styles in order to.

Speaker Change: To really differentiate our product even more from our competitors on the premium position.

Speaker Change: And.

Speaker Change: This really puts to put the Brent.

Speaker Change: And in a unique position and where we think we can we can drive even more from a position of strength strengths and at the same time of course that also helps us to mitigate some of the tariff impacts that we're seeing in that are embedded in and therefore, we also state.

Speaker Change: With our gross profit margin guidance.

Speaker Change: Very close to where we were before and very close to our long term aspiration.

Speaker Change: During in the FX impact that.

Speaker Change: That we that we see and that we spoke about.

Anisha Sherman: But from a tariff perspective, we will widely mitigate the impact. Really helpful. Thank you.

Speaker Change: But from a from a tariff perspective with a widely Medicaid.

Speaker Change: Thanks.

Speaker Change: Really helpful. Thank you.

Speaker Change: Yeah.

Jay Sole: Your next question comes from Jay Sole with UBS. Please go ahead. Great. Thank you so much. I'd love to ask a little bit more about apparel. You mentioned, you know, your excitement around what you're seeing there. Can you just talk about what has made, you know, the current apparel offering so successful and sort of what's changed over the last couple of years to get to the point where, you know, your enthusiasm sounds pretty clear?

Speaker Change: Your next question comes from Jay sole with UBS. Please go ahead.

Jay Sole: Great. Thank you so much I mean, I'd love to ask a little bit more about apparel you mentioned your excitement around what youre seeing there can you just talk about what has made.

Jay Sole: Current apparel offering so successful and sort of what's changed over the last couple of years to get to the point, where your enthusiasm sounds pretty clear.

Caspar Coppetti: Thank you, Jay, for pointing this out. And this is actually my highlight for the quarter, is that we've had such a tremendous progress on apparel, which, as you know, is a key building block for our future growth. And look, it's a combination of the homework that we've done over the course of 24 in two steps. We harmonized sizing. So our sizing corresponds a little bit better to what consumers are used to from other brands. And that has has really helped them, you know, drive down the return rates and increase repeat share on apparel. But then more specifically, you know, we see a lot of success in especially three categories running.

Jay Sole: Thank you Julian J four I pointed this out and this is actually my highlights for the quarters that we've had such a tremendous progress on apparel, which as you know is a key building block for our future growth.

Jay Sole: And look it's a combination of the homework that we've done.

Jay Sole: Over the course of 24 in two steps we.

Jay Sole: Harmonized sizing.

Jay Sole: So our our size of course.

Jay Sole: A little bit better to what consumers are used to from other brands that has has really helped.

Jay Sole: Uh huh.

Jay Sole: Drags down our return rates and increase repeat chair on apparel.

Jay Sole: And then more specifically.

Jay Sole: We see a lot of success and especially three categories running.

Caspar Coppetti: training slash movements or anything you do at the gym or a class-based activity in the gym, and then tennis. And so we're building on these three pillars. Martin mentioned already in the prepared remarks, we had a really strong campaign with FK Twix. We have now just doubled down a couple weeks ago with Zendaya, with the first knit product that we put out there. And we're going to continue on this path. So you know, you're going to see basically running, training and tennis as the main stories throughout the rest of the year. Some of our own retail stores are now really pushing high double-digit numbers on apparel share.

Jay Sole: Training slash movements or anything you do at the chain Laura.

Jay Sole: Class based activity in the gym, and then tenants and so we're building on these three pillars Martin mentioned already in the prepared remarks, we had a really strong campaign with FK tweaks. We have now just double down a couple of weeks ago with Cindy.

Jay Sole: With the first niche product that we put out there and we're going to continue on this path.

Jay Sole: Basically you're running training and tennis.

Jay Sole: The main story is throughout the rest of the year.

Jay Sole: Some of our own retail stores are not really pushing a high double digit numbers on apparel sure.

Jay Sole: Our.

Caspar Coppetti: Our If we do something special, I think Martin mentioned it as well, we can even have a 50% apparel share, which is very encouraging for what we're planning to do in the future.

Jay Sole: Yeah.

Jay Sole: Anything special I think Mark mentioned it as well.

Jay Sole: Can I even had a few.

Jay Sole: 3% apparel share, which is very encouraging for warfare look we're planning to do in the future.

Caspar Coppetti: Got it. If I can follow up on that, are you seeing some of that momentum in apparel also affect the wholesale business? And would you expect the wholesale apparel business to start to accelerate based on the success that wholesalers are seeing in your DTC channel with the apparel? Absolutely. Look, also, you know, like the business has become more complex. And so we've been we've been doing our homework to just get operationally better. And apparel, it's very, very important to have the right selection, you know, enough color choice and so on in those retail partners. So this has been a bit of a learning curve where our also wholesale partners have really helped us get sharper.

Speaker Change: Got it if I can follow up on that is are you seeing some of that momentum in apparel also effect. The wholesale business. I mean, do you expect our wholesale apparel business to start to accelerate based on the success that wholesalers are seeing in your DTC channel with the apparel.

Speaker Change: Absolutely look at also.

Speaker Change: The business has become more complex and so we've been we've been doing our homework to just get operationally better in apparel, it's very very important to have that.

Speaker Change: Right selection enough color choice and so on and those retail partners. So.

Speaker Change: It's been a bit of a learning curve.

Speaker Change: Where our also wholesale partners have really helped us get sharper and Thats now in effect and it's really yielding results apparel generally need space to be present there.

Caspar Coppetti: And that's now in effect. And it's it's really yielding results. Apparel generally needs space to be presented. You know, you have, you know, you put a couple of styles on the wall and you're there with the apparel you need to present in another way. So our own retail experience has helped us also serve our wholesale partners. Thank you so much.

Speaker Change: You put a couple of thoughts on the wall and you were there with gel doesn't apparel you need 2% another way so our own retail experience has helped US also serve our wholesale partners better.

Speaker Change: Alright, thank you so much.

Speaker Change: Your next question comes from Abri, Tia Nello with BNP Paribas. Please go ahead.

Aubrey Tianello: Your next question comes from Aubrey Tianello with BNP Paribas. Please go ahead. Hey, thanks for taking the question. I wanted to follow up on the store rollout. And I know it's still early, but over the past year or so, you really started opening up flagships and larger stores outside of China. Any color you can provide us on how they're performing in terms of revenue productivity or margin profile? And how would you say you're you're currently tracking relative to the long term target of getting the 10% revenue share from stores?

Speaker Change: Hey, Thanks for taking the question wanted to follow up on the store rollout and I know, it's still early but over the past year or so you're really starting to opening up flagships in larger stores outside of China.

Speaker Change: Any color you can provide us on how they are performing in terms of revenue productivity your margin profile.

Speaker Change: And how would you say you're currently tracking relative to the long term target of getting to 10% revenue share from stores.

Speaker Change: Yeah.

Martin Hoffmann: Yeah, very, very happy to do this, Aubrey. So at the moment we we have 53 stores open globally. around 30 are in China and 20 are outside of China. If you look at the 20 outside of China, then 18 of the 20 have exceeded the expectations that we had and there are a couple of stores that by far exceeded the expectations, which gives us a lot of confidence into that channel. And this is both true on top line as well as on bottom line. So the stores really become powerhouses for the brand to experience the customer.

Speaker Change: Yes, I'm very very happy to do so.

Speaker Change: So at the moment, we have 53 stores opened globally.

Speaker Change: Around 30, alright, and China in 'twenty or outside of China.

Speaker Change: Yes.

Speaker Change: If you look at the <unk> outside of China then.

Speaker Change: After 'twenty have exceeded the expectations that we that we had and.

Speaker Change: There are a couple of stores that by far exceeded the expectations, which gives us a lot of confidence into that channel and does this both through on top line as well as on.

Speaker Change: Bottom line.

Speaker Change: So the stores really become powerhouses for the Brent two.

Speaker Change: We experienced a customer and it's really our opportunity to showcase the footprint of.

Martin Hoffmann: And it's really our opportunity to showcase the full breadth of the brand. In China, our stores are smaller on average, but we just opened, as I said in the remarks, our first flagship store in Chengdu. So this is really elevating the experience now in China as well. So if we look at the success of retail and if we think into the future, then it becomes very clear that own retail will play a very important part in the strategy to make the brand even more premium. It will be a super important pillar for our Pals strategy, and it will also allow us to bring even more premium products to the market.

Speaker Change: Brent.

Speaker Change: In China, our stores are smaller on average.

Speaker Change: But we just opened as I've said in the remarks, our first flagship store.

Speaker Change: So this is really elevating the experience now in China as well.

Speaker Change: So if if we look at the success of retail and if we think into the future then it becomes very clear that owned retail will play a very important part in our strategy to make the brand even more premium.

Speaker Change: It will be super important pillar for our strategy.

Speaker Change: It will also allow us to bring even more premium product to the market.

Martin Hoffmann: While at the same time, we are fully committed to our omni-channel sales model and our commitment to our retail partners is fully there. So we are on track to open 20 to 25 stores on an annual basis. And with that, we are on track to the 10%. I wouldn't be surprised if we are actually exceeding the 10% because of the strength and also the continued sales growth that we are seeing. And what is really good to see, and with retail, we have some very clear test markets, like in France, like in Italy, where we didn't have a strong presence before.

Speaker Change: While at the same time, we are fully committed to our omnichannel.

Speaker Change: The sales model and our commitment to our retail partners is fully there. So we are we are on track to open 20 to 25 stores on an annual basis and with that we are on track to 2% to 10%.

Speaker Change: I wouldn't be surprised if we are actually exceeding the 10%.

Speaker Change: Because of the strengths and also the continued same store growth that we are seeing.

Speaker Change: <unk>.

Speaker Change: What is what is really good to see.

Speaker Change: And with retail we have some very clear test markets like in France like in Italy, where we didn't have a strong presence before it's really good to see the spillover from one retail into E com and that really both channels and try to grow through to each other and this is also how we build the tech capabilities at the moment. So we.

Martin Hoffmann: It's really good to see the spillover from own retail into e-com and that really both channels thrive to grow to each other. And this is also how we build the tech capabilities at the moment. So we really invest into omni-channel capabilities, understanding the customer in both channels. And so it's We are extremely happy with. with that journey of expanding on retail. Thank you.

Speaker Change: Really invest into omnichannel capabilities understanding the customer in both channels.

Speaker Change: And and so.

Speaker Change: We are extremely happy with.

Speaker Change: With that journey of expanding our retail.

Speaker Change: Excellent. Thank you.

Speaker Change: Your next question comes from Anna <unk> with Piper Sandler. Please go ahead.

Anna Andreeva: Your next question comes from Anna Andreeva with Piper Sandler. Please go ahead. Great, thanks so much and best of luck to Jerrit and Marc and also congrats to Martin.

Speaker Change: Great. Thanks, so much and best of luck to Jerry and Mark and congrats to Mark.

Unknown Executive: I wanted to ask about CloudFix. You mentioned it's resonating with both new and existing customers. Can you talk about the demo of the new to on consumer that you're seeing with that?

Speaker Change: Wanted to ask about cloud cloud you mentioned is resonating with both new and existing customers can you talk about the demo of the new.

Speaker Change: So on consumer that youre seeing with that and if that's different by geography, and then just a quick follow up you mentioned April was the best month in company history globally.

Unknown Executive: And if that's different by geography? And then just a quick follow up.

Unknown Executive: You mentioned April was the best month in company history globally. Should we think that similar momentum from OneQ is continuing quarter to date or just any quantification of that will be great? Thanks a lot.

Speaker Change: Is that should we think that's similar momentum from Q1.

Speaker Change: Year to date or just any quantification of that would be great.

Speaker Change: Mhm.

Speaker Change: Thanks, a lot I can take the question on cloud <unk>. So.

Caspar Coppetti: I can take the question on cloud six. So Cloud is now about nine years old and it's been a key driver for the business. So we've taken a conscious decision over the last two years to take the foot off the gas a bit on the cloud. And now with Cloud 6, we're relaunching it as an icon. And it really goes across demographics. Definitely a strong uptake by a younger consumer. You may have seen also the photography and campaign around it. It's resonating well in the sneaker channels in the US, in Europe, especially in Asia. And it looks like the demos are all finding their own variant of the cloud that they're most into.

Speaker Change: Cloud is now now about nine years old and it's it's a it's been a key driver for the business. So.

Speaker Change: Taken a conscious decision over the last two years to take the foot off the gas a bit on the cloud.

Speaker Change: And that was cloud six we're re launching it as an icon.

Speaker Change: And it really goes across across demographics.

Speaker Change: Definitely a strong uptake by a younger consumer you may have seen also the photography and campaign around it.

Speaker Change: It's resonating well in <unk>.

Speaker Change: And the sneaker channels.

Speaker Change: In the U S and Europe, especially in Asia.

Speaker Change: And it looks like the demo surf all finding their own version of the cloud that they're most into.

Caspar Coppetti: We have tremendous success with the cloud waterproof in many regions. We have younger versions like Cloud Coast. And you're also going to see a couple of very sharp collaborations where we're bringing cultural relevance to this icon.

Speaker Change: We have tremendous success with the cloud waterproof and in many regions.

Speaker Change: We have.

Speaker Change: All new versions like the cloud coast.

Speaker Change: And you're also going to see a couple of very.

Speaker Change: Sharp collaborations wherever we're bringing cultural relevance to this icon.

Caspar Coppetti: So we could be happy with how the launch has gone. And maybe also for everybody that is thinking about price increases, we have launched the Cloud 6 at $10 higher in the base model. And then we've also taken the variants up even higher. And we have not seen any price sensitivity on the demand side for that. In fact, it's been our most successful launch ever.

Speaker Change: So we couldnt be couldn't be happier with how the launch has gone and maybe also for everybody that is thinking about price increases we have.

Speaker Change: Launched a cloud six at $10 higher.

Speaker Change: And the base model and then we've also taken the barbarians up even higher.

Speaker Change: And we have not seen any any price sensitivity on the demand side for that.

Speaker Change: It's been our most successful launch ever.

Martin Hoffmann: Yeah, and then just on Q1, Q2, so you know, we are not guiding on the quarter. I think the message on April is really to show that the strength of the brand is there, the demand continues to be strong. Let's remember last year we had a very strong launch with the cloud runner in the second quarter versus this year with the cloud and the server was more in Q1. So we need to factor that in. On the other side we had the operational impacts last year which we don't foresee this year.

Speaker Change: And then.

Speaker Change: Just on Q1 Q2.

Speaker Change: No we are not guiding on the quarter.

Speaker Change: I think the message on April is really too to show that the strength of the brand as their demand continues to be to be strong.

Speaker Change: Let's remember last year, we had a very.

Speaker Change: Strong launch with the cloud runner in the second quarter versus this year.

Speaker Change: With the cloud and to certify this was more in Q1.

Speaker Change: So we need to factor that in.

Speaker Change: On the outside we have the operational impacts last year, which we don't foresee this year.

Martin Hoffmann: It's more looking at the long term outlook and also looking into into 26. really the message is we were projecting to double the business over the course of two years, which embedded a 26% CAGR. We have grown 33% last year, we had a 40% growth in Q1, our outlook is on 28% plus for the full year. So we are well ahead of our growth aspiration. We talked about some of the strategic initiatives that are in there with China, with retail, with apparel. They are all proven to be working.

Speaker Change: It's more looking at.

Speaker Change: The long term outlook and also looking into into 26.

Speaker Change: Really the messages to be we're projecting to double the business.

Speaker Change: Over the course of two years.

Speaker Change: Rich embedded at 26% CAGR, we have grown 73% last year, we had 40% growth in Q1, our outlook from 28% plus for quarter for the full year. So we are well ahead of our gross aspiration we.

Speaker Change: You talked about some of the strategic initiatives that are in there with China with retail with apparel.

Speaker Change:

Speaker Change: They are all proven to be working and I think there's a stay the important message that we.

Martin Hoffmann: And I think this is the important message that we are confident in what we are doing and we will further scale those elements of growth.

Speaker Change: We are confident in what we're doing and we will further scale those cost elements of growth.

Unknown Executive: Well, fair enough.

Speaker Change: Well fair enough. Thank you so much.

Unknown Executive: Thank you so much.

Speaker Change: Your next question comes from Tom Naked with Needham and company. Please go ahead.

Tom Nikic: Your next question comes from Tom Nikic with Needham and Company. Please go ahead. Hey, good morning. Thanks for taking my question. I want to ask about the wholesale channel. You know, some brands that you know, you, I wouldn't say you compete with them. But you know, some, some footwear brands out there have said that, you know, wholesale partners have taking a more cautious view towards the second half of the year and you know that we should expect some some more cautious https://www.youtube.com.uk Thanks. We're not seeing any of that. We're not seeing any cancellations in the order book.

Tom Naked: Hey, good morning, guys. Thanks for taking my question.

Tom Naked: I wanted to ask about the wholesale channel.

Speaker Change: Some brands that.

Speaker Change: I wouldn't say you compete with them but.

Speaker Change: Some footwear brands out there have said that wholesale.

Speaker Change: Gartner is half.

Speaker Change: Taking a more cautious view towards the second half of the year and that we should expect some more cautious.

Speaker Change: Ordering patterns from from them have you seen anything like that or is your brand momentum just so strong that.

Our wholesale order book is pretty much.

Speaker Change: As you would expect.

Speaker Change: Thanks.

Speaker Change: We're not seeing any of that we're not seeing any cancellations in the order book.

Martin Hoffmann: We also have to keep in mind that we have always been very diligent in planning our wholesale business. And so this is a very close exchange between us as partners. And we see ourselves through, we share what we have, what we can offer them at this point, and what goes into other channels. And so no, there's no change in behavior that we're observing at this time.

Speaker Change: We also have to keep in mind that we have always.

Speaker Change: Been very diligent in planning our wholesale business.

Speaker Change: So.

Speaker Change: This is a very close close.

Speaker Change: Exchange between between US as partners and we see their sell through we share what we have because we can offer them at this point what goes into other channels.

Speaker Change: And so no there's no there's no change in behavior that we're observing at this time.

Unknown Executive: Great to be here. Thanks very much. Thank you.

Speaker Change: Great.

Speaker Change: Thanks very much.

Speaker Change: Thank you.

Speaker Change: Your next question comes from Cristina Fernandez with Telsey Advisor Group. Please go ahead.

Cristina Fernandez: Your next question comes from Cristina Fernandez with Telsey Advisor Group. Please go ahead. Thank you. Good morning and congratulations on the strong momentum. I also wanted to ask on wholesale, but a different way. Earlier in the year, you had talked about 5% to 6% growth in wholesale doors for the year. Today, if I heard you correctly, you mentioned you were pausing some door growth in the U.S. Has that outlook changed? What's the door count growth for the year and what are the key drivers?

Cristina Fernandez: Thank you good morning, and congratulations on the strong momentum I also wanted to ask on wholesale but.

Speaker Change: That's right.

Speaker Change: Different way earlier in the year, you had talked about 5% to 6% growth in wholesale doors.

Speaker Change: For the year to date, if I heard you correctly. You mentioned you were passing some door growth in the U S. So has that outlook changed and.

Speaker Change: So.

Speaker Change: What's the door count growth for the year and where are the key drivers.

Speaker Change: Yeah.

Martin Hoffmann: Hi Cristina. No, that outlook hasn't changed. So we still see the crows in the mid single digits. As I said before, the... If the if the demand for the brand is strong. you can be much more on the brakes by expanding your wholesale network because we want to grow in the long term, and we want to grow within the corridor that we set ourselves. And that's what we are doing. At the same time, as Caspar said, we put a lot of emphasis on making sure that the channel inventory is very clear and clean. And at the same time, yes, we continue to expand.

Cristina Fernandez: Hi, Kristina no that outlook hasn't changed so we still see the growth in the mid single digits.

Speaker Change: As I've said before.

Speaker Change: If the demand for the brand is strong.

Speaker Change: You can be much more onto breaks by expanding Europe wholesale network.

Speaker Change: Of course, we want to grow in the long term and we want to grow this into corridor that we set ourselves.

Speaker Change: That's what we are doing.

Speaker Change: And at the same time as Kasper said, we've put a lot of emphasis on making sure that.

Speaker Change: Inventory is very clear and clean.

Speaker Change: And and at the same time, yes.

Speaker Change: Yes, we continue to expense.

Martin Hoffmann: But in a controlled way, we continue to open doors with our wholesale partners. We have some of the younger markets, of course, where we have more opportunities for door openings. But as I said, it's a very much controlled path, and we are very much in control of how much inventory we ship into the channel to make sure that they continue to drive a high share of full price business, which is super important for them, for us. We spoke about this. It also helped both channels during the holiday season to be set up in the right way.

Speaker Change: In a controlled way.

Speaker Change: We continue to open doors for us with our outside partners we have.

Speaker Change: Some of the younger markets of course, where we have more opportunities for four door openings.

Speaker Change: As I said, it's a very much controlled paas and <unk>.

Speaker Change: And we are very much in control of how much inventory, we ship into the channel to make sure that.

Speaker Change: They continue to drive a high share of full price business.

Speaker Change: Which is super important for them for us and we spoke about this it also helped both channels during the holiday season.

Speaker Change: To be set up in the right way. So that's our goal and Thats, our core focus and it all comes out of out of the perspective that we want to be the most premium brand.

Martin Hoffmann: So that's our goal, and that's our core focus, and it all comes out of the perspective that we want to be the most premium brand.

Speaker Change: Yeah.

Speaker Change: Okay.

Speaker Change: Your final question comes from the line of John Kernan with TD Cowen. Please go ahead.

John Kernan: Your final question comes from the line of John Kernan with TB Cohen. Please go ahead. Hey, good afternoon. Thanks for squeezing me in.

John Kernan: Hey, good afternoon, Thanks for squeezing me in.

John Kernan: Martin how have your responsibilities are how are they going to evolve now.

Martin Hoffmann: Martin, how have your responsibilities or how are they going to evolve now with, uh, given Mark's departure and is there any change in strategy as you come forward? You already see I need to answer twice as many questions that before. I think the most important is we are looking for a CFO. So really need someone on my side to lead from the finance perspective. We have a super strong internal team. We are deep in the evaluation at the moment of internal and external candidates for the CFO role. Marc and I shared basically a lot of things in the past, so we had a lot of insights into each other's businesses and parts of the business, so there are not many blind spots for myself where I need to find my way in, and at the same time, you know, we are very clear on the strategy, nothing is changing there, the whole team is very clear on where we want to go for the next years, so I think this is a smooth transition from the two to the one, and at the same time it's not two to one, but we were a group of five and now we are a group of four to lead the company.

John Kernan: Given March departure and is there any change in strategy going forward.

John Kernan: They already see a need to add twice as many questions that before.

John Kernan: Yeah.

John Kernan: I think the.

John Kernan: Most important days.

John Kernan: We're looking for for a CFO so.

John Kernan: Really need someone on my side too.

Speaker Change: Two are truly further finance perspective, we have a super strong internal team, we are deep and diverse variation at the moment of internal and external candidates for the CFO role.

Mark and I shared.

Speaker Change: Basically a lot of things in the past. So we had a lot of insights into each other's businesses and parts of the business. So there are not many client spots for myself I need to find my way.

Speaker Change: And at the same time.

Speaker Change: We are very clear on our strategy nothing is changing there.

Speaker Change: The whole team is.

Speaker Change: It's very clear and very one to go for the next for the next years.

Speaker Change: So I think this is it.

It's a smooth transition.

Speaker Change: From from the 200 to the one and at the same time, it's not two to one.

Speaker Change: We very group of five and now we are accrued before.

Speaker Change: To lead the company and.

Speaker Change:

Martin Hoffmann: Caspar, David, Olivier are very, very much involved on the product side, on the brand side, which, of course, is a super important part of the business. And so we have a lot of exchange in that group. So, yeah, it's going to be more lonely, but I think in terms of the actual transition, this will be very smooth. Helpful, thanks.

Speaker Change: Caspar David Oliver.

Speaker Change: A very very much involved.

Speaker Change: On the product side on the on the brand side, which of course is super important part of the business and so we have a lot of exchange in that group.

Speaker Change: So yes it is.

It's going to be more lonely, but I think in terms of the.

Speaker Change: Extra transition this will be very smooth.

Speaker Change: It's helpful. Thanks, if I could just sneak one more question and just any update on the automation projects as we get into the back half of the year and then the scalability of light spray going forward can you talk to you.

Martin Hoffmann: If I could just sneak one more question in, just any update on the automation projects as we get into the back half of the year and then the scalability of Lightspray going forward. Can you talk to initiatives there and what you see long term for that business? Yeah, happy to take that on light spray. Look, light spray is a revolution in material, in automation, in sustainability, and in producing closer to consumers. And we know we're laser focused in making it happen.

Speaker Change: Our initiatives, there and what you've seen long term for that business.

Speaker Change: Yeah happy to take that on life's Cray look like Fraser is a revolution in material in automation and some stability and in and producing closer to consumers and we're laser focused in making it happen.

Martin Hoffmann: We can't share a timeline yet. What we can share is that a month ago, we made the first CloudBoom light sprays that were actually produced here in Zurich available to consumers through our most premium running specialty stores. There are more launches planned of Lightspeed products throughout the year as we're as we're starting to build these production capabilities. But I don't want to use too much thunder.

Speaker Change: We can't share a timeline yet.

Speaker Change: But we can share is that a month ago.

Speaker Change: <unk> made the first cloud boom lights phrase that were actually produced here in Zurich available to consumers through our.

Most premium running specialty stores, there are more launches planned of lightspeed products throughout the year.

Speaker Change: As we were as we were starting to build these production capabilities.

Speaker Change: But I don't want to use too much thunder.

Martin Hoffmann: Launches are coming and you'll know about them first.

Speaker Change: Launches are coming in.

Speaker Change: No about them first.

Martin Hoffmann: And then just a quick note on the automation project in our Atlanta warehouse. It's progressing well. We are still in the live testing phase. Majority of our D2C volume is already processed in an automated way. At the same time, still try to keep the load low and manageable for B2B. And so a lot of that still comes out of LA. And over the next months, that load will increase. And so we will test the. the installation under basically full load, but so far the lights are on green. Got it.

Speaker Change: And then just a quick note on the on the automation project in our Atlanta warehouse.

Speaker Change:

Speaker Change: It's progressing well.

Speaker Change: We're still in.

Speaker Change: And the life testing face a majority of our D to C volume is already processed an automated way at the same time still try to keep the lower LOE and manage about <unk>. So a lot of that comes out of out of L. A and over the next months.

Speaker Change: Months debt load will increase.

Speaker Change: And so we will test.

Speaker Change: That's installation on their under basically followed but so far the lights are green.

Speaker Change: Got it best of luck everybody.

Unknown Executive: Best of luck, everybody. Thank you.

Speaker Change: Thank you.

Speaker Change: Ladies and gentlemen, this concludes today's call. Thank you all for joining you may now disconnect.

Unknown Executive: Ladies and gentlemen, this concludes today's call. Thank you all for joining.

Unknown Executive: You may now disconnect.

Speaker Change: [music].

Speaker Change: Yes.

Speaker Change: [music].

Speaker Change: Yes.

Speaker Change: Yes.

Speaker Change: [music].

Speaker Change: Okay.

Speaker Change: [music].