A：The speech mentions that certain statements made on the call may constitute forward-looking statements within the meaning of federal securities laws. A caution is provided that actual results may differ materially from those expressed or implied in the forward-looking statements, and important factors that could cause actual results to differ are discussed in the company's press release and SEC filings.

A：During the call, the company is discussing non GAAP financial measures and the change from segment operating income to segment EBITDA. A reconciliation of non GAAP to GAAP financial measures is provided in the press release and can be found on the company's website.

A：The company was pleased with fourth quarter net sales and adjusted earnings per share, which met the midpoint of guidance ranges. The outlook for fiscal 2025 was positive, with the business showing encouraging signs of recovery, especially from the holiday pressures. The company made progress in strengthening its operational foundation and expects to sustain momentum and continue improving its profitability.

A：The company completed construction of its new state-of-the-art distribution center in Llion, Georgia, which is a significant infrastructure investment. Additionally, the company continued investing in technology, data, analytics, and artificial intelligence, as well as advancing strategic sourcing initiatives.

A：The company's outlook for fiscal 2026 assumes building on the encouraging momentum seen early in the first quarter, particularly at Tommy Bahama. The priorities remain focused on executing the business strategy, diversifying sourcing, and improving operational execution. The company aims to leverage low single-digit sales growth into meaningful earnings improvement and continue generating cash for reinvestment and maintaining a strong balance sheet to create long-term shareholder value.

A：Specific priorities for each brand in fiscal 2026 include: Tommy Bahama focusing on building on momentum with improved assortment balance, key in-stock programs, and alignment with customer demand; improving brand storytelling, hospitality performance, and marketing approach to drive demand and retention. For Lilly, the focus is on sharpening assortment strategy, improving pricing architecture, personalizing storytelling, and optimizing distribution. Johnny Was aims to execute the brand revitalization plan, improve EBITDA, and expand distribution while continuing to leverage the shared operating platform. The emerging Brands group will accelerate brand growth and improve merchandising tools and allocation across channels.

A：The company is taking a disciplined phase approach, initially focusing on areas with the clearest near-term return on investment, including marketing, e-commerce, enterprise productivity tools, and selected IT applications such as developer productivity.

A：In the fiscal year, consolidated sales decreased 3% to $1.48 billion. Sales in full-priced brick and mortar locations and e-commerce were down, driven by a total DTC comp of negative digits. However, outlet sales grew, and food and beverage locations saw a positive comp due to new location additions. The wholesale channel decreased by $13 million, primarily due to the decline in the specialty store market.

A：The company's most important department store customers saw positive sales at Tommy Hilfiger and Johnny Was, with negative comps in the high single and low double-digit range, respectively. Sales at Lululemon were driven by a positive comp in the low single-digit range, and emerging brands had sales growth in the low double-digit range.

A：Adjusted gross margin contracted one basis point to 20.3%, primarily driven by higher tariffs of $30 million or 200 basis points. However, sell-throughs were strong at most important department store customers, and the ability to grow or maintain market share was noted despite negative comps.

A：The company expects net sales between $1.475 billion and $1.533 billion, approximately flat to up 4% compared to sales of $1.478 billion in the prior year. Sales growth is expected in segments like time, Bahama, Lilly Pulitzer, and emerging brands, partially offset by a decrease at Johnny Was. The guidance also anticipates a total comp of approximately flat to positive 3% and includes mid single-digit increases in brick and mortar and retail channels, along with a low double-digit increase in food and beverage locations.

A：Tariff rates for the full year fiscal 26 are assumed to remain generally consistent with the incremental rates put in place during fiscal 25. The company is not incorporating any benefit from the recent Supreme Court decision or subsequent actions on other tariff matters and is not assuming any refunds of tariffs previously paid. Using these assumptions, the company expects total IIPA-related tariff headwinds of $50 million or an incremental 150 basis points of gross margin impact and a dollar per share impact.

A：SG&A expenses, adjusted to remove depreciation and amortization, are expected to grow in the low single-digit range, primarily due to increased software-related costs. Interest expense is expected to be higher by $10 million due to higher average debt levels.

A：The estimated impact of increased losses on EPS due to the opening of the new distribution center is $5 million or 25 cents per share.

A：The anticipated adjusted effective tax rate for fiscal 2026 is approximately 25% compared to 24% in the first quarter of 2025. The increase is primarily due to expected shortfalls in stock-based compensation vesting during fiscal 2026.

A：The new distribution center in Lions is expected to improve the efficiency and flexibility of the company's distribution network, supported by a modern layout and state-of-the-art automation. In the short term, it will lead to additional depreciation costs and some offsetting reductions in cash operating costs.

A：The anticipated costs for the first quarter include a gross margin impact of approximately 60 cents per share from higher tariff costs and a higher mix of promotional and clearance sales, partially offset by a higher mix of direct to consumer sales. There are also additional costs related to the new distribution center, increased compensation, and a higher effective tax rate.

A：The expected range for adjusted EPS in the first quarter of fiscal 2026 is between 1 dollar and 20 cents and 1 dollar and 30 cents.

A：The assortment changes at Tommy Bahama have positively impacted their performance with mid single-digit sales momentum since the back half of January. The consistency of these results gives the company a lot of confidence. The best sellers on the men's side include the M-field polo and the Boracay pant, which have seen improvements, and the new Boracay short for spring is also contributing to the business growth.

A：Women's clothing categories such as dresses, wovens, shorts, and pants are performing well, and specific items mentioned in marketing materials like Mailer have been selling well, which is a positive sign.

A：Sustaining momentum is primarily dependent on having the products that customers want. Issues with tariffs and other factors impacted the company's performance last year, but they are addressing these challenges more effectively this year.

A：The shift towards Direct-to-Consumer (DTC) sales is expected to positively impact gross margins, while pulling back on wholesale slightly also helps. Sales at major wholesale doors are performing well, and the impact of DTC sales, once they become a comp, will significantly contribute to the bottom line if the company can achieve positive comp sales.

A：The impact of Sacks' closure is expected to vary among wholesale partners, with some like Macy's, Bloomingdale's, Dillard's, and Nordstrom positioned to benefit from Sacks' exit. The company has good relationships with these partners and plans to adapt as the market evolves.

A：The company plans to pay down debt, resulting in a meaningful reduction in the debt level, following the dividend raise. Lower capital expenditures (CapEx) are expected due to decreased store investments and a carryover from last year, allowing the company to focus on reducing debt.

A：The outlook for gross margins is positive, with the company expecting to leverage expenses and minimize the impact of growth on margins. Despite facing tariff headwinds, the company believes it can maintain or improve its gross margin percentage. There is potential upside if current tariffs rates remain or improve, as the company did not factor in any refunds for past payments, suggesting a more stable margin going forward.

A：The company believes paying dividends is important, having paid one every single quarter since going public in 1960. Over the last 10 years, the dividend yield was around 10%, and there was a recent increase of a penny a quarter. The company expects CapEx to come way down and return to normalized levels, allowing for more free cash flow.

A：The marketing efforts are focused on better storytelling that emphasizes the special and unique aspects of the brand to a broader audience. The merchandising strategy involves having the right silhouettes, fabrications, and price points, along with innovation and newness in products. The company is seeing benefits from this work, with the weekly sales and margin report showing almost all green results.

A：The merchandising work that involved investing more inventory dollars in specific product categories, such as dresses in the $200 to $300 price bucket, is paying off and showing benefits in sales results.

A：The full impact of the merchandising work will not be evident until the fall product line hits the floor, which is scheduled for July 30s.

A：The new 'core essential' items are solid-colored pieces, such as tops, pants, and skirts, which complement the store's embroidery and printed products. These items help women complete outfits and provide visual merchandising variety in the stores.

A：The company is making the interiors of the stores less overwhelming and more welcoming to shoppers. A key wholesale customer was very positive about the new approach and increased their budget for the brand, which is an encouraging sign.

A：The company believes that February's extremely cold weather impacted their comp sales, which were not great that month. They expect better comp results going forward as weather patterns normalize, particularly benefitting brands like Tommy that are more East Coast-centric and thus affected by weather conditions there.

A：Promotional events in the first quarter impacted Johnny's business with a higher proportion of sales during those events. For the full year, the expectation is that gross margins will move forward, despite a slight regression in Q1. This is due to a decrease in the number of promotional days, better inventory levels, and buying more in the right categories with appropriate levels.

A：Inventory planning is being ported across the entire company, with Lily being the next brand to see the impact, several months behind Johnny. Tommy is the last brand to really get going on this now, with no visible impact expected before Tommy's spring 27 collection. The changes are expected to significantly improve sales, margins, and customer satisfaction and transform the profitability of the business.

A：The Alliance facility will bring logistical benefits by being closer to the core of the Tommy market, reducing the guesswork in retail replenishment. This will allow for quicker replenishment, leading to stores carrying less inventory. As a result, individual stores can rely on quick replenishment and reduce their buffer stock, which will be a huge benefit once the facility is operational and the right volumes are achieved.

A：The company has implemented a tool that provides detailed analytics on price points that work well for the business. This tool is based on Jim Roy or gross margin return on investment and is helping to adjust imbalances in inventory investment across different price points. The goal is not to change prices but to design the future line into the price architecture that works best for the business, as illustrated by the example of the $2 to $300 price point bucket for dresses.

A：Traffic conversion has been a challenge, but the primary positive trend has been in average order value, which is a result of both average unit price and units per transaction. Despite okay traffic numbers, it's the strong growth in average order value that is the key driver of the company's performance.