Q2 2025 Amer Sports Inc Earnings Call

After the Speakers' remarks, there will be a question and answer session. If you'd like to ask a question. During this time simply press star followed by the number one on your telephone keypad. If he would like to withdraw your question again press Star one. Thank you I'd now like to turn the call over to Omar Saad SVP capital markets and Investor Relations you may begin.

Welcome everyone.

Thanks for joining AMR sports, earning call for the second quarter of fiscal year 2025.

Earlier this morning, we announced our financial results for the quarter ended June 32025, and the release can be found on our IR website investors that our sports Dot com.

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

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

They are subject to certain risks and uncertainties may cause actual results to differ materially.

Please see the safe Harbor statements in our earnings release and SEC filings.

We will also discuss certain non <unk> financial measures. Please refer to our earnings release for important information regarding such non <unk> financial measures, including reconciliations to most comparable <unk> financial measures.

We'll begin with prepared remarks from our CEO, James Zhang and CFO, Andrew page, followed by a Q&A session until approximately nine a M. Eastern.

James will cover key operational and brand highlights and Andrew will provide a financial review at both the group and segment level and also walk through our guidance for the third quarter and full year 2025.

Our Terex CEO Stuart Hazelton, who joined for the Q&A session.

Speaker #1: Thank you for standing by, and welcome to the Amer Sports second quarter fiscal 2025 earnings conference call. All lines have been placed on mute to prevent any background noise.

Operator: Thank you for standing by and welcome to the Amer Sports Inc. second quarter fiscal 2025 earnings conference call. 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 this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, again, press star one. Thank you. I would now like to turn the call over to Omar Saad, Senior Vice President, Capital Markets and Investor Relations. You may begin.

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

Thanks Omar.

<unk> strong momentum continued into the second quarter as our unique portfolio of premium technical brands continues to create white space and the picture in sports and outdoor markets around the world.

Speaker #1: After the speaker's remarks, there will be a question-and-answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad.

Speaker #1: If you would like to withdraw your question, again press *1. Thank you. I would now like to turn the call over to Omar Saad, SVP, Capital Markets and Investor Relations.

We remain confident in our ability to manage to higher tariffs and other near term macro uncertainties. We are also ensuring that we develop each of our unique brand for higher quality long duration growth.

Speaker #1: You may begin.

Speaker #2: Welcome, everyone. Thanks for joining Amer Sports' earnings call for the second quarter of fiscal year 2025. Earlier this morning, we announced our financial results for the quarter ended June 30, 2025, and the release can be found on our IR website, investors.amersports.com.

Andrew Page: Welcome, everyone. Thanks for joining Amer Sports Inc. earnings call for the second quarter of fiscal year 2025. Earlier this morning, we announced our financial results for the quarter ended June 30, 2025, and the release can be found on our IR website, investors.amersports.com. A quick reminder to everyone that today's call will contain certain forward-looking statements within the meaning of the federal securities laws. These forward-looking statements reflect our current expectations and beliefs only. They are subject to certain risks and uncertainties that cause actual results to differ materially. Please see the safe harbor statements in our earnings release and SEC filings. We will also discuss certain non-IFRS financial measures.

But recent Saddam footwear acceleration.

Tariffs continue the momentum and the steady results from our equipment franchises position us well for another strong performance in 2025 NCL.

Speaker #2: A quick reminder to everyone that today's call will contain certain forward-looking statements within the meaning of the Federal Securities Laws. These forward-looking statements reflect our current expectations and beliefs only.

In Q2, we delivered strong results across sales margin and EPS, We January 23% sales growth or 22% excluding currency impact and then we also expand our adjusted operating margin by 260 basis points.

Speaker #2: They are subject to certain risks and uncertainties that cause actual results to differ materially. Please see the safe harbor statements in our earnings release and SEC filings.

Speaker #2: We will also discuss certain non-IFRS financial measures. Please refer to our earnings release for important information regarding such non-IFRS financial measures, including reconciliations and the most comparable IFRS financial measures.

Our performance was led by very strong growth and profitability in both outdoor performance and the technical apparel as well as a solid performance important record.

Andrew Page: Please refer to our earnings release for important information regarding such non-IFRS financial measures, including reconciliations to most comparable IFRS financial measures. We will begin with prepared remarks from our CEO, Jie Zheng, and Chief Financial Officer, Andrew Page, followed by a Q&A session until approximately 9 A.M. Eastern. Jie Zheng will cover key operational and brand highlights, and Andrew Page will provide a financial review at both the group and segment level, and also walk through our guidance for the third quarter and full year 2025. Arc'teryx CEO, Stuart Hazelden, will join for the Q&A session. With that, I will turn the call over to Jie Zheng.

Speaker #2: We'll begin with prepared remarks from our CEO, Jie Zheng, and our CFO, Andrew Page, followed by a Q&A session until approximately 9 AM Eastern. James will cover key operational and brand highlights, then Andrew will provide a financial review at both the group and segment level, and also walk through our guidance for the third quarter and full year 2025.

Andrew will provide a more detailed update on our tariff exposure, but I'd like to emphasize that I believe we are well positioned to manage through a wide range of Terry scenarios, given our premium brands.

Pricing power.

Secular growth trends and relatively low U S revenue exposures as I mentioned, we believe Amer sports is a uniquely positioned company within the global sports and outdoor space.

Speaker #2: Arcteryx CEO Stuart Hazelden will join for the Q&A session. With that, I'll turn the call over to James.

Speaker #3: Thanks, Omar. Amer Sports' strong momentum continues in the second quarter, as our unique portfolio of premium technical brands continues to create white space and texture in sports and outdoor markets around the world.

Jie Zheng: Thanks, Omar. Amer Sports' strong momentum continues in the second quarter as our unique portfolio of premium technical brands continues to create a wide space and a picture in sports and outdoor markets around the world. We remain confident in our ability to manage through higher tariffs and other near-term macro uncertainties. We are also ensuring that we develop each of our unique brands for higher quality, long-duration growth. The recent Salomon Footwear acceleration accelerates continued momentum and the steady results from our equipment franchise position us well for another strong performance in 2025 and beyond. In Q2, we delivered strong results across sales margin and EPS. We generated 23% sales growth, or 22% excluding currency impact. We also expanded our adjusted operating margin by 260 basis points.

Several factors give me confidence for our near medium and long term outlook.

First.

We own a unique portfolio of premium innovation, driven sports and outdoor brands.

Speaker #3: We remain confident in our ability to manage through higher tariffs and other near-term macro uncertainties. We are also ensuring that we develop each of our unique brands for higher-quality, long-duration growth.

Second.

Terex is a breakout story with the leading growth and profitability for the outdoor industry driven by disruptive direct to consumer model.

Speaker #3: The recent settlement forward acceleration at Arc'teryx continues the momentum and a steady result from our equipment franchise. We are positioned for another strong performance in 2025 and beyond.

Third Saddam sneakers have unique performance and the design position and the brand is experiencing a global acceleration, but it still has a small share of the global market.

Fort worth.

Speaker #3: In Q2, we delivered strong results across sales, margin, and EPS. We generated 23% sales growth, or 22% excluding currency impact, and we also expanded our adjusted operating margin by 260 basis points.

And our winter sports equipment franchisees have higher performance products and the leading share.

<unk> delivers lower long term growth except for work in soft goods, which has significant long term potential.

And fifth we have a strong differentiated platform in greater China, where we continue to deliver best in class performance across all three big brands.

Speaker #3: Our performance was led by very strong growth and profitability in both outdoor performance and technical apparel, as well as a solid performance in board and racket.

Jie Zheng: Our performance was led by very strong growth and profitability in both outdoor performance and technical apparel, as well as a solid performance in foreign markets. Andrew Page will provide a more detailed update on our tariff exposure, but I would like to emphasize that I believe we are well positioned to manage through a wide range of tariff scenarios, given our premium brands with pricing power, secular growth trends, and relatively low U.S. revenue exposures. As I mentioned, we believe Amer Sports Inc. is a uniquely positioned company within the global sports and outdoor space. Several factors give me confidence for our near, medium, and long-term outlook. First, we own a unique portfolio of premium innovation-driven sports and outdoor brands. Second, Arc'teryx is a breakout story with leading growth and profitability for the outdoor industry, driven by its disruptive direct-to-consumer model.

Before I turn to over to Andrew allow me to briefly recap key brand highlights from our three segments.

Speaker #3: Andrew will provide a more detailed update on our tariff exposure, but I'd like to emphasize that I believe we are well positioned to manage through a wide range of tariff scenarios, given our premium brands with pricing power, secular growth trends, and relatively low U.S. revenue exposures.

Starting with technical apparel, which is led by our largest brand tariffs.

<unk> delivered another quarter of broad based strength across regions channels and categories.

Especially footwear and our women's which continued to grow faster than that.

Speaker #3: As I mentioned, we believe Amer Sports is a uniquely positioned company within the global sports and outdoor space. Several factors give me confidence in our near, medium, and long-term outlook.

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We are encouraged to see technique apparel momentum continue in the direct to consumer channel, where we generate a very solid 15% omnicom in Q2, despite facing the highest two year comp comparison of 2025.

Speaker #3: First, we own a unique portfolio of premium, innovation-driven sports and outdoor brands. Second, Arcteryx is a breakout story with leading growth and profitability for the outdoor industry, driven by its disruptive electric consumer model.

Okay. Both continue to be critical to their growth strategy, especially how we engage with local consumers in the community.

Our first opened seven net new stores in Q2.

Hello, opening offset by a coger of five legacy location as part of our ongoing strategy to optimize the quality and the productivity of our store fleet.

Speaker #3: Third, settlement sneakers have unique performance and design positioning, and the brand is experiencing global acceleration but still has a small share of the global sneaker market.

Jie Zheng: Third, Salomon has a unique performance and design positioning, and the brand is experiencing a global acceleration, but still has a small share of the global sneaker market. Fourth, Wilson and our winter sports equipment franchises have high-performance products and a leading share, but we have delivered slower long-term growth, except for Wilson's soft goods, which has significant long-term potential. Fifth, we have a strong differentiated platform in Greater China, where we continue to deliver best-in-class performance across all three big brands. Before I turn it over to Andrew Page, allow me to briefly recap key brand highlights from our three segments. Starting with technical apparel, which is led by our largest brand, Arc'teryx. Arc'teryx delivered another quarter of broad-based strength across regions, channels, and categories, especially footwear and women, which continue to grow faster than the brand overall.

Ah Paris store expansion strategy inclusive of our mix different format, ranging from multi level large scale off of our flagship stores to small format very distinct mountain palm shops.

Speaker #3: Fourth, Western and our winter sports equipment franchises have high-performance products and the leading share. However, we are delivering slower long-term growth, except for Western soccer, which has significant long-term potential.

In EMEA key new store location this quarter, including our first store in Orlando and Stockholm.

Speaker #3: And fifth, we have a strong differentiated platform in Greater China, where we continue to deliver best-in-class performance across all three big brands. Before I turn it over to Andrew, allow me to briefly recap key brand highlights from our three segments.

In North America, we opened a new mountain Powershop at the resort in Canada, which has been experiencing strong traffic since opening in April.

It has been one of the top performing shops in the region.

Speaker #3: Starting with technical apparel, which is led by our largest brand, Terrace. Arc'teryx delivered another quarter of broad-based strength across regions, channels, and categories.

This is a proof point that our currency can be regiments, Iraq, even in summer we.

We opened a new flagship in Vancouver unlock since seat.

Speaker #3: Especially in footwear and women's categories, which continue to grow faster than the brand overall. We are encouraged to see technical apparel momentum continue in the direct-to-consumer channel, where we generated a very solid 15% omnichannel gross margin in Q2, despite facing the highest two-year omnichannel comparison of 2025.

Best location in the city with excellent performance since opening in July.

Jie Zheng: We are encouraged to see technical apparel momentum continue in the direct-to-consumer channel, where we generated a very solid 15% omnicom in Q2, despite facing the highest two-year omnicom comparison of 2025. Arc'teryx continued to be critical to the growth strategy, especially how we engage with local consumers and the community. Arc'teryx opened seven net new stores in Q2, with 12 openings offset by our closure of five legacy locations as part of our ongoing strategy to optimize the quality and the productivity of our store fleet. Arc'teryx store expansion strategy includes a mix of different formats, ranging from multi-level large-scale flagship stores to small-format very distinct mountain town shops. Key new store locations this quarter include our first apparel store in Milano and Stockholm.

We are also very excited about our forestall fracture opening in New York City in Q4, right on fifth Avenue at Lock Theater Center, one of the highest traffic shopping locations in the works.

Speaker #3: Arc'teryx stores continue to be critical to the growth strategy, especially how we engage with local consumers and the community. Arc'teryx opened seven net new stores in Q2, with twelve opening offset by the closure of five legacy locations as part of our ongoing strategy to optimize the quality and productivity of our store fleet.

In China, we opened our first brand stores and the iconic Peninsula hotel chain in Beijing.

<unk> represents our most elevated expression of the brand designed to port pump tier luxury shopping experiences.

For 2025, we continue to plan to open approximately 25 net new stores globally.

With the most coming in North America.

Our store opening plan incorporates a similar level of gross new stores added in 2024, partially offset by the closure of certain audits and other sub optimal location.

Speaker #3: Arc'teryx store expansion strategy includes a mix of different formats, ranging from multi-level large-scale alpha flagship stores to small-format, very distinct mountain town shops.

We believe our high quality retail network is much more important to long term success than chasing the fast paced start expansion.

Speaker #3: In this quarter, key new store locations include our first Arc'teryx stores in Milano and Stockholm. In North America, we opened a new mountain town shop at the Banff Resort in Canada.

In greater China.

We are focused on optimizing our carriage retail footprint, rather than pushing new store expansion.

Jie Zheng: In North America, we opened a new mountain town shop at the Banff Resort in Canada, which has been experiencing strong traffic since opening in April. It has been one of the top-performing shops in the region, another proof point that Arc'teryx can be relevant year-round, even in summer. We opened a new flagship in Vancouver on Robson Street, the best location in the city, with excellent performance since opening in July. We are also very excited about our first store flagship opening in New York City in Q4, right on Fifth Avenue at Rockefeller Center, one of the highest traffic shopping locations in the world. In China, we opened our first brand store in the iconic Peninsula Hotel chain in Beijing. The store represents our most elevated expression of the brand, designed for top-tier luxury shopping experiences.

Speaker #3: Which has been experiencing strong traffic since opening in April. It has been one of the top-performing shops in the region. Another proof point that Arc'teryx can be relevant year-round, even in summer.

This year our tariff.

So we'll have Nestor coger in greater China, including some legacy partner stores and the factory outlets. However, tariffs will still meaningful increases pricing in China with large format high quality more productive locations.

Speaker #3: We opened a new flagship in Vancouver on Robson Street, the best location in the city, with excellent performance since opening in July. We are also very excited about our first flagship store opening in New York City in Q4.

Looking ahead to 2026, we are planning for tariffs to have net store openings in China.

After years of recognizing the store fleet in that region.

Community engagement remains critical to elevating our Paris brand awareness.

Speaker #3: Right on 5th Avenue at Rockefeller Center, one of the highest traffic shopping locations in the world. In China, we opened our first brand stores in the iconic Peninsula Hotel chain in Beijing.

In July we host the 14th annual Paris Academy in Chamonix, France, drawing thousands of participants from around the world to our climbing Phoenix and also drove strong sales to our local shops.

Speaker #3: The store represents our most elevated expression of the brand, designed for top-tier luxury shopping experiences. For 2025, we continue to plan to open approximately 25 net new Arc'teryx stores globally.

Community engagement activities during Q2, including the fifth of tariffs climbing academy in lung their value in the UK and our Aurora ice climbing event in the San Francisco Bay area.

Jie Zheng: For 2025, we continue to plan to open approximately 25 net new apparel stores globally, with the most coming in North America. Our store opening plan incorporates a similar level of growth in new stores as in 2024, partially offset by the closure of certain outlets and other suboptimal locations. We believe our high-quality retail network is much more important to long-term success than chasing the fast-paced store expansion. In Greater China, we are focused on optimizing our Arc'teryx retail footprint rather than pushing new store expansion. This year, Arc'teryx will have net store closures in Greater China, including some legacy partner stores and the factory outlets. However, Arc'teryx will still meaningfully increase its presence in China with large-format, high-quality, more productive locations. Looking ahead to 2026, we are planning Arc'teryx to have net store opening in China, after years of rationalizing the store fleet in that region.

Speaker #3: With the most coming in North America, our store opening plan incorporates a similar level of gross new stores as in 2024, partially offset by the closure of certain outlets and other suboptimal locations.

Shifting to product.

Footwear continued to be active parties growing category in Q2 growing faster than the brand overall, despite comparing against triple digit growth last year.

Speaker #3: We believe a high-quality retail network is much more important to long-term success than chasing the fast-paced store expansion. In Greater China, we are focused on optimizing the Arc'teryx retail footprint rather than pushing new store expansion.

This spring we launched the borrowing early for an elevation of the most popular model made for long distance mountain renting.

We also launched a vertex b, which is the mountain running shoe designed to climb through technical vertical Terry.

Speaker #3: This year, Arc'teryx will have net store closures in Greater China, including some legacy partner stores and factory outlets. However, Arc'teryx will still meaningfully increase its presence in China with large format, high-quality, more productive locations.

Looking forward, our tariffs had an exciting pipeline for shoe launch in the second half of 2025 and have continued to believe footwear will be a large and profitable growth Avenue.

Terrorists.

Women also continued great momentum in Q2 with double digit growth across all regions outperforming the brand overall.

Speaker #3: Looking ahead to 2026, we are planning Arc'teryx to have net store openings in China. After years of rationalizing the store fleet in the region, community engagement remains critical to elevating Arc'teryx brand awareness.

We see a big opportunity to sort of winning in the outdoor differently through clinical design and the performance.

Jie Zheng: Community engagement remains critical to elevating Arc'teryx brand awareness. In July, we hosted the 14th Annual Arc'teryx Academy in Chamonix, France, drawing thousands of participants from around the world to our climbing clinics and also doing strong sales to our local shops. Community engagement activities during Q2 included the fifth Arc'teryx Climbing Academy in Longdale Valley in the UK and our All Rides Climbing event in the San Francisco Bay Area. Shifting to product, footwear continues to be Arc'teryx's fastest growing category in Q2, growing faster than the brand overall despite comparing against triple-digit growth last year. This spring, we launched the Arc'teryx Doran LD4, an elevation of the most popular model made for long-distance mountain running. We also launched the Vertex 3, which is a mountain running shoe designed to climb through technical vertical terrain.

A great example of our design folks are women is the clock here pen, which has continued to see explosive growth in Q2.

Speaker #3: In July, we hosted the 14th annual Arc'teryx Academy in Chamonix, France, drawing thousands of participants from around the world to our climbing clinics and also achieving strong sales for our local shops.

Stocking out quickly across store and e-commerce.

Kurt it's facing rising brand awareness and affinity with women in the U S and Europe as we have improved the fifth time in the functions.

Speaker #3: Community engagement activities during Q2 include the fifth Arc'teryx Climbing Academy in Longdale Valley, UK, and our All-Rise Climbing event in the San Francisco Bay Area.

Moving to the outdoor performance, which delivered an outstanding quarter led by sentiment footwear and apparel.

Solomon brand momentum continues to accelerate across all regions with very strong momentum in both Spotify and the performance side.

Speaker #3: Shifting to product, footwear continues to be Arc'teryx's fastest-growing category in Q2. It is growing faster than the brand overall, despite comparing against triple-digit growth last year.

By region Solomon softness continued very strong growth in greater China, and the APAC, where our growth in both email and America accelerated meaningfully.

Speaker #3: This spring, we launched the Nolan LD4, an elevation of the most popular model made for long-distance mountain running. We also launched the Vertex 3, which is a mountain running shoe designed to climb through technical vertical terrain.

Direct to consumer remained the fastest growing channel for the brand, including a 28% on the account with strength in both stores and E Commerce.

In addition to sneakers.

Speaker #3: Looking forward, Arc'teryx has an exciting pipeline for shoe launches in the second half of 2025. We continue to believe footwear will be a large and profitable growth avenue for Arc'teryx.

Jie Zheng: Looking forward, Arc'teryx has an exciting pipeline for shoe launch in the second half of 2025, and I continue to believe footwear will be a large and profitable growth avenue for Arc'teryx. Women's also continues great momentum in Q2 with double-digit growth across all regions, outperforming the brand overall. We see a big opportunity to serve women in the outdoor differently through pinnacle design and performance. A great example of our design focus on women's is the Arc'teryx Atom, which has continued to see explosive growth in Q2, stocking out quickly across store and e-commerce. Arc'teryx is experiencing rising brand awareness and affinity with women in the U.S. and Europe, as we have improved the fit style and function.

Apparel bags and socks are also experiencing great momentum, especially as Saddam on running best.

Spotify is doing very well globally and to continue to lead footwear grows the momentum of our first ever global footwear launch of the XD Whisper from Q1 continued into Q2, and especially resonating with younger female consumers.

Speaker #3: Women's continued great momentum in Q2 with double-digit growth across all regions, outperforming the brand overall. We see a big opportunity to serve women in the outdoor differently through pinnacle design and performance.

On the performance side, we are very pleased with our new aircrafts III rent issue one of the best footwear launch in <unk> history.

Speaker #3: A great example of our design focused on women is the Clarke pant, which has continued to see explosive growth in Q2. It is stocking out quickly across stores and e-commerce.

Including traction in the run specialty channel.

<unk> uses a form called optical Evo, which we believe represent a disruptive new generation material offering the runner a new level of rebound and account for running unload all trial.

Speaker #3: Arc'teryx is experiencing rising brand awareness and affinity with women in the U.S. and Europe, as we have improved the fit, style, and function. Moving to the outdoor performance segment, which delivered an outstanding quarter led by settlement footwear and apparel.

In May we launched our new global line, which offers consumers a more versatile than ever running shoes that are performed great on various type of Terry.

Jie Zheng: Moving to the outdoor performance segment, which delivered an outstanding quarter led by Salomon Footwear and Apparel, Salomon brand momentum continues to accelerate across all regions, with very strong momentum in both sports style and the performance line. By region, Salomon's soft goods continue very strong growth in Greater China and the APAC, where growth in both EMEA and America accelerates meaningfully. Direct-to-consumer remains the fastest-growing channel for the brand, including a 28% omni-channel with strength in both stores and e-commerce. In addition to sneakers, Salomon apparel, bags, and socks are also experiencing great momentum, especially Salomon running vests. Sports style is doing very well globally and continues to lead footwear growth. The momentum of our first-ever global footwear launch of the XT-6 Expanse from Q1 continues into Q2 and is especially resonating with younger female consumers.

Speaker #3: Settlement brand momentum continues to accelerate across all regions, with very strong momentum in both sports style and the performance line. By region, settlement soccer continues strong growth in Greater China and the APAC, while growth in both email and America accelerates meaningfully.

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Well, it's still there.

Very small our global line is seeing strong early response from consumers and the retailers.

Another key launch for the quarter was the ex onshore five there.

Speaker #3: Direct-to-consumer remains the fastest-growing channel for the brand, including a 28% omnicom with strength in both sports and e-commerce. In addition to sneakers, settlement apparel, bags, and socks are also experiencing great momentum.

Latest update to our iconic X ultra high imports NIM for lightweight and the stability and upgrades tech knowledge.

Regionally EMEA has also experienced very strong consumer demand for Salomon sneakers with strong sell through Reorders and the pre orders driven by both performance and sports style.

Speaker #3: Especially settlement running vests. Sports style is doing very well globally and continues to lead footwear growth. The momentum of our first-ever global footwear launch of the XT Whisper from Q1 continues into Q2 and is especially resonating with younger female consumers.

In Asia direct to consumer continue to be the critical growth channel for Saddam was led by our highly productive Solomon complex shop format.

We opened 16 net yield solemnly shops in greater China this quarter <unk>.

Including both owned stores and department stores.

Speaker #3: On the performance side, we are very pleased with our new Aerocry 3 running shoe—one of the best footwear launches in settlement history, including traction in the run specialty channel.

Jie Zheng: On the performance side, we are very pleased with our new Aeroglide 3 running shoe, one of the best footwear launches in Salomon history, including traction in the running specialties channel. Aeroglide 3 uses a foam called Optifoam Evo, which we believe represents a disruptive new generation material, offering the runner a new level of rebound and comfort for running on road or trail. In May, we launched our new Gravel Line, which offers consumers a more versatile than ever running shoe that performs great on various types of terrain, from hard pavement to loose terrain in parks and on trails. While it is still very small, our Gravel Line is seeing strong early response from consumers and retailers. Another key launch for the quarter was the X Ultra 5, the latest update to our iconic X Ultra hiking boots, known for lightweight stability and upgraded technology.

Our total count to 234.

We are on track to reach approximately 290, <unk> Solomon shops in greater China. This year.

We believe Solomon has opportunity to grow to several hundred locations over time.

Speaker #3: Aerocry 3 uses a form called Optiform EVO, which we believe represents a disruptive new generation material, offering the runner a new level of rebound and comfort for running on road or trail.

We recently opened our second settlement fracture in Shanghai.

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<unk> hundred square foot pinnacle expression of the brand located in the French concession district known for its 14th shopping.

Speaker #3: In May, we launched our new Gravel line, which offers consumers a more versatile running shoe than ever before. This shoe performs great on various types of terrain, from hard pavement to loose terrain in parks and on trails.

<unk> level store offers a more immersive experience for consumers and it has performed very well in its first month.

In APAC, we opened 10, new sentiment scores in Q2, five in Korea, and <unk> in Japan, including Prime locations in the Milano Chief neighborhoods of Tokyo, and <unk> being sold.

Speaker #3: While it's still very small, our Gravel line is seeing a strong early response from consumers and retailers. Another key launch for the quarter was the X Ultra 5, the latest update to our iconic X Ultra hiking boots, known for their lightweight stability and upgraded technology.

Overall awareness and the demand for Salomon footwear is rapidly growing across Asia.

In the Americas, we continue to lay the groundwork to support significant future growth and the settlement southwest grow strong double digits in Q2.

Speaker #3: Regionally, email is also experiencing very strong consumer demand for settlement sneakers, with strong sales through reorders and pre-orders driven by both performance and sports style.

Jie Zheng: Originally, email also experienced very strong consumer demand for Salomon sneakers, with strong sales through reorders and preorders driven by both performance and sports style. In Asia, direct-to-consumer continues to be the critical growth channel for Salomon, led by our highly productive Salomon compact shop format. We opened 16 net new Salomon shops in Greater China this quarter, including both owned stores and partner stores, bringing our total count to 234. We are on track to reach approximately 290 Salomon shops in Greater China this year, and we believe Salomon has the opportunity to grow to several hundred locations over time. We recently opened our second Salomon flagship in Shanghai, a 7,300-square-foot pinnacle expression of the brand, located in the French Concession district, known for its boutique shopping. The street-level store offers a more immersive experience for consumers and has performed very well in its first month.

Our first U S store in New York City continues to show incredible traction with our consumers and we plan to open three to four more in the Greater New York area. This year or early next year.

Speaker #3: In Asia, direct-to-consumer continues to be the critical growth channel for settlement, led by our highly productive settlement compact shop format. We opened the 16th net new settlement shop in Greater China this quarter.

As well as continue to expand our presence in key wholesale accounts.

New locations this fall, including Woodbury Commons and winning spirit broken. We are also opening stores in Chicago and the West Hollywood This year and it will focus on San Francisco, the centers and EMEA Army in 2026.

Speaker #3: Including both owned stores and partner stores, we are bringing our total count to 234. We are on track to reach approximately 290 settlement shops in Greater China this year.

Speaker #3: And we believe settlement has the opportunity to grow to several hundred locations over time. We recently opened our second settlement flagship in Shanghai, a seven thousand three hundred square foot pinnacle expansion of the brand.

And from a wholesale perspective suddenly is seeing growing demand across a variety of retailers, including ITI north stream and the real specialty shops.

Lastly, as we continue to elevate settlements brand awareness, we are excited about upcoming millennial Cortina RMP well settlement is a premium partners offsetting all volunteers this will be an.

Speaker #3: Located in the French Concession district, known for its boutique shopping, the Sea Level store offers a more immersive experience for consumers and has performed very well in its first month.

Especially important moment for the brand.

Speaker #3: In APAC, we opened 10 new settlement stores in Q2: five in Korea and five in Japan. This includes prime locations in the Marunouchi neighborhood of Tokyo and Seongsi in Seoul.

Jie Zheng: In APAC, we opened 10 new Salomon stores in Q2, five in Korea and five in Japan, including prime locations in the Marunouchi neighborhood of Tokyo and Seongsu in Seoul. Overall awareness and demand for Salomon footwear is rapidly growing across Asia. In the Americas, we continue to lay the groundwork to support significant future growth, and Salomon's soft goods grow strong double digits in Q2. Our first U.S. store in New York City continues to show incredible traction with our consumers. We plan to open three to four more in the Greater New York area this year or early next year, as well as continue to expand our presence in key wholesale accounts. New locations this quarter include Woodbury Commons and Williamsburg, Brooklyn. We are also opening stores in Chicago and West Hollywood this year. We are focused on San Francisco, Los Angeles, and Miami in 2026.

Some markets of the Europe.

Before I discuss are in Iraq as highlights let me cover the Western management transition.

As you saw on our press release do duty has decided to step down as president and CEO of worsen to pursue her new endeavors outside our company.

Speaker #3: Overall awareness and demand for settlement footwear is rapidly growing across Asia. In the Americas, we continue to lay the groundwork to support significant future growth.

Our group CFO, Andrew page has been appointed interim president and CEO of Wesson and boy in Iraq as segment and will continue in his current role as Amer sports CFO.

Speaker #3: And the settlement in soccer grows strong double digits in Q2. Our first U.S. store in New York City continues to show incredible traction with our consumers, and we plan to open three to four more in the Greater New York area this year or early next year.

The company has begun a comprehensive search for the next where some leader.

We are grateful for Joe Doody, 30 year of service at Western and wish him well as he begins a new chapter.

Speaker #3: As well as continue to expand our presence in key wholesale accounts. New locations this fall include Woodbury Commons and Williamsburg, Brooklyn. We are also opening stores in Chicago and West Hollywood this year.

This contribution has been critical to the brand's success.

Especially the last six years as CEO.

Looking forward I have full confidence in Andrew page to lead where some during this transition. We have also continued to execute this.

Speaker #3: And we are focused on San Francisco, Los Angeles, and Miami in 2026. From a wholesale perspective, settlement is seeing growing demand across a variety of retailers, including IEI, Nord Stream, and the run specialty shops.

Sponsor ability as Amer sport CFO.

Jie Zheng: From a wholesale perspective, Salomon is seeing growing demand across a variety of retailers, including IGI, Nordstrom, and the run specialty shops. Lastly, as we continue to elevate Salomon's brand awareness, we are excited about the upcoming Milano Cortina Olympics, where Salomon is a premium partner, outfitting all volunteers. This will be an especially important moment for the brand in its home market of Europe. Before I discuss ball and racket highlights, let me cover the Wilson management transition. As you saw on our press release, Joe Dooley has decided to step down as President and CEO of Wilson to pursue new endeavors outside the company. Our Group CFO, Andrew Page, has been appointed interim President and CEO of Wilson and the ball and racket segment, and will continue in his current role as Amer Sports CFO. The company has begun a comprehensive search for the next Wilson leader.

Now to the point of record segment.

Paul and the rapid growth trends continued to be solid in Q2, with 11% growth driven by strength in sportswear and a record for us.

Speaker #3: Lastly, as we continue to elevate Settlement's brand awareness, we are excited about the upcoming Milano Cortina Olympics, where Settlement is a premium partner, outfitting all volunteers.

Our tenants 360 continues to resonate very well with consumers from performing wreckage to soft goods.

On costs, we are thrilled by the recent wind by 18 year old Canadian Victoria and bulk both at the National Bank opening in Montreal.

Speaker #3: This will be an especially important moment for the brand in its home markets of Europe. Before I discuss board and racket highlights, let me cover the Western management transition.

She is our first ever worsening head to toe, Tennessee, 360, <unk> to win Wth, when South <unk> tournament and there is now ranking in the top 25 of the work.

Speaker #3: As you saw in our press release, Jie Zheng has decided to step down as President and CEO of Western to pursue new endeavors outside the company.

Will consumers, whereas the performance records continue to shine, including the successful launch our largest federal classic collections this quarter.

Speaker #3: Our group CFO, Andrew Page, has been appointed interim president and CEO of Western and the Board and Racket segment, and will continue in his current role as Amer Sports CFO.

In Pitbull, we are also experiencing strong response to our vesper Petr.

Speaker #3: The company has begun a comprehensive search for the next Western Leader. We are grateful for Jie Zheng's 30 years of service at Western and wish him well as he begins a new chapter.

We're seeing softness continued its excellent dose more than doubling in Q2 2025.

Jie Zheng: We are grateful for Joe Dooley's 30 years of service at Wilson and wish him well as he begins a new chapter. His contribution has been critical to the brand's success, especially the last six years as CEO. Looking forward, I have full confidence in Andrew Page to lead Wilson during this transition, where he also continues to execute his responsibility as Amer Sports CFO. Now to the ball and racket segment. Ball and racket growth trends continue to be solid in Q2, with 11% growth driven by strength in sportswear and racket sports. Our Tennis 360 continues to resonate very well with consumers, from performing rackets to soft goods.

We continue to see a strong response to the inkjet women's tennis shoe, which was recently chosen as the best New tennis shoes by women Health magazine.

Speaker #3: His contribution has been critical to the brand's success, especially over the last six years as CEO. Looking forward, I have full confidence in Andrew Page to lead Western during this transition while also continuing to execute his responsibilities as Amer Sports CFO.

We also continued to excel in China, and it will open approximately 50 more worse in Tennessee, a 160 shops in China. This year.

In North America, the new Tennessee hedged 60 concept store in the Dallas North Park Mall continues to perform very well.

Speaker #3: Now to the board and racket segment. Board and racket growth trends continue to be solid in Q2, with 11% growth driven by strength in sportswear and racket stores.

And we are excited about our new shop in Beverly Hills, and we continue to expand our Tennessee hundred 60 tests at Dick's Sporting goods and other retail partners.

Speaker #3: Our tennis 360 continues to resonate very well with consumers, from performing rackets to soft goods. On a quote, we are thrilled by the recent win by 18-year-old Canadian Victoria Bockhoe at the National Bank Opening in Montreal.

Beyond the wreckage course solid trends in baseball bat or offset by soft sales in growth in <unk> and the cough.

Jie Zheng: On court, we are thrilled by the recent win by 18-year-old Canadian Victoria Embarkow at the National Bank Open in Montreal. She is our first-ever Wilson head-to-toe Tennis 360 athlete to win a WTA 1000 tournament and is now ranked in the top 25 of the world. With consumers, Wilson performance rackets continue to shine, including the successful launch of our larger Federer Classic collections this quarter. In pickleball, we are also experiencing strong response to our Westbrook pattern. Wilson soft goods continues its excellent growth, more than doubling in Q2 2025. We continue to see a strong response to the Intric Women's tennis shoe, which was recently chosen as the best new tennis shoe by Women's Health magazine. We also continue to excel in China and will open approximately 50 more Wilson Tennis 360 shops in China this year.

Now I will turn to over to Andrew.

Thanks, James I will discuss tariffs in more detail when I provide guidance, but I want to start by saying that we are very confident that our fundamental business momentum.

Speaker #3: She's our first-ever Western head-to-toe tennis 360 athlete to win a WTA 1000 tournament and is now ranked in the top 25 of the world.

Diverse global footprint clean balance sheet, and strong brand portfolio with pricing power will give us significant flexibility to manage through a variety of tariff scenarios.

Speaker #3: With consumers, Western performance rackets continue to shine, including the successful launch of a larger Federal Classic collection this quarter. In pickleball, we are also experiencing a strong response to our Westbrook pattern.

More importantly, the inflection of Solomon footwear as a strong second leg of growth to our Texas already exceptional sales and margin trajectory significantly elevated into long term value creation potential of our unique brand portfolio.

Speaker #3: Western soccer continues its excellent growth, more than doubling in Q2 2025. We continue to see a strong response to the interest in women's tennis shoes, which was recently chosen as the Best New Tennis Shoe by Women's Health magazine.

Given our strong first half results and continued operating and financial momentum.

And despite higher tariffs and assumed in our previous guidance, we are raising our full year revenue and EPS expectations.

Speaker #3: We also continue to excel in China and will open approximately 50 more Western Tennis 360 shops in China this year. In North America, the new Tennis 360 concept store in the Dallas North Park Mall continues to perform very well.

This updated guidance assumes the current 30% U S tariff on goods from China and that the latest tariff rates on all other countries will stay in place for the remainder of 2025.

Jie Zheng: In North America, the new Tennis 360 concept store in the Dallas North Park Mall continues to perform very well, and we are excited about our new shop in Beverly Hills. We continue to expand our Tennis 360 test at Dick's Sporting Goods and other retail partners. Beyond the racket sport, solid trends in baseball bats were offset by soft sales in gloves, inflatables, and golf. Now, I will turn it over to Andrew.

Although the impact of higher tariffs are a ball and racquet segment will be slightly higher than expected given the mitigation strategies already underway across brands, we still expect negligible tariff impact to our consolidated results this year and beyond.

Speaker #3: And we are excited about our new shop in Beverly Hills. We continue to expand our Tennis 360 test at Dick's Sporting Goods and other retail partners.

Okay, Let's go through Q2 results.

Speaker #3: Beyond the racket sports, solid trends in baseball bats were offset by soft sales in gloves, in face gloves, and in golf. Now, I will turn it over to Andrew.

Amyris sports grew sales, 23% in Q2 on a reported basis or 22% excluding currency the.

The strong sales performance was led by outdoor performance followed by a technical apparel and bottling racket also continued to deliver solid growth in the quarter.

Speaker #4: Thanks, James. I will discuss tariffs in more detail when I provide guidance, but I want to start by saying that we are very confident that our fundamental business momentum, diverse global footprint, clean balance sheet, and strong brand portfolio with pricing power will give us significant flexibility to manage through a variety of tariff scenarios.

Andrew Page: Thanks, James. I will discuss tariffs in more detail when I provide guidance, but I want to start by saying that we are very confident that our fundamental business momentum, diverse global footprint, clean balance sheet, and strong brand portfolio with premium brand pricing power will give us significant flexibility to manage through a variety of tariff scenarios. More importantly, the inflection of Salomon footwear adds a strong second leg of growth to Arc'teryx's already exceptional sales and margin trajectory, significantly elevating the long-term value creation potential of our unique brand portfolio. Given our strong first half results and continued operating and financial momentum, and despite higher tariffs than assumed in our previous guidance, we are raising our full-year revenue and adjusted EPS expectations. This updated guidance assumes the current 30% U.S.

By channel.

The group continues to be driven by DTC, which grew 40% led by Salomon in greater China, and APAC as well as our terex globally.

Wholesale grew 9% at the group level led by Solomon.

Regional growth was led by Asia Pacific, which increased 45% and China, which grew 42% EMEA.

Speaker #4: More importantly, the inflection of settlement footwear adds a strong second leg of growth to Arc'teryx's already exceptional sales and margin trajectory, significantly elevating the long-term value creation potential of our unique brand portfolio.

EMEA accelerated to 18% growth in the Americas grew 6% in Q2.

The Americas deceleration was driven by normalizing growth in Boston Racquet, and a tougher comparison due to the shift in wholesale shipments from Q3 into Q2 in 2024.

Speaker #4: Given our strong first-half results and continued operating and financial momentum, and despite higher tariffs than assumed in our previous guidance, we are raising our full-year revenue and EPS expectations.

AMR sports continues to achieve very strong growth in China and there are several reasons why we are confident in our future growth opportunities in this important consumer market.

Speaker #4: This updated guidance assumes the current 30% U.S. tariff on goods from China and that the latest tariff rates on all other countries will stay in place for the remainder of 2025.

Andrew Page: tariff on goods from China and that the latest tariff rates on all other countries will stay in place for the remainder of 2025. Although the impact of higher tariffs to our ball and racket segment will be slightly higher than expected, given the mitigation strategies already underway across brands, we still expect negligible tariff impact to our consolidated results this year and beyond. Let's go through Q2 results. Amer Sports Inc. grew sales 23% in Q2 on a reported basis, or 22% excluding currency. The strong sales performance was led by outdoor performance, followed by technical apparel, and ball and racket also continued to deliver solid growth in the quarter. By channel, the group continued to be driven by D2C, which grew 40% led by Salomon in Greater China and APAC, as well as Arc'teryx globally. Wholesale grew 9% at the group level, led by Salomon.

Number one.

Our brands compete in one of the highest quality fastest growing consumer segments in China, the premium sports and outdoor market.

Speaker #4: Although the impact of higher tariffs on our ball and racket segment will be slightly higher than expected, given the mitigation strategies already underway across brands, we still expect negligible tariff impact to our consolidated results this year and beyond.

The outdoor trend in China continues to be very robust attracting younger consumers female consumers and luxury shoppers.

Additionally, our authentic brands are known for their expertise quality and technical innovation, which resonates well with Chinese consumers and our brands are still small in China.

Speaker #4: Okay, let's go through Q2 results. Amer Sports grew sales 23% in Q2 on a reported basis, or 22% excluding currency. The strong sales performance was led by outdoor performance, followed by technical apparel.

Third and most important we have a great team in China, our deep expertise and unique scalable operating platform gives us a significant competitive advantage across the portfolio.

Speaker #4: And ball and racket also continued to deliver solid growth in the quarter. By channel, the group continued to be driven by D2C, which grew 40%, led by settlement in Greater China and APAC, as well as Arc'teryx globally.

Turning to profitability adjusted gross margin increased 250 basis points to 58, 7% in Q2, primarily driven by favorable channel and geographic product and brand mix as well as by lower discounts compared to the prior year and partially offset by the headwinds.

Speaker #4: Wholesale grew 9% at the group level, led by settlement. Regional growth was led by Asia Pacific, which increased 45%, and China, which grew 42%.

Andrew Page: Regional growth was led by Asia Pacific, which increased 45%, and China, which grew 42%. AMEA accelerated to 18% growth, and the Americas grew 6% in Q2. The Americas deceleration was driven by normalizing growth in ball and racket and a tougher comparison due to the shift in wholesale shipments from Q3 into Q2 in 2024. Amer Sports Inc. continues to achieve very strong growth in China, and there are several reasons why we are confident in our future growth opportunities in this important consumer market. Number one, our brands compete in one of the highest quality, fastest growing consumer segments in China, the premium sports and outdoor market. The outdoor trend in China continues to be very robust, attracting younger consumers, female consumers, and luxury shoppers.

In transportation logistics and materials.

Adjusted SG&A expenses as a percentage of revenues Deleveraged by 140 basis points and represented 54, 7% of revenues in Q2.

Speaker #4: A mere accelerated to 18% growth, and the Americas grew 6% in Q2. The Americas' deceleration was driven by normalizing growth in ball and racket and a tougher comparison due to the shift in wholesale shipments from Q3 into Q2 in 2024.

Outdoor performance achieve SG&A leverage on very strong growth, which was offset by slight deleverage of technical apparel due to retail expansion and Bala racket due to ongoing investments in sportswear.

Speaker #4: Amer Sports continues to achieve very strong growth in China, and there are several reasons why we are confident in our future growth opportunities in this important consumer market.

Led by gross margin expansion, we generated 260 basis point increase in our adjusted operating margin from two 9% last year to five 5% in Q2.

Speaker #4: Number one, our brands compete in one of the highest quality, fastest growing consumer segments in China: the premium sports and outdoor market. The outdoor trend in China continues to be very robust, attracting younger consumers, female consumers, and luxury shoppers.

Note that we received $19 million of government grants in the second quarter of 2025, which we received in the second half of 2024.

This benefited adjusted operating margin by approximately 150 basis points in Q2.

Speaker #4: Additionally, our authentic brands are known for their expertise, quality, and technical innovation, which resonates well with Chinese consumers. Our brands are still small in China.

Andrew Page: Additionally, our authentic brands are known for their expertise, quality, and technical innovation, which resonates well with Chinese consumers, and our brands are still small in China. Third, most important, we have a great team in China. Our deep expertise and unique scalable operating platform give us a significant competitive advantage across the portfolio. Turning to profitability, adjusted gross margin increased 250 basis points to 58.7% in Q2, primarily driven by favorable channel, geographic, product, and brand mix, as well as by lower discounts compared to the prior year and partially offset by the headwinds in transportation, logistics, and materials. Adjusted SG&A expenses as a percentage of revenues deleveraged by 140 basis points and represented 54.7% of revenues in Q2.

Corporate expenses were $34 million up from $25 million in Q2 last year.

DNA was $81 million, which includes $39 million of Aro <unk> depreciation.

Speaker #4: Third most importantly, we have a great team in China. Our deep expertise and unique scalable operating platform give us a significant competitive advantage across the portfolio.

Adjusted net finance cost in the quarter was $22 million comprised of $30 million of interest expense, partially offset by $8 million of FX gains on the re measurement of certain monetary assets.

Speaker #4: Turning to profitability, adjusted gross margin increased 250 basis points to 58.7% in Q2, primarily driven by a favorable channel, geographic, product, and brand mix, as well as by lower discounts compared to the prior year, and partially offset by the headwinds in transportation logistics and materials.

In the quarter, our adjusted income tax expense was $5 million, which equates to an adjusted effective tax rate of 12%.

A discrete item related to a return to provision adjustment benefited our ETR in Q2.

Adjusted net income in Q2 was $36 million compared to $25 million in the prior year.

Speaker #4: Adjusted SG&A expenses as a percentage of revenues deleveraged by 140 basis points and represented 54.7% of revenues in Q2. Outdoor performance achieved SG&A leverage on very strong growth, which was offset by slight deleverage in technical apparel due to retail expansion and ball and racket due to ongoing investments in sportswear.

Adjusted diluted earnings per share was <unk> <unk> compared to adjusted diluted earnings per share of <unk> last year.

Andrew Page: Outdoor performance achieved SG&A leverage on very strong growth, which was offset by slight deleverage at technical apparel due to retail expansion and ball and racket due to ongoing investments in sportswear. Led by gross margin expansion, we generated a 260 basis point increase in our adjusted operating margin from 2.9% last year to 5.5% in Q2. Note that we received $19 million of government grants in the second quarter of 2025, which were received in the second half of 2024. This benefited adjusted operating margin by approximately 150 basis points in Q2. Corporate expenses were $34 million, up from $25 million in Q2 last year. D&A was $81 million, which includes $39 million of ROU depreciation. Adjusted net finance cost in the quarter was $22 million, comprised of $30 million of interest expense, partially offset by $8 million of FX gains on the remeasurement of certain monetary assets.

Now turning to segment results.

Technical apparel revenues increased 23% to $509 million led by our parents.

Both was fueled by 31% DTC expansion, including a 15% omnicom.

Speaker #4: Led by growth margin expansion, we generated a 260 basis point increase in our adjusted operating margin, from 2.9% last year to 5.5% in Q2.

Solid result, facing the toughest two year stacked comp comparison of 2025.

Lower levels of outlet sales had a negative impact on the technical apparel omnicom as our Terex continues to shift more focus on full price sales and limited online and in store outlet sales.

Speaker #4: Note that we received $19 million in government grants in the second quarter of 2025, which were received in the second half of 2024. This benefited adjusted operating margin by approximately 150 basis points in Q2.

<unk> momentum continues to be fueled by both new and existing consumers across all regions channels and product categories.

Speaker #4: Corporate expenses were $34 million, up from $25 million in Q2 last year. The NA was $81 million, which includes $39 million of ROU depreciation.

Nickel apparel wholesale revenues grew 4%.

Negatively impacted by a shift in shipments from Q3 into Q2 last year.

Speaker #4: Adjusted net finance costs in the quarter were $22 million, composed of $30 million in interest expense, partially offset by $8 million in foreign exchange gains from the remeasurement of certain monetary assets.

Regionally the technical apparel growth rate was led by Asia Pacific followed by greater China, The Americas and EMEA.

All regions grew strong double digits.

Speaker #4: In the quarter, our adjusted income tax expense was $5 million, which equates to an adjusted effective tax rate of 12%. A discrete item related to a return-to-provision adjustment benefited our ETR in Q2.

Andrew Page: In the quarter, our adjusted income tax expense was $5 million, which equates to an adjusted effective tax rate of 12%. A discrete item related to a return to provision adjustment benefited our ETR in Q2. Adjusted net income in Q2 was $36 million, compared to $25 million in the prior year. Adjusted diluted earnings per share was $0.06 compared to adjusted diluted earnings per share of $0.05 last year. Now turning to segment results, technical apparel revenues increased 23% to $509 million, led by our Arc'teryx. Growth was fueled by 31% D2C expansion, including a 15% omnicom, a solid result based on the toughest two-year stacked comp comparison of 2025. Lower levels of outlet sales had a negative impact on the technical apparel e-commerce, as Arc'teryx continues to shift more focus on full-price sales and limiting online and in-store outlet sales.

Technical apparel adjusted operating margin declined 10 basis points to 13, 9% a slight gross margin expansion and higher other operating income was offset by growing SG&A investments.

Speaker #4: Adjusted net income in Q2 was $36 million compared to $25 million in the prior year. Adjusted diluted earnings per share was $0.06 compared to adjusted diluted earnings per share of $0.05 last year.

Lastly, we recently entered into an asset purchase agreement to acquire substantially all of the assets and certain liabilities of Nelson Sports, Inc. The exclusive distributor for our Terex and valence products in Korea since 2001.

Speaker #4: Now turning to segment results. Technical apparel revenues increased 23% to $59 million, led by Arc'teryx. Growth was fueled by 31% D2C expansion, including a 15% omni-channel.

We expect the transaction to close in the second half of 2025, after which the country will be operated fully brand direct versus the traditional distributor model.

Korea is a large sport and luxury consumer market still with strong growth potential for our church.

Speaker #4: A solid result facing the toughest two-year stacked comp comparison of 2025. Lower levels of outlet sales had a negative impact on the technical apparel omnicom as Arc'teryx continues to shift more focus on full-price sales and limiting online and in-store outlet sales.

Moving to outdoor performance segment, which saw revenues increased 35% to $414 million driven by very strong performance in Solomon footwear apparel and bags and socks.

By channel outdoor performance D to C grew 63% led by new doors, and higher productivity across markets, especially greater China and APAC.

Speaker #4: The D2C momentum continues to be fueled by both new and existing consumers across all regions, channels, and product categories. Technical apparel wholesale revenues grew 4%.

Andrew Page: The D2C momentum continues to be fueled by both new and existing consumers across all regions, channels, and product categories. Technical apparel wholesale revenues grew 4%, negatively impacted by a shift in shipments from Q3 into Q2 last year. Regionally, the technical apparel growth rate was led by APAC, followed by Greater China, the Americas, and EMEA. All regions grew strong double digits. Technical apparel adjusted operating margin declined 10 basis points to 13.9%, as slight gross margin expansion and higher other operating income was offset by growing SG&A investments. Lastly, we recently entered into an asset purchase agreement to acquire substantially all of the assets and certain liabilities of Nelson Sports Inc., the exclusive distributor for Arc'teryx and Valance products in Korea since 2001.

E. Com is also growing across regions driven by higher traffic.

Speaker #4: Negatively impacted by a shift in shipments from Q3 into Q2 last year. Regionally, the technical apparel growth rate was led by Asia Pacific, followed by Greater China, the Americas, and EMEA.

Wholesale grew 18% driven by strong sell through and Reorders and soft goods.

Regionally the outdoor performance growth rate was led by greater China, and APAC, followed by accelerating growth in both EMEA and Americas.

Speaker #4: All regions grew strong double digits. The Technical Apparel adjusted operating margin declined 10 basis points to 13.9%, as slight growth in margin expansion and higher other operating income was offset by growing SG&A investments.

As James alluded to the popularity of Solomon footwear is inflicting globally, and we are well positioned to appropriately and fully develop this unique opportunity over time.

We believe we have very significant growth opportunities in all three major consumer regions and have the right talent and team structure in place were taking meaningful share of the global sneaker market over time.

Speaker #4: Lastly, we recently entered into an asset purchase agreement to acquire substantially all of the assets and certain liabilities of Nelson Sports Inc., the exclusive distributor for Arc'teryx and Valence products in Korea since 2001.

For our winter sports equipment brands, while Q2 is by far the smallest quarter of the year, we have solid preorders for the upcoming winter season, as we continue to take market share in skiing.

Speaker #4: We expect the transaction to close in the second half of 2025, after which the country will be operated fully brand direct versus a traditional distributor model.

Andrew Page: We expect the transaction to close in the second half of 2025, after which the country will be operated fully brand direct versus a traditional distributor model. Korea is a large sport and luxury consumer market, still with strong growth potential for Arc'teryx. Moving to the outdoor performance segment, which saw revenues increase 35% to $414 million, driven by very strong performance in Salomon footwear, apparel, and bags and socks. By channel, outdoor performance D2C grew 63%, led by new doors and higher productivity across markets, especially Greater China and APAC. E-commerce is also growing across regions, driven by higher traffic. Wholesale grew 18%, driven by strong sell-through and reorders in soft goods. Regionally, the outdoor performance growth rate was led by Greater China and APAC, followed by accelerating growth in both EMEA and Americas.

We also see growth opportunities in both snowboarding and protective equipment.

Speaker #4: Korea, as a large sport and luxury consumer market, still has strong growth potential for Arc'teryx. Moving to the outdoor performance segment, we saw revenues increase 35% to $414 million, driven by a very strong performance in settlement footwear, apparel, bags, and socks.

When a sports equipment is expected to represent only 28% of the outdoor performance segment in 2025 down from 46% in 2022.

Outdoor performance adjusted operating profit margin expanded 720 basis points from last year to five 1% in Q2.

Margin expansion was led by gross margin, thanks to positive channel region and product mix as well as favorable product costs due to our footwear our cost optimization initiatives.

Speaker #4: By channel, outdoor performance D2C grew 63%, led by new doors and higher productivity across markets, especially Greater China and APAC. E-commerce is also growing across regions, driven by higher traffic.

This margin expansion was also driven by SG&A leverage on very strong revenue growth.

Speaker #4: Wholesale grew 18%, driven by strong sell-through in reorders and soft goods. Regionally, the outdoor performance growth rate was led by Greater China and APAC, followed by accelerating growth in both EMEA and the Americas.

Before I get into the results of fallen racket I'd like to thank Joe duty and acknowledges distinguished 30 year career with <unk> sports and the Wilson franchise, Joe was instrumental in many key achievements of the brand. Most recently growing the brand to over $1 billion in annual revenues and setting the stage for its next growth.

Speaker #4: As James alluded to, the popularity of settlement footwear is inflecting globally, and we are well positioned to appropriately and fully develop this unique opportunity over time.

Andrew Page: As James alluded to, the popularity of Salomon footwear is inflecting globally, and we are well positioned to appropriately and fully develop this unique opportunity over time. We believe we have very significant growth opportunities in all three major consumer regions and have the right talent and team structure in place to take a meaningful share of the global sneaker market over time. For our winter sports equipment brands, while Q2 is by far the smallest quarter of the year, we have solid preorders for the upcoming winter season as we continue to take market share in skiing. We also see growth opportunities in both snowboarding and protective equipment. Winter sports equipment is expected to represent only 28% of the outdoor performance segment in 2025, down from 46% in 2022. Outdoor performance adjusted operating profit margin expanded 720 basis points from last year to 5.1% in Q2.

Inflection driven by Tennessee 360.

Now moving to results.

While the racket revenue increased 11% to $314 million driven by soft goods and racquet sports. We are pleased with the continued growth in Bala racket, but would caution that double digit growth is not sustainable long term and we continue to expect ball a racket to grow low to mid single digits long term.

Speaker #4: We believe we have very significant growth opportunities in all three major consumer regions and have the right talent and team structure in place to take a meaningful share of the global sneaker market over time.

Speaker #4: For our winter sports equipment brands, while Q2 is by far the smallest quarter of the year, we have solid pre-orders for the upcoming winter season as we continue to take market share in skiing.

By category the growth was led by soft goods, which now represents approximately 15% of segment sales and also a racquet sports franchises.

Speaker #4: We also see growth opportunities in both snowboarding and protective equipment. Winter sports equipment is expected to represent only 28% of the outdoor performance segment in 2025, down from 46% in 2022.

We continue to see very strong momentum incentives 360 across the globe, especially in China.

Golf Inflatables and baseball were all down slightly.

Golf grew strong double digits in EMEA, but this was offset by lower sell in in the U S.

Speaker #4: Outdoor performance adjusted operating profit margin expanded 720 basis points from last year to 5.1% in Q2. Margin expansion was led by gross margin, thanks to positive channel, region, and product mix, as well as favorable product costs due to our footwear cost optimization initiatives.

However for H, one overall golf had solid growth.

The inflatables market conditions are challenging and the weaker baseball glove sales are offsetting growth in batch.

Andrew Page: Margin expansion was led by gross margin thanks to positive channel, region, and product mix, as well as favorable product costs due to our footwear cost optimization initiatives. This margin expansion was also driven by SG&A leverage on very strong revenue growth. Before I get into the results of ball and racket, I would like to thank Joe Dooley and acknowledge his distinguished 30-year career with Amer Sports and the Wilson franchise. Joe was instrumental in many key achievements of the brand, most recently growing the brand to over $1 billion in annual revenues and setting the stage for its next growth inflection, driven by Tennis 360. Now moving to results. Ball and racket revenue increased 11% to $314 million, driven by soft goods and racket sports.

Regionally the ball and rapid growth rate was led by China, APAC and EMEA, while Americas was roughly flat.

Speaker #4: This margin expansion was also driven by SG&A leverage on very strong revenue growth. Before I get into the results of Ball and Racket, I'd like to thank Jie Zheng and acknowledge his distinguished 30-year career with Amer Sports and the Wilson franchise.

Following racket segment adjusted operating profit margin increased 200 basis points to three 1% due to higher gross margin driven by favorable product channel and region mix, which offset higher duties and slight SG&A deleverage like continued soft goods investment.

Speaker #4: Jie was instrumental in many key achievements of the brand, most recently growing the brand to over $1.1 billion in annual revenues and setting the stage for its next growth inflection, driven by Tennis 360.

Turning to the balance sheet, we ended the quarter was $640 million of net debt.

Using the midpoint of our 2025 of adjusted operating profit guidance on net debt to adjusted EBITDA ratio was approximately 0.6 times at the end of Q2.

Speaker #4: Now moving to results. Ball and racket revenue increased 11% to $344 million, driven by soft goods and racket sports. We are pleased with the continued growth in ball and racket, but we would caution that double-digit growth is not sustainable long term, and we continue to expect ball and racket to grow low to mid-single digits long term.

Our balance sheet is in a healthy position to support our company as we navigate tariffs and other external uncertainties.

Andrew Page: We are pleased with the continued growth in ball and racket, but would caution that double-digit growth is not sustainable long term, and we continue to expect ball and racket to grow low to mid-single digits long term. By category, the growth was led by soft goods, which now represents approximately 15% of segment sales and also our racket sports franchises. We continue to see very strong momentum in Tennis 360 across the globe, especially in China. Golf, inflatables, and baseball were all down slightly. Golf grew strong double digits in AMEA, but this was offset by lower sell-in in the U.S. However, for H1 overall, golf had solid growth. The inflatables market conditions are challenging, and the weaker baseball glove sales are offsetting growth in bats. Regionally, the ball and racket growth rate was led by China, APAC, and AMEA, while Americas was roughly flat.

Looking forward paying.

Paying down debt, which carries nondeductible interest remains an effective use of excess cash.

Speaker #4: By category, the growth was led by soft goods, which now represents approximately 15% of segment sales, and also our racket sports franchises. We continue to see very strong momentum in Tennis 360 across the globe, especially in China.

We exited the quarter with inventories up 29% year over year higher than our 23% sales growth, mainly driven by our terex. This.

This higher inventory is primarily driven by three factors one early receipt of fall 2025, merchandize, which included tariff mitigation tactics too tired goods in transit from lower airfreight usage, which means we carry the goods on our books much longer and three FX translation from the weak.

Speaker #4: Golf, inflatables, and baseball were all down slightly. Golf grew strong double digits in EMEA, but this was offset by lower sell-in in the U.S.

Speaker #4: However, for H1 overall, golf had solid growth. The inflatables market conditions are challenging, and the weaker baseball glove sales are offsetting growth in bats.

A U S dollar.

While we expect inventory growth to remain moderately elevated through the end of 2025, we are very comfortable with the quality of our terex as goods and expect to work it down and return to normal inventory growth rates as we progress through 2026.

Speaker #4: Regionally, the ball and racket growth rate was led by China, APAC, and EMEA, while the Americas was roughly flat. The ball and racket segment adjusted operating profit margin increased 200 basis points to 3.1% due to a higher gross margin driven by favorable product, channel, and region mix, which offset higher duties and slight SG&A deleverage on continued soft goods investments.

Andrew Page: Ball and racket segment adjusted operating profit margin increased 200 basis points to 3.1% due to higher gross margin driven by favorable product, channel, and region mix, which offset higher duties and slight SG&A deleverage on continued soft goods investment. Turning to the balance sheet, we ended the quarter with $640 million of net debt. Using the midpoint of our 2025 adjusted operating profit guidance, our net debt/EBITDA ratio was approximately 0.6 times at the end of Q2. Our balance sheet is in a healthy position to support our company as we navigate tariff and other external uncertainties. Looking forward, paying down debt, which carries non-deductible interest, remains an effective use of excess cash. We exited the quarter with inventories up 29% year over year, higher than our 23% sales growth, mainly driven by Arc'teryx.

Driven by strong profit growth and disciplined working capital management, we generated $108 million operating cash flow in the first half and for the full year 2025, we expect to generate solid operating cash flow growth from 2024 levels.

Speaker #4: Turning to the balance sheet, we ended the quarter with $640 million of net debt. Using the midpoint of our 2025 adjusted operating profit guidance, our net debt to adjusted EBITDA ratio was approximately 0.6 times at the end of Q2.

Now moving to guidance, we remain confident that we are well positioned to manage through a variety of terrorists scenarios given our low exposure to the U S. Our high end consumer base.

Untapped pricing power of our brand portfolio.

And our clean balance sheet and strong cash flow dynamics and.

Speaker #4: Our balance sheet is in a healthy position to support our company as we navigate tariff and other external uncertainties. Looking forward, paying down debt which carries non-deductible interest remains an effective use of excess cash.

And given mitigation strategies underway, we continue to expect negligible impact to our group P&L from higher tariffs in 2025 and beyond.

For the full year of 2025, given the upside in Q2 and our continued momentum.

Speaker #4: We exited the quarter with inventories up 29% year over year, higher than our 23% sales growth, mainly driven by Arc'teryx. This higher inventory is primarily driven by three factors.

And despite a slightly higher tariff impact we are raising our full year revenue and EPS expectations.

Andrew Page: This higher inventory is primarily driven by three factors: one, early receipt of fall 2025 merchandise, which included tariff mitigation tactics; two, higher goods in transit from lower air freight usage, which means we carry the goods on our books much longer; and three, FX translation from the weaker U.S. dollar. While we expect inventory growth to remain moderately elevated through the end of 2025, we are very comfortable with the quality of our Arc'teryx goods and expect to work it down and return to normal inventory growth rates as we progress through 2026. Driven by strong profit growth and disciplined working capital management, we generated $108 million of operating cash flow in the first half. For the full year 2025, we expect to generate solid operating cash flow growth from 2024 levels.

This guidance assumes incremental U S tariffs on imports from China remained at 30%.

Speaker #4: One, early receipt of Fall 2025 merchandise, which included tariff mitigation tactics. Two, higher goods and transit from lower air freight usage, which means we carry the goods on our books much longer.

At Nam at 20%.

Europe at 15% and rest of world at the latest rates were.

We are raising our 2025 revenue growth guidance from 15% to 17% to 20% to 21%.

Speaker #4: And three, FX translation from the weaker US dollar. While we expect inventory growth to remain moderately elevated through the end of 2025, we are very comfortable with the quality of Arc'teryx's goods and expect to work it down and return to normal inventory growth rates as we progress through 2026.

<unk> and an approximate 100 basis point benefit from favorable FX impact at current exchange rates.

By segment, we are raising our technical apparel revenue growth guidance from approximately 20% to 22% to 22% to 25%, including continued strong omni comp growth.

Speaker #4: Driven by strong profit growth and disciplined working capital management, we generated $108 million in operating cash flow in the first half. For the full year 2025, we expect to generate solid operating cash flow growth from 2024 levels.

We're also increasing our outdoor performance sales growth expectations from mid teens to 22% to 25% and.

And ball and racquet from mid single digits to 7% to 9% growth.

Speaker #4: Now, moving to guidance, we remain confident that we are well positioned to manage through a variety of tariff scenarios given our low exposure to the U.S., our high-end consumer base, the untapped pricing power of our brand portfolio, and our clean balance sheet and strong cash flow dynamics.

Andrew Page: Moving to guidance, we remain confident that we are well positioned to manage through a variety of tariff scenarios, given our low exposure to the U.S., our high-end consumer base, the untapped pricing power of our brand portfolio, and our clean balance sheet and strong cash flow dynamics. Given mitigation strategies underway, we continue to expect negligible impact to our group P&L from higher tariffs in 2025 and beyond. For the full year of 2025, given the upside in Q2 and our continued momentum, and despite a slightly higher tariff impact, we are raising our full-year revenue and EPS expectations. This guidance assumes incremental U.S. tariffs on imports from China remain at 30%, Vietnam at 20%, Europe at 15%, and the rest of the world at the latest rates.

We are raising our full year adjusted gross margin guidance from 56, 5% to 57% to approximately 57, 5%.

And we're also raising our adjusted operating margin guidance from 11, 5%, 12% to 11, 8% to 12, 2%.

Speaker #4: And given mitigation strategies underway, we continue to expect negligible impact to our group P&L from higher tariffs in 2025 and beyond. For the full year of 2025, given the upside in Q2 and our continued momentum, and despite a slightly higher tariff impact, we are raising our full-year revenue and EPS expectations.

By segment, we continue to expect an adjusted operating margin of approximately 21% for technical apparel.

The outdoor performance, we are raising adjusted operating margin guidance from approximately nine 5% to 11 to 11, 5%.

For Balling racket, we are maintaining our adjusted operating margin guidance of 3% to 4%.

Speaker #4: This guidance assumes incremental U.S. tariffs on imports from China remain at 30%, Vietnam at 20%, Europe at 15%, and the rest of the world at the latest rates.

Following racket will experience a slight drag from higher tariffs in the second half because of the few factors number one the termination of the steel and aluminum exemption under which Wilson rackets and best previously fell.

Speaker #4: We are raising our 2025 revenue growth guidance from 15% to 17% to 20% to 21%, including an approximate 100 basis point benefit from favorable FX impact at current exchange rates.

Andrew Page: We are raising our 2025 revenue growth guidance from 15% to 17% to 20% to 21%, including an approximate 100 basis point benefit from favorable FX impact at current exchange rates. By segment, we are raising our technical apparel revenue growth guidance from approximately 20% to 22% to 22% to 25%, including continued strong omnicom growth. We are also increasing our outdoor performance sales growth expectations from mid-teens to 22% to 25%, and ball and racket from mid-single digits to 7% to 9% growth. We are raising our full-year adjusted gross margin guidance from 56.5% to 57% to approximately 57.5%. We are also raising our adjusted operating margin guidance from 11.5% to 12% to 11.8% to 12.2%. By segment, we continue to expect an adjusted operating margin of approximately 21% for technical apparel. For outdoor performance, we are raising adjusted operating margin guidance from approximately 9.5% to 11% to 11.5%.

Number two higher actual tariff rates in Vietnam, and other sourcing markets than the 10% rest of world assumption, we last guided and three some shipments of Wilson soft goods had unfavorable timing and were hit by the temporary 145% China tariffs.

Speaker #4: By segment, we are raising our technical apparel revenue growth guidance from approximately 20% to 22% to 22% to 25%, including continued strong omnichannel growth.

We are now assuming full year net finance cost of approximately $105 million and an effective tax rate of 28% to 30%.

Speaker #4: We are also increasing our outdoor performance sales growth expectations from mid-teens to 22% to 25%, and ball and racket from mid-single digits to 7% to 9% growth.

The lower effective tax rate is primarily driven by higher profit generation from low tax jurisdictions as well as the discrete item in Q2 that I mentioned.

Other operating income will be approximately $20 million for the full year and net income attributable to noncontrolling interest will be approximately $10 million.

Speaker #4: We are raising our full-year adjusted gross margin guidance from 56% to approximately 57%, and our adjusted operating margin guidance from 11.5% to 12% to a range of 11.8% to 12.2%.

We now expect adjusted diluted EPS of <unk> 77 to 82.

Versus our prior guidance of 67 to 72.

Which is based on 561 million fully diluted shares outstanding.

Speaker #4: By segment, we continue to expect an adjusted operating margin of approximately 21% for technical apparel. For outdoor performance, we are raising adjusted operating margin guidance from approximately 9.5% to between 11% and 11.5%.

Also we are assuming DNA of $350 million, including approximately $180 million of Aro <unk> depreciation.

Capex is expected to be approximately $300 million.

Primarily to support new store expansion.

Speaker #4: For Ball and Racket, we are maintaining our adjusted operating margin guidance of 3% to 4%. Ball and Racket will experience a slight drag from higher tariffs in the second half because of a few factors.

Andrew Page: For ball and racket, we are maintaining our adjusted operating margin guidance of 3% to 4%. Ball and racket will experience a slight drag from higher tariffs in the second half because of a few factors. Number one, the termination of the steel and aluminum exemption under which Wilson rackets and bats previously fell. Number two, higher actual tariff rates in Vietnam and other sourcing markets than the 10% rest of the world assumption we last guided. Number three, some shipments of Wilson soft goods had unfavorable timing and were hit by the temporary 145% China tariff. We are now assuming full-year net finance costs of approximately $105 million and an effective tax rate of 28% to 30%. The lower effective tax rate is primarily driven by higher profit generation from low tax jurisdictions, as well as the discrete item in Q2 that I mentioned.

ERP optimization.

In distribution and logistics investments.

Turning to third quarter guidance, we expect reported revenue growth for the group to be approximately 20%, which includes an approximate 150 basis point benefit from FX.

Speaker #4: Number one, the termination of the steel and aluminum exemption under which Wilson rackets and bats previously fell. Number two, higher actual tariff rates in Vietnam and other sourcing markets than the 10% rest-of-world assumption we last guided.

We expect adjusted gross margin to be approximately 56, 5% in Q3, and an adjusted operating profit margin between 12% 13%.

Speaker #4: And three, some shipments of Wilson soft goods had unfavorable timing and were hit by the temporary 145% China tariff. We are now assuming a full-year net finance cost of approximately $105 million and an effective tax rate of 28% to 30%.

Our net finance costs for the quarter should be between 30 and $35 million and the effective tax rates should fall between 28 and 30%.

We expect adjusted diluted EPS of <unk> 20 to 22 per share.

Our updated guidance implies slower growth and two eight then one H. However, as we've said before should strong trends continue and better than anticipated demand materialize. We believe we will be well positioned to deliver financial performance ahead of these expectations.

Speaker #4: The lower effective tax rate is primarily driven by higher profit generation from low-tax jurisdictions, as well as the discrete item in Q2 that I mentioned.

Speaker #4: Other operating income will be approximately $20 million for the full year, and net income attributable to non-controlling interest will be approximately $10 million. We now expect adjusted diluted EPS of $0.77 to $0.82.

Andrew Page: Other operating income will be approximately $20 million for the full year, and net income attributable to non-controlling interest will be approximately $10 million. We now expect adjusted diluted EPS of $0.77 to $0.82 versus our prior guidance of $0.67 to $0.72, which is based on 561 million fully diluted shares outstanding. Also, we are assuming D&A of $350 million, including approximately $180 million of ROU depreciation. CapEx is expected to be approximately $300 million, primarily to support new store expansion, ERP optimization, and distribution and logistics investments. Turning to third quarter guidance, we expect reported revenue growth for the group to be approximately 20%, which includes an approximate 150 basis point benefit from FX. We expect adjusted gross margin to be approximately 56.5% in Q3 and an adjusted operating profit margin between 12% and 13%.

Lastly, before Q&A, we will be hosting our first ever Investor day on September 18 in Vancouver at our Texas headquarters, which will be webcast. Although we will provide a high level group update the primary focus of the meeting will be a deep dive into the Arctic brand and its many unique opportunities.

Speaker #4: Versus our prior guidance of $0.67 to $0.72. This is based on 561 million fully diluted shares outstanding. Additionally, we are assuming a DNA of $350 million, which includes approximately $180 million of ROU depreciation.

With that I'll turn it back over to the operator for questions.

Thank you we will now begin the question and answer session. If you'd like to ask a question. Please press star one on your telephone keypad. If you would like to withdraw your question simply press Star one again.

Speaker #4: CapEx is expected to be approximately $300 million, primarily to support new store expansion, ERP optimization, and distribution and logistics investments. Turning to third quarter guidance, we expect reported revenue growth for the group to be approximately 20%, which includes an approximate 150 basis point benefit from FX.

First question comes from the line of Matthew Boss from Jpmorgan. Your line is open.

Thanks, and congrats on another nice quarter.

Thanks.

So James could you elaborate on the momentum that youre seeing in the third quarter supporting that 20% outlook speak to drivers of the growth inflection at Solomon.

Speaker #4: We expect adjusted gross margin to be approximately 56.5% in Q3, and an adjusted operating profit margin between 12% and 13%. Our net finance cost for the quarter should be between $30 million and $35 million, and the effective tax rate should fall between 28% and 30%.

And the accelerated back half opportunity and then Stuart could you expand on the raised expectations at our Terex, maybe specifically trends you've seen in the third quarter to date relative to the second quarter, 15% omni comp.

Andrew Page: Our net finance cost for the quarter should be between $30 million and $35 million, and the effective tax rate should fall between 28% and 30%. We expect adjusted diluted EPS of $0.20 to $0.22 per share. Our updated guidance implies slower growth in Q2 than Q1. However, as we've said before, should strong trends continue and better than anticipated demand materialize, we believe we will be well positioned to deliver financial performance ahead of these expectations. Lastly, before Q&A, we will be hosting our first ever Investor Day on September 18th in Vancouver at our Arc'teryx headquarters, which will be webcast. Although we will provide a high-level group update, the primary focus of the meeting will be a deep dive into the Arc'teryx brand and its many unique opportunities. With that, I'll turn it back over to the operator for questions.

Thanks, Matt Okay.

Aye.

Speaker #4: We expect adjusted diluted EPS of 20% to 22 cents per share. Our updated guidance implies slower growth in two weights than one age. However, as we've said before, should strong trends continue and better-than-anticipated demand materialize, we believe we will be well-positioned to deliver financial performance ahead of these expectations.

So based on the very strong Q2 results and we see our growth momentum to carry on.

In Q3.

And especially.

Saddam footwear, okay. So cross border we just.

Speaker #4: Lastly, before Q&A, we will be hosting our first-ever Investor Day on September 18th in Vancouver at Arc'teryx's headquarters, which will be webcast. Although we will provide a high-level group update, the primary focus of the meeting will be a deep dive into the Arc'teryx brand and its many unique opportunities.

Introduced to you guys, our strategy work and especially our new products really resonate in the market and I say, okay. So we created a very unique category, we call the outdoor sneakers, which really gave us a very strong competitive age in snake market.

Speaker #4: With that, I'll turn it back over to the operator for questions.

And especially for female consumer a younger female consumer sectors. So we.

Speaker #5: Thank you. We will now begin the question-and-answer session. If you'd like to ask a question, please press star one on your telephone keypad.

Operator: Thank you. We will now begin the question and answer session. If you would like to ask your question, please press star one in your telephone keypad. If you would like to withdraw your question, simply press star one again. Your first question comes from the line of Matthew Boss from JPMorgan. Your line is open.

We really created a wide space for us and we see very strong growth trend for Aldo Aldo performance segment and on the other side.

Speaker #5: If you would like to withdraw your question, simply press star one again. Your first question comes from the line of Matthew Boss from J.P. Morgan.

I also say it is oh tariffs also on light truck.

Speaker #5: Your line is open.

Speaker #6: Thanks, and congrats on another nice quarter.

Andrew Page: Thanks, and congrats on another nice quarter.

And.

The momentum to carry on Ah Stewart, who will give you more detailed elaboration on that so I mean.

Speaker #2: Thank you.

Operator: Thanks, Matt.

Speaker #5: So, James, could you elaborate on the momentum that you're seeing in the third quarter supporting the 20% outlook? Please speak to the drivers of the growth inflection at settlement and the accelerated back-half opportunity.

Andrew Page: James, could you elaborate on the momentum that you are seeing in the third quarter supporting the 20% outlook? Speak to drivers of the growth inflection at Salomon and the accelerated back half opportunity. Stuart, could you expand on the raised expectations at Arc'teryx, maybe specifically trends you have seen third quarter to date relative to the second quarter, 15% omni-comp?

<unk> hundred 60, a tennis 360 formats continue to work both.

Especially in China, and Southeast Asia, we see a very clear growth pattern for our where some tendency 160 in the U S. We also underway to really test a different format.

Speaker #5: And then, Stuart, could you expand on the raised expectations at Arc'teryx, maybe specifically trends you've seen in the third quarter to date relative to the second quarter, 15% Omnicom?

In the in the in the in the market, we're sitting and we also have a very good confidence to unlock the potential for our worsens.

Speaker #3: Thanks, Matt. Okay. I so based on the very strong Q2 result and we see our growth momentum still carry on, in Q3, and especially for settlement footwear, okay?

Jie Zheng: Thanks, Matt. Okay. Based on the very strong Q2 result, we see our growth momentum still carry on in Q3, especially for Salomon footwear. Cross-border, as we just introduced to you guys, our strategy work and especially our new products really resonate in the markets. I say we created a very unique category we call the outdoor sneakers, which really gives us a very strong competitive edge in sneaker markets, and especially for female consumers, younger female consumer sectors. We really created a wide space for us, and we see very strong growth trends for outdoor performance segment. On the other side, I also will say that Arc'teryx is also on the right track, and the momentum still carries on. I still will give you more detailed elaboration on that.

Tennessee, a 160 in United States.

So pretty much like it's Stuart.

Thanks, James Yeah, Matt.

The outlook that we offered really reflects the trends that we're seeing in the business across regions and channels spin.

Speaker #3: So, cross-border, as we just introduced to you guys our strategy work, and especially our new products, really resonate in the markets. And I say, okay, so we created a very unique category we call the outdoor sneakers.

Specifically.

We look at the second quarter into the third quarter.

Total revenues, we had a wholesale shift last year that was a headwind for us in the second quarter.

Speaker #3: This really gives us a very strong competitive edge in niche markets, especially for female consumers and the younger female consumer sector. We have effectively created a white space for ourselves and are seeing a very strong growth trend in outdoor performance.

Of this year and that was reflected in the wholesale sales increase that we had we had posted.

Single digit that's a tailwind for US now as we go into Q3 this year as we lapped an easier compare last year.

In the wholesale channel overall, though our direct to consumer business is very strong.

Speaker #3: And on the other side, I will also mention that the Arc'teryx brand is performing well. The momentum continues to carry on, and I will provide more detailed elaboration on that.

I would say that 15% comp that we posted.

We feel really good about that the comparison was a tough compare to last year.

Speaker #3: So, I mean, Wilson 360 Tennis 360 format continues to work well. Especially in China and Southeast Asia, we see a very clear growth pattern for our Wilson Tennis 360. In the U.S., we are also on the way to really test different formats.

Also assume a reduction in markdown sales so our markdowns are down.

Jie Zheng: Wilson Tennis 360 format continues to work well, and especially in China and Southeast Asia, we see a very clear growth pattern for our Wilson Tennis 360. In the U.S., we are also on the way to really test a different format in the market we are sitting in, and we also have a very good confidence to unlock the potential for our Wilson Tennis 360 in the United States. Pretty much like this. Stuart?

500 basis points in retail and about 100 basis points in ecommerce so much higher full price business much healthier that benefits our margins.

So we're seeing just strong underlying trends in our business from our Kpis standpoint traffic trends remain very strong which is the kpis that as the driver of our revenue growth.

Speaker #3: In the market we're sitting in, we also have very good confidence to unlock the potential for our Wilson tennis 360 in the United States.

And we have strong inventory position.

As was noted.

<unk> in the back half of the year.

And what we're seeing so far in the third quarter is very encouraging we're seeing really strong initial sell through sell through in the first few weeks of the third quarter.

Speaker #3: So pretty much like this. Stuart,

Speaker #2: Thanks, James. Yeah, Matt, the outlook that we offered really reflects the trends that we're seeing in the business across regions and channels. Specifically, as we look at the second quarter into the third quarter, total revenues we had a wholesale shift last year that was a headwind for us in the second quarter.

Andrew Page: Thanks, James. Yeah, Matt, the outlook that we offered really reflects the trends that we are seeing in the business across regions and channels. Specifically, as we look at the second quarter into the third quarter, total revenues, we had a wholesale shift last year that was a headwind for us in the second quarter of this year. That was reflected in the wholesale sales increase that we had posted single digit. That is a tailwind for us now as we go into Q3 this year, as we lap an easier compare last year in the wholesale channel. Overall, our direct-to-consumer business is very strong. I would say the 15% comp that we posted, we feel really good about that. The comparison was tough compared to last year. We have also seen a reduction in markdown sales.

So that connects to the guidance that we just gave.

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

Good morning, and thank you for taking our question can you speak to the next levers of growth at the Solomon brand. Following the recent inflection how should we be thinking about the pace and magnitude of additional distribution point expansion in the U S relative to your other key international regions, both on an owned door and partner wholesale.

Speaker #2: Of this year, that was reflected in the wholesale sales increase that we posted—single digit. That's a tailwind for us now as we go into Q3 this year, as we lap an easier compare from last year.

Our basis. Thank you.

Speaker #2: In the wholesale channel, overall, though, our direct-to-consumer business is very strong. You know, I would say that 15% comp that we posted—we feel really good about that.

Yes. Thank you for your questions and I first of all salamone.

It's really fatih farcical.

Speaker #2: The comparison with last year has been tough; however, we've also seen a reduction in markdown sales. Our markdowns are down about 500 basis points in retail and about 100 basis points in e-commerce.

The patents.

Children I mean in the past <unk> I mean, obviously embedding driven by strong momentum.

Andrew Page: So, our markdowns are down about 500 basis points in retail and about 100 basis points in e-commerce. So, much higher full-price business, much healthier that benefits our margins. We are seeing just strong underlying trends in our business. From a KPI standpoint, traffic trends remain very strong, which is the KPI that is the driver of our revenue growth. We have a strong inventory position, as was noted, coming into the back half of the year. What we are seeing so far in the third quarter is very encouraging. We are seeing really strong initial sell-through in the first few weeks of the third quarter. So, that connects to the guidance that we just gave.

And Asia Pacific together with the email.

And in the U S. We're still literally we are still underway to build a foundation.

Speaker #2: So, much higher full-price business, much healthier, that benefits our margins. We’re seeing just strong underlying trends in our business from a KPI standpoint. Traffic trends remain very strong.

So we right now we've only got a one shop in New York City, we plan to open.

Four to five shops by the end of year, two in New York, Chicago, and Los Angeles, and the two further validated validates our so called the <unk>.

Speaker #2: Which is the KPI that is the driver of our revenue growth? We have a strong inventory position, as was noted, coming into the back half of the year.

Solomon compact shop format, which has been approved.

Speaker #2: And what we're seeing so far in the third quarter is very encouraging. We're seeing really strong initial sell-through in the first few weeks of the third quarter.

<unk> proven in China and in Europe. So we have a very good confidence because in terms of the retail format and product assortment that we already got a very solid base to support our U S. Market. Meanwhile, we also continue to try to find a good way to strengthen our future.

Speaker #2: So that connects to the guidance that we just gave.

Speaker #5: Your next question comes from the line of Brooke Roach from Goldman Sachs. Your line is open.

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

The business in the United States, especially we are underway to build a very strong partnership with the top accounts like <unk> and loss trading and that will give us a good mall.

Speaker #6: Good morning, and thank you for taking our question. Can you speak to the next levers of growth at the settlement brand following the recent inflection?

Stuart Hazelden: Good morning, and thank you for taking our question. Can you speak to the next levers of growth at the Salomon brand following the recent inflection? How should we be thinking about the pace and magnitude of additional distribution point expansion in the U.S. relative to your other key international regions, both on an owned door and partner wholesale door basis? Thank you.

Speaker #6: How should we be thinking about the pace and magnitude of additional distribution point expansion in the U.S., relative to your other key international regions?

Good place to continue to see what the right model for us to accelerate our business in the U S. And we also together with a very strong performance like be introduced in the market. We also right now we also tried to find a good model in our <unk>.

Speaker #6: Both on an owned door and partner wholesale door basis. Thank you.

Speaker #3: Yeah, thank you for your questions. First of all, settlement is really on a fast-growing pattern and has been driven in the past two quarters, obviously influenced by strong momentum in China and the Asia Pacific, together with email.

Jie Zheng: Thank you for your questions. First of all, Salomon is really on a fast-growing pattern. It is driven, in the past two Qs, obviously by strong momentums in China and APAC, together with the U.S. In the U.S., we are still, literally, on the way to build the foundation. Right now, we only got one shop in New York City. We plan to open four to five shops by the end of the year in New York, Chicago, and Los Angeles, to further validate our Salomon compact shop format, which has been proven in China and Europe. We have very good confidence because in terms of the retail format and the product assortment, we already got a very solid base to support our U.S. market. Meanwhile, we also continue to try to find a good way to strengthen our B2B business in the United States.

<unk> specialty in the United States. So in summary, I will say we are still.

In solidly in the U S. We are still on a.

Preliminary stage, we are still underway to build out a foundation.

But given the successful model, we build up being Europe, and China, we have a very high confidence to build a very strong.

Speaker #3: And in the U.S., we are still literally on the way to build at the foundation. So right now, we only have the one shop in New York City.

Our business model for Saddam of footwear in United States in the future.

Speaker #3: We plan to open four to five shops by the end of the year in New York, Chicago, and Los Angeles. The two will further validate our so-called settlement compact shop format, which has been proven in China and Europe.

Great. Thanks, so much I'll pass it on.

Thank you.

Your next question comes from the line of Lorraine Hutchinson from Bank of America. Your line is open.

Thank you good morning.

Wanted to get your views on pricing at each of the brands what type of price increases are you embedding to mitigate the parents and.

Speaker #3: So we have a very good confidence because, in terms of the retail format and the product settlement, we already got a very solid base to support our U.S. market.

What does the customer response been to that.

Yeah. Thanks Lauren.

Yeah with regard to price it increases I mean, we have across the brands, we would have leaned into some pricing increases and the Wilson brand.

Speaker #3: Meanwhile, we also continue to try to find a good way to strengthen our B2B business in the United States. Especially, we are on the way to building a very strong partnership with the top accounts like II and Nord Stream.

We talked about that a little bit earlier this year.

Jie Zheng: Especially, we are on the way to build a very strong partnership with the top accounts like REI and Nordstrom. That will give us a good base to continue to see what is the right model for us to accelerate our business in the U.S. We also, together with a very strong performance line being introduced in the markets, right now we also try to find a good model in our running, especially in the United States. In summary, I will say we are still in Salomon in the U.S. We are still on a preliminary stage. We are still on the way to build out a foundation. Given the successful model we built up in Europe and China, we have very high confidence to build a very strong business model for Salomon footwear in the United States in the future.

But as far as solve it at our at our tariffs we continue to acknowledge that we have untapped pricing.

Speaker #3: And that will give us a good base to continue to see what the right model for us to accelerate our business in the U.S.

Flexibility that we will definitely lean into should we should we need to but we've been able to navigate and mitigate the tariff impact without taking price, thus far and those other two brands with regard to the client with.

Speaker #3: And we also, together with a very strong performance line being introduced in the markets, we are currently trying to find a good model in our running specialty in the United States.

With regard to Wilson for certain products, it's been approximately 10%.

Speaker #3: So in summary, I will say we are still in settlement in the U.S., we are still in the preliminary stage. We are still on the way to build out a foundation.

Thank you.

Our next question comes from the line of Paul Leisure from Citi. Your line is open.

Thanks.

Speaker #3: But given the successful model we built in Europe and China, we have a very high confidence in building a strong business model for settlement footwear in the United States in the future.

Stuart can you talk about how our stores are comping.

The full price stores versus how much of a drag on comps from the outlet stores.

Speaker #6: Great. Thanks so much. I'll pass it on.

Stuart Hazelden: Great. Thanks so much. I'll pass it on.

And then just separate.

Speaker #3: Thank you.

Inventory in terms of dollars versus units and if you can give any color on the places he might be to my macro restricting sales versus any regions or categories that you might be but you have expense.

Jie Zheng: Thank you.

Speaker #5: Your next question comes from the line of Lorraine Hutchinson from Bank of America. Your line is open.

Operator: Your next question comes from a line of Lorraine Hutchinson from Bank of America. Your line is open.

Speaker #6: Thank you. Good morning. I wanted to get your views on pricing at each of the brands. What type of price increases are you embedding to mitigate the tariffs, and what has the customer response been to those?

Stuart Hazelden: Thank you. Good morning. I wanted to get your views on pricing at each of the brands. What type of price increases are you embedding to mitigate the tariffs, and what has the customer response been to those?

Yes, Thanks Paul.

Yes.

Sure.

Comp store trends in our full price stores as robust, it's probably a mid single digit drag on the overall comp.

Speaker #3: Yeah, thanks Lorraine. Yeah, with regard to price increases, I mean, we have across the brands, we would have leaned into some pricing increases in the Wilson brand.

Andrew Page: Yeah, thanks, Lorraine. With regard to pricing increases, we have, across the brands, leaned into some pricing increases in the Wilson brand. We talked about that a little bit earlier this year. As far as Salomon and Arc'teryx, we continue to acknowledge that we have untapped pricing flexibility that we will definitely lean into should we need to. We have been able to navigate and mitigate the tariff impact without taking price thus far in those other two brands. With regard to Wilson, for certain products, it has been approximately 10%.

Based on the outlet sales declines that I mentioned.

Speaker #3: We talked about that a little bit earlier this year. As far as settlement and Arc'teryx, we continue to acknowledge that we have untapped pricing flexibility that we will definitely lean into should we need to.

We're happy to see.

See that shift happening, we're happy to see a stronger full price mix.

And even though it may weigh on the headline comp number.

And from an inventory standpoint.

Speaker #3: But we've been able to navigate and mitigate the tariff impact without taking price thus far in those other two brands. You know, with regard to the Wilson, for certain products, it's been approximately 10%.

You know that in certain of our footwear categories, we've stocked out quickly.

Especially new models that we're introducing where we're still trying to find the edge of demand. The clarkia Pant that Joe had mentioned is a good example of that we're still chasing chasing the market there.

Speaker #6: Thank you.

Stuart Hazelden: Thank you.

Much of our spring summer apparel line also.

Speaker #5: Your next question comes from the line of Paul Ledger from City. Your line is open.

Operator: Your next question comes from the line of Paul Leger from Citi. Your line is open.

We're still not painfully out of stock in a number of regions.

Speaker #7: Hey, thanks. Hey, Stuart, can you talk about how Arc'teryx stores are competing with the full-price stores versus how much of a drag you're seeing on comp?

Jie Zheng: Hey, thanks. Hey, Stuart, can you talk about how Arc'teryx stores are comping the full-price stores versus how much of a drag you are seeing on comp from the outlet stores? Then, just separate inventory in terms of dollars versus units, and if you can give any color as to places you might be too light, it might be restricting sales versus any regions or categories that you might be a bit too high expensive.

And so we really don't know how high is high yet they're not part of the business.

It gives us encouragement for the spring summer period, specifically.

Speaker #7: From the outlet stores, and then just separate inventory in terms of dollars versus units. If you can give any color as to places you might be too light, it might be restricting sales.

We're in a good position I would say from a fall winter as we head into as.

As we're now in third quarter, and you know what I had mentioned in terms of the trend quarter to date in Q3 gives us confidence in the guidance that we could get in.

Speaker #7: Versus any regions or categories that you might be a bit too heavy. Thanks.

I would further say you know if demand continues to materialize.

You know theres the potential to outperform and so we think we're well positioned nothing structural that would prevent us and where we are in a strong inventory position at this point.

Speaker #3: Yeah, thanks, Paul. Yeah, the comp store trends in our full-price stores are robust. It's probably a mid-single-digit drag on the overall comp.

Andrew Page: Yeah, thanks, Paul. The comp store trends in our full-price stores are robust. It's probably a mid-single-digit drag on the overall comp based on the outlet sales declines that I mentioned. We're happy to see that shift happening. We're happy to see a stronger full-price mix, even though it may weigh on the headline comp number. From an inventory standpoint, in certain of our footwear categories, we've stocked out quickly, especially new models that we're introducing where we're still trying to find the edge of demand. The Clarkia pant that James had mentioned is a good example of that. We're still chasing the market there. Much of our spring-summer apparel line also, we're still painfully out of stock in a number of regions. We really don't know how high is high yet in that part of the business, and it gives us encouragement for the spring-summer period specifically.

That's the most currently to give right now.

And Paul This is Andrew I would elaborate a little bit on the on the inventory as Stuart talked about that and in our prepared remarks definitely comfortable with where we are inventory and in fact, a bit encouraged that we're able to get ahead of some of the some of the floor sets that Stewart had to chase in previous years. In addition, as we.

Speaker #3: Based on the outlet sales declines that I mentioned, we're happy to see that shift happening. We're happy to see a stronger full-price mix.

Speaker #3: Even though it may weigh on the headline comp number. From an inventory standpoint, you know, in certain of our footwear categories, we've stocked out quickly.

We have started to optimize our supply chain and get ahead of some of that we're taking ownership of our inventory a bit earlier, because we have less air freight and actually vessel freight so normalize that supply chain process, which is again I'm encouraged by the by the improvements that we're making in our supply chain and encouraged by the fact that we're going to get ahead of some of that.

Speaker #3: Especially new models that were introduced, where we're still trying to find the edge of demand. The Clarkia pant that James mentioned is a good example of that.

Speaker #3: We're still chasing the market there. Much of our spring-summer apparel line, you know, we're still painfully out of stock in a number of regions.

A man that we've been facing in previous periods.

Got it. Thank you guys. Good luck.

Thanks, Paul.

Your next question comes from the line of Jay sole from UBS financial Your line is open.

Speaker #3: And so we really don't know how high it’s high yet in that part of the business. It gives us encouragement for the spring-summer period specifically.

Great. Thank you so much that two part question one Stuart can you just talk about the women's business at our Terex and how you've seen that develop over the last 90 days.

Speaker #3: We're in a good position. I would say from a fall-winter as we head into as we're now in third quarter and you know, what I had mentioned in terms of the trend quarter to date in Q3 gives us confidence in the guidance that we had given.

Andrew Page: We're in a good position, I would say, from a fall-winter as we head into, as we're now in Q3. What I had mentioned in terms of the trend quarter to date in Q3 gives us confidence in the guidance that we had given. I would further say, if demand continues to materialize, there's the potential to outperform. We think we're well positioned, nothing structural that would prevent us, and we're in a strong inventory position at this point. That's the most color we can give right now. Yeah.

Just with the Super strong growth.

Probably above what you talked about at the time you got to know what's really gone better Big picture. It's Aman. That's allowed you to deliver this big inflection in the big growth. Thank you.

We will start with Stuart on our tariffs and go to James for solar.

Speaker #3: And I would further say, you know, if demand continues to materialize, you know, there's the potential to outperform. And so we think we're well positioned. Nothing structural would prevent us, and we're in a strong inventory position at this point.

Hey, Jay yes, thanks for the question.

The womens business, we saw continued strength in the second quarter.

Revenues in women's was up over 30% in the quarter. We saw continued increases in our penetration or mix of business.

Speaker #3: So that's the most comment we can give right now. Yeah, and Paul, this is Andrew. I would elaborate a little bit on the inventory.

Jie Zheng: Paul, this is Andrew Page. I would elaborate a little bit on the inventory as Stuart Hazelden talked about in our prepared remarks. I am definitely comfortable with where we are with inventory, and in fact, a bit encouraged that we are able to get ahead of some of the floor sets that Stuart Hazelden had to chase in previous years. In addition, as we have started to optimize our supply chain and get ahead of some of that, we are taking ownership of our inventory a bit earlier because we have less air freight and actually vessel freight. We normalize that supply chain process, which is, again, I am encouraged by the improvements that we are making in our supply chain and encouraged by the fact that we are going to get ahead of some of that demand that we have been chasing in previous periods.

So we're pleased to see.

Speaker #3: As Stuart talked about and in our prepared remarks, we are definitely comfortable with where we are with inventory. In fact, we are a bit encouraged that we're able to get ahead of some of the floor sets that Stuart had to chase in previous years.

Just the strength of our women's business growing in importance.

Some explosive growth in certain models Joseph mentioned the Clarkia. We also introduced recently a couple of new models and <unk> and the altera crops Hard-shell Theyre seeing SaaS sales out of the gate as well so.

Speaker #3: In addition, as we have started to optimize our supply chain and get ahead of some of that, we're taking ownership of our inventory a bit earlier because we have less air freight and actually vessel freight.

We're excited to see women's only specific models performing well as.

Speaker #3: So, normalize that supply chain process. Again, I'm encouraged by the improvements that we're making in our supply chain and encouraged by the fact that we're going to get ahead of some of that demand that we've been chasing in previous periods.

As we expand the assortment for womens this is an important validation of the product strategy.

We're seeing are core products continue to sell well also with our female guests. So.

Speaker #7: Got it. Thank you, guys. Good luck.

Andrew Page: Got it. Thank you, guys. Good luck.

We really feel like we're just getting started so more to follow and we look forward to sharing more at the Investor day in September on women's specifically.

Speaker #3: Paul.

Speaker #5: Your next question comes from the line of Jay Sol from UBS Financial. Your line is open.

Jie Zheng: Thanks, Paul.

Operator: Your next question comes from a line of Jay Soll from UBS Financial. Your line is open.

Hey, Jay.

Speaker #8: Great. Thank you so much. Two-part question. One, Stuart, just talk about the women's business at Arc'teryx and how you've seen that develop over the last 90 days.

Stuart Hazelden: Great. Thank you so much. Two-part question. Stuart, just talk about the women's business at Arc'teryx and how you've seen that develop over the last 90 days. On Salomon, with the super strong growth, probably above what you talked about at the time of the IPO, what has really gotten better, big picture at Salomon that has allowed you to deliver this big inflection and the big growth? Thank you.

I will highlight.

Several key drivers to make a solid loan and at this stage goes so faster in the market. Okay. So first of all I will say I just mentioned, it's all coming from our unique product proposition. Okay. So we make a very successful story.

Speaker #8: And on settlement, just with the super strong growth, you know, probably above what you talked about at the time of the IPO. What's really gotten better, big picture, at settlement that's allowed you to deliver this big inflection and the big growth?

Speaker #8: Thank you.

Speaker #3: We'll start with Stuart on Arc'teryx and go to James for settlement.

Andrew Page: will start with Stuart on Arc'teryx and go to James for Salomon. Hey, Jie. Yeah, thanks for the question. The women's business, we saw continued strength in the second quarter. Our revenues in women's was up over 30% in the quarter. We saw continued increases in our penetration, our mix of business. So, we are pleased to see just the strength of our women's business growing in importance. Some explosive growth in certain models. James had mentioned the Arc'teryx. We also introduced recently a couple of new models, the Nia pant and the Altera crops hard shell that are seeing fast sales out of the gate as well. So, we are excited to see women's-only specific models performing well as we expand the assortment for women's.

On the category, we call the Aldar sneakers, which many are driven by our sports style famous okay. XD theaters, so that left franchise really demonstrated very strong.

Speaker #7: Hey, Jay. Yeah, thanks for the question. The women's business saw continued strength. In the second quarter, our revenues in women's were up over 30% for the quarter.

Performance among the younger I was a younger female consumer sectors. So I I think this gave us a very unique angle to unlock the potential for the Florida kept very highly competitive market.

Speaker #7: We saw continued increases in our penetration or mix of business. So we're pleased to see just the strength of our women's business growing in importance.

Speaker #7: You know, some explosive growth in certain models James had mentioned, the Clarkia. We also introduced recently a couple of new models: the NEA pant and the Altera crops hard shell.

Side the product side. There is also we consistently provide.

We introduced a high performance running products in the market, which also.

See the extremely strong a positive feedback from our b to be honest.

Speaker #7: They're seeing fast sales out of the gate as well, so we're excited to see women's-only specific models performing well as we expand the assortment for women.

Also the sales through also listed on the top in auto shop to a point of sales that we have city. So that's number one the second one I think we also are really good at that.

Speaker #7: This is an important sort of validation of the product strategy. While we're seeing our core products continue to sell well, also with our female guests.

Andrew Page: This is an important sort of validation of the product strategy while we are seeing our core products continue to sell well also with our female guests. So, we really feel like we are just getting started. More to follow, and we look forward to sharing more at the Investor Day in September on women's specifically.

Our strong business model in China, you know three years ago, we only got five shops and today by the end of the year. We close we will have a close to 300 shop. All these shops are profitable and maybe give us gave us a very strong confidence to to try to hope. It is at the lower end of this caliber.

Speaker #7: So we really feel like we're just getting started. More to follow, and we look forward to sharing more at the Investor Day in September on women specifically.

Speaker #3: Hey, Jay. I will highlight several key drivers to make settlement at this stage grow faster in the markets, okay? So first of all, I will say I just mentioned it's all coming from our unique product proposition, okay?

Jie Zheng: Hey, Jay. I will highlight several key drivers to make Salomon at this stage grow so fast in the markets. First of all, I will say, I just mentioned, it is all coming from our unique product proposition. We make a very successful story on the category we call the outdoor sneakers, which many are driven by our sports style business, XD Sears. That franchise really demonstrates very strong performance among the younger, I would say, younger in the female consumer sectors. I think this gives us a very unique angle to unlock the potential for the very highly competitive unique markets. On the other side, the product side, we also consistently provide, introduce the high-performance running products in the market, which also receive extremely strong positive feedback from our B2B partners.

Direct to consumer channel stood up also gave us the chance to.

To leverage overall brand awareness and also make the consumer understand was Solomon. Thanks, Paul how they can't get the right level of service part of our from being in the shop they are walking.

Speaker #3: So we made a very successful story in the category we call outdoor sneakers, which is driven by our sports style business, okay? XD sellers.

Hum in the shopping environment.

They are you okay. So I think it's a it's a quite amazing situation and <unk> side I would say yeah.

Speaker #3: So, that franchise really demonstrates very strong performance among the younger, I would say, younger and the female consumer sectors. I think this gives us a very unique angle to unlock the potential for the highly competitive sneaker markets.

The overall I mean strategically.

Strategic move on our <unk> partners.

Optimization, especially in Europe, Okay, where you really do it very strong alliance with pulp.

Peter B retail property theaters cross border in.

Speaker #3: And on the other side, the product side, we consistently provide and introduce high-performance running products in the market, which also receive extremely strong positive feedback from our B2B partners.

European market and JD sports foot locker and.

Carcinoma, they all gave us a very strong.

A strong exposure in the shops and so that we are we can really deliver the result in the market. So that's the main drivers for our soluble.

Speaker #3: And also the sales are listed at the top in all the shops. A point of sale we are setting. So that's number one.

Jie Zheng: The sales flow also listed on the top in all the shops to the point of sales we are setting. That is number one. The second one is, I think we also really build up the strong business model in China. Three years ago, we only got five shops, and today, by the end of the year, we will have close to 300 shops. All these shops are profitable and really give us a very strong confidence to drive the whole business the right way. These kinds of direct-to-consumer channels build up also give us the chance to leverage overall brand awareness and also make the consumer understand what Salomon stands for, how they can get the right level of service from our, from in the shop they are working, they are in the shop environment they are in. I think it is a quite amazing situation.

Hi, It goes patch in the market.

Speaker #3: The second one is, I think we also really built a strong business model in China. You know, three years ago we only had five shops, and today, by the end of the year, we will have close to 300 shops.

Got it very helpful. Thank you so much.

Your next question comes from the line of Laura on vessel <unk> from BNP Paribas. Your line is open.

Oh good morning, Thank you very much for taking my question.

Speaker #3: All these shops are profitable, and they really give us a very strong confidence to drive the whole business in the right way. These kinds of direct-to-consumer channels also give us the chance to leverage overall brand awareness and help consumers understand what settlement stands for, as well as how they can get the right level of service from the shop they are working with.

Outdoor performance is implied to grow 20% in second half can you unpack that a bit more any nuances between <unk> and <unk> revenues, especially heading into the Winter Olympics and then Andrew should we still assume that winter goods grows low single digits for the year and then I have a quick follow up on margins. Thank you.

So that's part of the question I missed the rest.

So that's part of your velocity.

Speaker #3: They are in the shop environment. They are in, okay? So I think it's quite an amazing situation. On the other side, I will say the overall strategic move on our B2B partners optimization, especially in Europe, okay?

Yes.

Yes winter goods should they still grow low single digits for the year.

Oh, what a sports equipment will continue to be a low single digit grower for the for the rest of the year. The outdoor performance implies 20% growth in the second half.

Jie Zheng: On the other side, I will say the overall, I mean, strategic move on our B2B partners' optimization, especially in Europe. We really built a very strong alliance with the top B2B retailers, the top retailers cross-border in European markets, and JD Sports, Footlock, and Casino. They all give us a very strong, very strong exposure in the shops, so that we can really deliver the result in the market. That is the main drivers for Salomon in the current high growth pattern in the market.

As you know, it's pretty level between the third and fourth quarter. So there's no no.

Speaker #3: We really built a very strong alliance with the top B2B retail the top retailers cross-border in European markets. And JD Sports Footlock and they all the castle, they all give us a very strong very strong exposure in the shops.

Cadence that you need to build in that we're signaling.

Okay very helpful. And then last quarter, Andrew you were very helpful, providing color around a thousand basis point improvement in margins for the outdoor performance I think 700 beds.

Gross margin can you kind of give us a bridge for the 700 basis point improvement and then longer term are there any structural reasons why this segment margin can't get to mid teens over time.

Speaker #3: And so that we can really deliver the result in the market. So let's discuss the main drivers for settling the current high growth pattern in the markets.

Speaker #3: Got it. Very helpful. Thank you so much.

Yeah with regard to the B.

Andrew Page: Got it. Very helpful. Thank you so much.

The gross margin improvement in the second quarter was primarily gross margin.

Speaker #5: Your next question comes from the line of Laurent Vasilescu from BNP Paribas. Your line is open.

Operator: Your next question comes from the line of Laurent Vasilescu from BNP Paribas. Your line is open.

And with regard to whether or not this business can get to.

Speaker #8: Oh, good morning. Thank you very much for taking my question. Outdoor performance is implied to grow 20% in the second half. Can you unpack that a bit more?

Stuart Hazelden: Good morning. Thank you very much for taking my question. Outdoor performance is implied to grow 20% in the second half. Can you unpack that a bit more? Any nuances between Q3 and Q4 revenues, especially heading into the Winter Olympics? Andrew, should we still assume that winter goods grows low single digits for the year? I have a quick follow-up on margins. Thank you.

You know, we're going to be obviously very competitive and you know what as we continue to drive soft goods and footwear you would expect this business to start to approach that the area that you're talking about I'm going to go.

Speaker #8: Any nuances between Q3 and Q4 revenues, especially heading into the Winter Olympics? And then, Andrew, should we still assume that winter goods grow low single digits for the year? I have a quick follow-up on margins.

A longer term update on the margin profile of each of our segments. When we come up at Investor day, but you're in the Zip code.

Speaker #8: Thank you.

Very helpful looking forward to Vancouver.

Speaker #3: That part of the question I missed, the last part. The last part of your question.

Yeah.

Jie Zheng: That part of the question, I missed the last part. The last part of your question?

Our next question comes from the line of Jonathan <unk> from Baird. Your line is open.

Speaker #8: Please.

Speaker #3: Second Second part.

Andrew Page: Yeah, winter goods, should they still grow low single digits for the year?

Speaker #8: Yeah, winter goods should still grow low single digits for the year?

Yes, hi, good morning, Thank you.

Speaker #3: What equipment will continue to be a low single-digit grower for the rest of the year? The outdoor performance implied 20% growth in the second half.

Stuart just two follow ups, if I could the outlet drag on comps for technical apparel, our terex should we expect that to continue.

Jie Zheng: Winter sports equipment will continue to be, you know, a low single-digit grower for the rest of the year. The outdoor performance implied, you know, 20% growth in the second half is, you know, it's pretty level between the third and fourth quarter. So, there's no, you know, no cadence that you need to build in that we're signaling.

Equally throughout the year and then maybe could you.

Frame up a little more of the opportunity you see bringing the Korea business fully in house.

Speaker #3: As you know, it's pretty level between the third and fourth quarters, so there's no cadence that you need to build in that we're signaling.

And then just separately Andrew you raise the operating margin again, it was a little bit less than the raise to the gross margin rate. So could you maybe just share your where youre driving incremental investment in some of the payoffs that you expect to see.

Speaker #8: Okay. Very helpful. And in the last quarter, Andrew, you were very helpful in providing insights around a 1,000 basis points improvement in margins for the outdoor performance.

Stuart Hazelden: Okay, very helpful. In the last quarter, Andrew, you were very helpful providing a color around 1,000 basis point improvement in margins for the outdoor performance. I think 700, that's from gross margin. Can you kind of give us that bridge for the 700 basis point improvement? Longer term, are there any structural reasons why this segment margin can't get to mid-teens over time?

Speaker #8: I think 700, that's what's from gross margin. Can you kind of give us that bridge for the 700 basis point improvement? And then longer term, are there any structural reasons why this segment margin can't get to mid-teens over time?

Yes, Thanks, Jonathan Stewart so.

The outlet drag.

Yeah, I don't expect it will get worse than what we have seen in the first half of the year.

There could be an opportunity for that to moderate to a degree but.

Speaker #3: Yeah, with regard to the gross margin improvement in the second quarter, it is primarily driven by gross margin. As for whether or not this business can get to, you know, we're going to be obviously very competitive. As we continue to drive soft goods and footwear, you would expect this business to start to approach the area that you're talking about.

Probably more like what we've seen in the first half and not if that makes sense. So it probably more consistent into the back half.

Andrew Page: Yeah, with regard to the gross margin improvement in the second quarter, it is primarily gross margin. With regard to whether or not this business can get to, you know, we are going to be obviously very competitive. As we continue to drive soft goods and footwear, you would expect this business to start to approach the area that you are talking about. I am going to give a much longer-term update on the margin profile of each of our segments when we come up at Investor Day. But you are in the zip code.

Then any any change per se.

The Korea opportunity, we believe is exciting.

It's a incredible outdoor market.

Sure.

Had a strong relationship for a number of years with our partner there but.

Speaker #3: I'm going to give a much longer-term update on the margin profile of each of our segments when we come up at Investor Day.

But we believe we can invest in the business in a new way and really capture meaningful upside.

Speaker #3: But you're in the zip code.

Building on the strong start that that our partner had created there.

Speaker #8: Very helpful. Looking forward to Vancouver.

Stuart Hazelden: Very helpful. Looking forward to Vancouver.

So we.

Speaker #5: Your next question comes from a line of Jonathan Comb from Baird. Your line is open.

We see we see upside for sure in Korea, we think it could be bigger than Japan, even in terms of revenues.

Operator: Your next question comes from the line of Jonathan Komp from Baird. Your line is open.

Speaker #3: Yeah, good morning. Thank you. Stuart, just two follow-ups if I could. The outlook drag on comps for technical apparel or Arc'teryx, should we expect that to continue equally throughout the year? And then maybe could you frame up a little more the opportunity you see bringing the Korea business fully in-house?

Andrew Page: Yeah, hi. Good morning. Thank you. Stuart, just two follow-ups if I could. The outlook drag on comps for technical apparel or Arc'teryx, should we expect that to continue, you know, equally throughout the year? Then maybe could you frame up a little more the opportunity you see bringing the Korea business fully in-house? Then just separately, Andrew, you raised the operating margin again. You know, it was a little bit less than the raise to the gross margin rate. Could you maybe just share, you know, where you're driving incremental investment and some of the payoff that you expect to see? Yeah. Thanks, Jonathan, Stuart. The outlet drag, yeah, I do not expect it will get worse than what we have seen in the first half of the year.

We've got a great start so far.

Hey, Jonathan Yeah, really excited about the performance in the second quarter and so think about it you know really strong momentum as we go into the third quarter, we're going to seize this opportunity to continue to invest in the growth of the business as you think about things like new store openings Mark.

Speaker #3: And then just separately, Andrew, you raised the operating margin again. You know, it was a little bit less than the raise to the gross margin rate.

Getting you there was a previous question around around Solomon footwear growth and that inflection and continue to invest in that inflection brand awareness and with all of those key initiative investments, we're still going to deliver 100 basis points of expansion to the bottom line. So it's it's thoughtful and.

Speaker #3: So could you maybe just share where you're driving incremental investment and some of the payoff that you expect to see?

Speaker #7: Yeah, thanks, Jonathan and Stuart. So the outlet drag, yeah, I don't expect it will get worse than what we have seen in the first half of the year.

It's prudent and it's responsible growth.

Yes.

Speaker #7: There could be an opportunity for that to moderate to a degree, but, you know, probably more like what we've seen in the first half than not, if that makes sense.

Andrew Page: There could be an opportunity for that to moderate to a degree, but you know, probably more like what we have seen in the first half than not, if that makes sense. Probably more consistent into the back half than any change per se. The Korea opportunity we believe is exciting. It is an incredible outdoor market. We have had a strong relationship for a number of years with our partner there, but we believe we can invest in the business in a new way and really capture meaningful upside, building on the strong start that our partner had created there. We see upside for sure in Korea. We think it could be bigger than Japan even in terms of revenues, and we have got a great start so far.

Certainly paying off thanks again.

Operator, we have time for one more question.

Certainly your final question comes from the line of Michael Binetti from Evercore. Your line is open.

Speaker #7: So, probably more consistent in the back half than any change, per se. The Korea opportunity, we believe, is exciting. It's an incredible outdoor market.

Hey, guys congrats on a great quarter.

Can I just ask Stuart it sounds like a few categories stocked out quickly even if not the first time so good to see the demand there I don't know it sounds like the drag of the outlets is kind of the same through the year could you just help us understand what we should expect the evolution of that omnicom.

Speaker #7: We've had a strong relationship for a number of years with our partner there. But we believe we can invest in the business in a new way and really capture meaningful upside.

The rest of the year is mid teens more consistent run rate from here.

And you also pointed to the high the high comparison a year ago.

Speaker #7: Building on the strong start that our partner had created there, we see upside for sure in Korea. We think it could be bigger than Japan, even in terms of revenues.

Just backing up I know you guys don't look at the business and Geos, but maybe just unpack the 6% in the Americas.

We're a little bit by brand and channel and give us a sense of whether that's the right range to think about I know, there's some categories like in bond racket, and maybe hard goods that mix higher in the U S. But is that is that the right cadence to think about what we'll see in that mid single digit range for the rest of the year.

Speaker #7: And we've got a great start so far.

Speaker #3: Hey Jonathan, yeah, I'm really excited about the performance in the second quarter. And to think about it, we have really strong momentum as we go into the third quarter.

Jie Zheng: Hey, Jonathan. We are really excited about the performance in the second quarter. Think about it, really strong momentum as we go into the third quarter. We are going to seize this opportunity to continue to invest in the growth of the business. As you think about things like new store opening, marketing, there was a previous question around Salomon footwear growth and that inflection and continue to invest in that inflection, brand awareness. With all of those key initiative investments, we are still going to deliver 100 basis points of expansion to the bottom line. So, it is thoughtful, it is prudent, and it is responsible growth.

Yeah, Michael It's Stuart I'll take the first part of your question.

Speaker #3: We're going to seize this opportunity to continue to invest in the growth of the business. As you think about things like new store openings and marketing, you know, there was a previous question around settlement footwear growth and that inflection, and we will continue to invest in that inflection.

So that the omnicom for our Terex.

You know our comparisons get easier.

Easier into the second half.

And as I said, the underlying trend is strong and so.

Speaker #3: Brand awareness, and with all of those key initiative investments, we're still going to deliver 100 basis points of expansion to the bottom line. So it's thoughtful, it's prudent, and it's responsible growth.

We and what we're seeing in the first few weeks of Q3 is very encouraging and we're very pleased with the with the overall terms, including our omnicom's.

And that's reflected in the guidance that we had shared.

So certainly see the trends in the first half from the army count standpoint, being something that we would we would see continuing at least at this level or higher into the second half of the year and as I mentioned strong inventory position nothing structural that would prevent us from delivering upside should do.

Speaker #3: Certainly paying off. Thanks again.

Andrew Page: Certainly paying off. Thanks again.

Speaker #8: Operator, we have time for one more question.

Operator: Your final question comes from the line of Michael Benetti from Evercore. Your line is open.

Speaker #5: Certainly. Your final question comes from Michael Benetti from Evercore. Your line is open.

Speaker #8: Hey guys, congrats on a great quarter. Can I just ask Stuart, it sounds like a few categories stocked out quickly, and that's not the first time.

Andrew Page: Hey, guys, congrats on a great quarter. Can I just ask, Stuart, it sounds like a few categories stocked out quickly.

Manned materialize.

Operator: not the first time, so it's good to see the demand there. I do not know. It sounds like the drag to the outlets is kind of the same through the year. Could you just help us understand what we should expect to see the evolution of that Omnicom in the rest of the year? Is mid-teens a more consistent run rate from here? I mean, you also pointed to the high comparison a year ago. I guess just backing up, I know you guys do not look at the business in geos, but maybe just unpack the 6% in the Americas there a little bit by brand and channel to give us a sense of whether that is the right range to think about. I know there are some categories like in ball and racket and maybe hard goods that mix higher in the U.S.

Speaker #8: So good to see the demand there. I don't know, it sounds like the drag to the outlets is kind of the same throughout the year.

And Michael Hey, It's Andrew you know just coming back to your your North American question.

Speaker #8: Could you just help us understand what we should expect for the evolution of that omnicom in the rest of the year? Is mid-teens a more consistent run rate from here?

Again really excited about what we're seeing especially with our Texas Sullivan strong double digit growth for both of them in North America, where do you see obviously fallen racket is predominantly North America.

Speaker #8: You also pointed to the high comparison a year ago. And then I guess just backing up, I know you guys don't look at the business in geos, but maybe just unpack the 6% in the Americas there a little bit by brand and channel.

And so there was slower growth in the U S with wallet racket, Tennessee 360 continues to grow strong and we're excited about that we had strong results in rackets, where you saw some slower trends where baseball gloves.

Speaker #8: Give us a sense of whether that's the right range to think about. I know there's some categories like in ball and racket and maybe hard goods that mix higher in the U.S.

Speaker #8: But is that the right cadence to think about? What we'll see in that mid-single-digit range for the rest of the year?

Operator: But is that the right cadence to think about what we will see in that mid-single-digit range for the rest of the year?

<unk> and inflatable ball, we continue to do well with batch, but it was a.

A little bit offset by by the gloves and then the last thing is we do see some sporting goods retailers being cautious with regard to their ordering.

Andrew Page: Yeah. Michael, I'll take the first part of your question. For Arc'teryx, our comparisons get easier into the second half. As I said, the underlying trend is strong. What we are seeing in the first few weeks of Q3 is very encouraging. We are very pleased with the overall trends, including our D2C. That is reflected in the guidance that we had shared. We certainly see the trends in the first half from a D2C standpoint being something that we would see continuing at least at this level or higher into the second half of the year. As I mentioned, strong inventory position, nothing structural that would prevent us from delivering upside should demand materialize.

So that's driving a little bit of that slowdown that you see.

And we're just going to follow that real quick.

And I guess.

And then Michael.

The last thing that I want to remember is that if we we pointed this out in Stuart alluded to it a little bit last year, Yeah, we had a pull forward out of Q3 into Q2.

For and that was wholesale driven and so what happens is it's a tougher comp this year, excluding that pull forward you would've saw a slight increase in the car.

Current year.

In the wholesale channel excluding that excluding that drag wholesale would have actually accelerated slightly overall at the group level.

Okay.

Can I follow that with the.

The load the reminder of about low to mid single digit growth long term out of Boston racquet. It sounds like you're feeling very good about the Tennessee 360 initiatives a few things in past stores are starting to grow in China is there an obvious category that you expect to be persistently negative that would offset some of the emerging excitement I hear from you on some of the initiatives there.

Jie Zheng: Yeah. Michael, this is Andrew. Just coming back to your North American question, again, really excited about what we are seeing, especially with Arc'teryx and Salomon. Strong double-digit growth for both of them in North America. You see, obviously, Wilson is predominantly North America, so there was slower growth in the U.S. with Wilson. Tennis 360 continues to grow strong, and we are excited about that. We had strong results in rackets. You saw some slower trends were baseball gloves, golf, and inflatable balls. We continue to do well with bats, but it was a little bit offset by the gloves. The last thing is we do see some sporting goods retailers being cautious with regard to their ordering, so that is driving a little bit of that slowdown that you see.

Racket.

Yeah, I mean, the business is still 90, 90 90, 85% equipment. That's number one number two it just really depends on the velocity of our Tennessee 360, as James talked about we really found a nice format and in APAC in greater China were still searching.

Born in the early stages of that format in North America.

Okay. Thanks, a lot.

Okay.

Yes.

And that concludes our question and answer session I will now turn the call back over to management for some final closing remarks.

Thanks to everyone for joining and look forward to seeing you on the third quarter call in November have a great week.

Operator: Andrew, can I follow that real quick?

Andrew Page: Nope. I guess, Michael, the one thing, the last thing that I want to remember is that, and we pointed this out and Stuart alluded to it a little bit, is that last year, we had a pull forward out of Q3 into Q2. That was wholesale-driven. What happens is it is a tougher comp this year, excluding that pull forward, you would have seen a slight increase in the current year.

This concludes today's conference call. Thank you for your participation you may now disconnect.

Stuart Hazelden: Yeah. In the wholesale channel, excluding that drag, that wholesale would have actually accelerated slightly overall at the group level.

Operator: Okay. Can I follow that with the reminder about low to mid-single-digit growth long-term out of ball and racket? It sounds like you are feeling very good about the Tennis 360 initiatives, a few things in the past. Stores are starting to grow in China. Is there an obvious category that you expect to be persistently negative that would offset some of the emerging excitement I hear from you on some of the initiatives there in ball and racket?

Jie Zheng: Yeah. I mean, the business is still 90% to 85% equipment. Number two, it just really depends on the velocity of our Tennis 360. As Jie Zheng talked about, we really found a nice format in APAC and Greater China. We are still searching for it in the early stages of that format in North America.

Operator: Okay. Thanks a lot. Appreciate it, guys.

Jie Zheng: Thank you.

Speaker 5: That concludes our question and answer session. I will now turn the call back over to management for some final closing remarks.

Stuart Hazelden: Thanks, everyone, for joining. Look forward to seeing you on the third quarter call in November. Have a great week.

Speaker 5: This concludes today's conference call. Thank you for your participation. You may now disconnect.