Morning. Thank you for standing by. Welcome to BIRKENSTOCK's Third Quarter 2025 Earnings Conference Call. At this time, all participants are in listen-only mode. Following the presentation, we will conduct a Q&A session. The company has allocated 60 minutes in total to this conference call. I would like to remind everyone that this conference call is being recorded. I will now turn over the call to Megan Kulick, Director of Investor Relations. Hello, and thank you everyone for joining us today. On the call are Oliver Reichert, Director of Birkenstock Holding plc and Chief Executive Officer of the BIRKENSTOCK Group, and Ivica Krolo, Chief Financial Officer of the BIRKENSTOCK Group. David Kahan, President of Americas, Nico Bouyakhf, President of EMEA, Klaus Baumann, Chief Sales Officer, and Alexander Hoff, Vice President, Global Finance, will join us for the Q&A. Today, we are reporting the financial results for our fiscal third quarter of 2025 ended June 30th, 2025. You may find the press release and supplemental presentation connected to today's discussion on our investor relations website at birkenstock-holding.com. We would like to remind you that some of the information provided during this call is forward-looking and accordingly is subject to the safe harbor provisions of federal securities laws. These statements are subject to various risks, uncertainties, and assumptions, which could cause our actual results to differ materially from these statements. These risks, uncertainties, and assumptions are detailed in this morning's press release, as well as in our filings with the SEC and can be found on our website at birkenstock-holding.com. We undertake no obligation to revise or update any forward-looking statements or information except as required by law. We will reference certain non-IFRS financial information. We use non-IFRS measures as we believe they represent the operational performance and underlying results of our business more accurately. The presentation of this non-IFRS financial information is not intended to be considered by itself or as a substitute for the financial information prepared and presented in accordance with IFRS. Reconciliations of IFRS to non-IFRS measures can be found in this morning's press release and in our SEC filings. Now, I'll turn the call over to Oliver. Good morning, everybody, and thank you for joining us today for our third quarter results. Once again, we delivered against our guidance with 16% revenue growth in constant currency. We continue to grow double-digit in every segment and channel. At the same time, we significantly improved profitability. Gross margin was up 100 basis points to 60.5%, and EBITDA margin was up 140 basis points to 34.4%. Our best third quarter margin ever. We did this in a global environment with pressure from tariffs and currency volatility. We continue to see the shift to in-person shopping, which amplifies our brand. We are a touch-and-feel product, especially for consumers who are new to the brand. We have over 12,000 high-quality touchpoints through our B2B partners compared to our own fleet of 90 doors. That is why this shift in consumer behavior favors our B2B channel over. We are winning at retail, gaining shelf space and taking share. In a flat U.S. market, retail revenue at our top 10 wholesale partners was up 25%. As you do your channel checks for Back to School, you will hear that BIRKENSTOCK is the winner, with very strong sellout and fast inventory turns. Same for EMEA. Retail revenue at our top 10 partners was up 20%. Within our B2B channel, over 90% of the growth came from within existing doors. We are committed to maintaining relative scarcity and managing tightly our distribution growth. In own retail, we accelerated the pace of openings, adding 13 new doors. Our new stores generally deliver a higher ASP and higher units per transaction from day one. We see a return of CapEx within 12 - 18 months. We are on track to reach our goal of around 100 stores by the end of this fiscal year. This will allow us to capture more in-person shopping demand within our own D2C business and allows us to showcase the full breadth of our product assortment. Our brand heat is stronger than ever. No matter if you look at sell-through, full price realization, or our strong order book. This is especially true in the emerging youth market. Our demand is strong across all product categories and target groups. Sales of our classic leather silhouettes grew double- digits. Demand for our iconic styles, such as the Arizona and Boston, remains strong and is accelerating within the younger demographic. At the same time, we are growing in expansionary categories such as lace-up shoes. Closed-toe share of revenue increased by 400 basis points year- over- year. Now, let's briefly review our segment performance. In the Americas, revenue was up 16% in constant currency, with both the B2B and D2C channels growing double -digit. Our B2B business was especially strong. Importantly, we saw no pushback or cancellations following the July 1st price increases implemented in response to tariffs. We opened three additional stores, bringing the total number of stores to 13. In EMEA, we delivered double-digit growth of 13%, while both channels grew double- digit. B2B outpaced D2C, driven by strong sell-through at our retail partners. Our online business started off slower than planned in April and May. However, in June, online growth reaccelerated. We saw healthy growth in our own retail, with same-store sales up in the mid-teens. We further expanded our brand presence with the opening of new stores in the Netherlands and Spain, bringing our store count to 39. The APAC region was up 24% in constant currency. Timing of goods in transit shifted revenue from third quarter into the fourth quarter. We forecast an acceleration in the fourth quarter in line with our expectation that APAC will grow twice as fast as our other two segments for the full year. We opened eight new owned retail stores, bringing the total number of stores in the region to 38. We also expanded our strategic partnerships, increasing our monobrand partner stores by around 20% compared to last year. Our business in China was particularly strong and accounted for 20% of APAC revenue in the quarter. I will now turn it over to Ivica to discuss our financial results in more detail. Thanks, Oliver. I am happy to share with you BIRKENSTOCK's performance for the third quarter of 2025. This is the first quarter since we have been a public company where we saw significant headwind from FX on our reported numbers. The dollar depreciated by about 5% against the euro in the quarter compared to last year. This impacted both our reported revenue growth and margins. FX caused a 330 basis points drag on revenue growth, lowered gross margin by 60 basis points, and adjusted EBITDA margin by 70 basis points. Third quarter revenues were EUR 635 million, growth of 16% in constant currency within the range of our 15% - 17% annual guidance for the year. Reported revenue growth was 12%. B2B growth outpaced D2C in the quarter. B2B was up 18% in constant currency. D2C grew 12% in constant currency. D2C share of business was 38%, down 110 basis points versus prior year. We see sustained strength in our B2B channel from the shift to more in-person shopping. B2B has proven to be the most cost-efficient way to target new consumer groups and usage occasions, both important white spaces for our brand. We now expect B2B growth to outpace D2C in both fourth quarter and for the full year. We are a demand-driven brand. We strategically allocate our products to where the consumer is shopping. Unlike our peers, we own our supply chain. The B2B order book provides predictability and de-risks our planning. Gross profit margin for the quarter was 60.5%, up 100 basis points year- over- year. Pricing, net of inflation, and better absorption of costs related to the part of our facility contributed to margin expansion. This was partially offset by channel mix and the unfavorable currency impact of 60 basis points. Selling and distribution expenditures were EUR 163 million in the third quarter, representing 25.6% of revenue. This was down 80 basis points from the prior year, mainly due to a higher B2B share. Adjusted general and administration expenses were EUR 31 million, or 4.9% of revenue in the quarter, up 40 basis points year -over -year due to higher IT expenses, primarily related to the ERP conversion in the Americas. Adjusted EBITDA in the third quarter of EUR 218 million was up 17% year -over -year. Adjusted EBITDA margin of 34.4% was up 140 basis points year -over -year. This was even despite the 70 basis point impact from unfavorable currency translation. Adjusted net profit of EUR 116 million in the third quarter was up 26% year -over- year. Adjusted EPS was EUR 0.62, up from EUR 0.49 from a year ago, a 27% increase. Cash flows from operating activities during the quarter were EUR 261 million, down EUR 21 million compared to last year due to the timing of tax payments and lower working capital release. We ended the quarter with cash and cash equivalents of EUR 262 million after the repurchase of 3.9 million shares, totaling EUR 176 million. As we continuously improve our inventory efficiency, our inventory-to-sales ratio declined to 33% from 36% in Q3 2024. Our DSO for the quarter were 43 days, in line with 42 days a year ago, even with strong growth in our B2B business. During the quarter, we spent approximately EUR 22 million in CapEx, adding to our production capacity in Pasewalk, Görlitz, and Arouca, and continuing our investments in retail and IT. We are on track to meet our CapEx target of around EUR 80 million for the year. Even with a share buyback we executed in May, our net leverage was 1.7 x as of June 30, 2025, down from 1.8 at the end of Q2. Without the buyback, the net leverage would have been at 1.4 x. Our capital allocation priorities continue to be number one, invest in our business, number two, reduce debt, and number three, opportunistic share buybacks. Even with a buyback, we continue to expect net leverage of approximately 1.5 x at the end of fiscal 2025. We believe we are well positioned to meet our stated growth and profitability objectives. We believe we can manage the impact of the baseline 15% E.U. tariff through the actions we have already taken, including targeted price increases. Pricing is not the only lever we have. Given our vertical integration, additional levers include efficiencies in production, vendor negotiations, the optimization of the product mix, and the allocation of products between the regions. Lastly, regarding FX, in the fourth quarter, we expect the currency headwinds from the weaker U.S. dollar to impact reported revenue growth and margins. At today's euro-dollar exchange rate, reported revenue growth should be about 400 basis points below constant currency revenue growth in the fourth quarter, and margins will be negatively impacted by about 100 basis points, which is reflected in our guidance for the year. Based on results to date and the current trends we are seeing in the business, we expect to be at the high -end of our constant currency revenue growth guidance of 15% - 17%. We still expect adjusted EBITDA margin in the range of 31.3% - 31.8%, despite the drag from a significantly weaker U.S. dollar. I'll hand it back to Oliver. Thanks, Ivica. We are well positioned to drive steady long-term growth and shareholder returns. We are a brand with industry-leading growth, pricing power, excellent profitability, global reach, a very healthy balance sheet, and strong cash generation. During our second quarter call, we raised our EBITDA margin target based on an exchange rate of 112%. Even with the current exchange rate of 117%, I'm confident we will meet our targets for the full year. I would now kindly ask the operator to open our Q&A session. Thank you. At this time, we will be conducting a Q&A session. As a reminder, the company has asked that you please limit yourself to one question and one follow-up and return to the queue. The company has allocated 60 minutes in total for this conference call. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment, please, while we pull for questions. The first question today is coming from Matthew Boss from JPMorgan. Matthew, your line is live. Thanks, and congrats on another nice quarter. Oliver, could you speak to current demand trends and visibility today to the acceleration that you've embedded back to high-teens constant currency in the fourth quarter? On the bottom line, excluding foreign exchange, maybe if you could just provide some perspective on the more than 61% gross margin and 35% EBITDA this quarter, or just sustainability of this pace of improvement. Thank you for the question, Matt. You're correct. Without the FX headwind, the EBITDA margin would have been 35.1% even. This is the best margin in Q3 we ever had. All things being equal, our goal is to constantly drive margin improvement as we scale and grow the business. The demand we saw in Q3 was exceptional. We simply don't always have the capacity to meet the demand. This was especially true for the third quarter for Europe and APAC. Growing at this pace requires also constant improvements in efficiency, and this is where I'm spending a lot of my time right now, to find ways to increase production capacity and create long-term efficiency. Within our own supply chain, we want to meet our strongly growing demand by doing both of these things: improvement in efficiency and building the capacity. As you know, we strive to drive our margin improvement over long -term, of course, and also need to invest in the business to sustain this growth. We are adding automation in manufacturing, investing in IT and infrastructure, and we hope to streamline our processes throughout the organization. What we saw in demand in the market, especially in the third quarter and in the Back to School, but David will have a conversation about this later on, was or is tremendously strong. From our perspective, we don't see any slowdown in consumer demand or anything. At the moment, we're struggling with capacity. That's our biggest issue. Thank you. It's a great color. Best of luck. Thank you. The next question will be from Dana Telsey from Telsey Group. Dana, your line is live. Hi, good morning everyone, and nice to see the progress. Since implementing the price increases on July 1st, can you expand on what the market response has been? What are you seeing in demand given the Back-to-School season we're in, maybe the Nordstrom Anniversary Sale in the Americas? We'd love an update. Thank you. Hey Dana, this is David. Thanks for the question. As many in the industry know, we anticipated the potential tariffs as best we could, and we were very proactive. We shared with our retail partners our specific plan as far back as May, and on July 1st, the price adjustments became effective. I will say the adjustments we made were surgical by nature versus broad strokes, and while they're a bit off of our historic pricing cycle, it's no different than how we have managed this in past years, regardless of tariffs. Now here we are, we're six weeks past the price actions, and as I'm sure everyone's recent channel checks indicate, our velocity and sell-through from July and into week two of August, the period that includes a significant chunk of the important U.S. Back-to-School season, has been exceptional. It's escalated even beyond the selling results we had in Q3, which historically was when we would have high spring, peak sell-throughs. We're very encouraged, and we've seen no impact whatsoever since we took our pricing increases. Thank you. Thank you. The next question will be from Anna Andreeva from Piper Sandler. Anna, your line is live. Great. Thanks so much for taking our question, and congrats. Nice to see ongoing momentum. We wanted to ask regarding the tariffs. With the E.U. tariff now at 15% compared to 10% before August 7th, do you see any incremental impact on revenue and on margin? As a follow-up on DTC versus B2B, historical seasonality of the business is such that DTC is a little slower in 3 Q, but then accelerates in the fourth quarter. Should we expect a similar dynamic this 4 Q? Thank you, Anna. It's Ivica. We went into 2025 with an effective tariff rate of around 11%. We have been exposed to U.S. tariffs before, as you all know. This went up in April to 21%, and this is the additional 10% you mentioned before. Following the E.U.-U.S. trade deal, we now face a 15% baseline tariff on E.U. imports, which we believe is very manageable. Our effective tariff will land somewhere just above 15%, depending largely on the product mix. As you also know, we have some items that are already tariffed at over 15%, and those higher tariffs, historical tariffs, will remain in place. What's really important is, first, we have pricing flexibility. As David said, on July 1st, we implemented pricing actions in the U.S. to offset some of the expected impact with no negative market response. Second, price is not the only lever we have. With a vertically integrated supply chain, we have additional ways to offset through vendor negotiations, manufacturing efficiency, and optimization of our product mix. All in for 2025, we will fully offset the absolute dollar impact of the tariffs, but see a very small negative on gross margin and EBITDA margin, which, however, is already factored into our full-year guidance. Taking the second question as well, Anna, on D2C and B2B. We expect an acceleration in D2C in Q4 of fiscal 2025. However, as mentioned before, B2B growth will outpace D2C in both Q4 and for the full year. What's driving us is the channel mix, and what we've seen in Q3 was mostly driven by the continued trend towards in-person shopping, which naturally favors the B2B channel over D2C. Our brand is a brand that benefits from physical shopping, where consumers can touch, feel, experience the footbed. It's a haptic product, especially for those who are new to the brand and new to the footbed. Our D2C business is still very much a digital platform, and with 90 doors globally, we are not able to capture all the in-person demand within our D2C business. The good news here is that both channels are very profitable, so we are very happy to go wherever the demand is. However, it's very important we are not compromising high-quality distribution and full price realization. We manage inventory in the B2B channel very tightly through our engineered distribution model. Price realization is at over 90%. Stock-to-sales ratios in the channel are very healthy, and our order book is very strong. We are also accelerating the pace of our own store openings, which is why we can capture more of this in-person shopping demand in our own D2C channel. There is no change in our current strategy, which includes leaning in both channels. Naturally, a higher mix of B2B means lower gross margin and a higher EBITDA margin. The opposite is true in our D2C mix, but both are very profitable. One important fact, as you know, is that we own our own supply chain. The B2B order books provide for great predictability and certainly de-risk our planning. Very thorough. Much appreciated. Thank you. The next question is coming from Laurent Vasilescu from BNP Paribas. Laurent, your line is live. Good morning. Thank you very much for taking my question. Can I ask about EMEA gross? It was a bit lower than the mid-teens expectation. Are there any reasons why there were one-time factors for 3Q, and should we expect a low- teens growth rate for this region as a new algorithm going forward? I have a quick follow-up on the gross margin. Hey Laurent, this is Nico. Thank you for your question. I'm happy to give some context on the EMEA numbers. Yes, in our third quarter, we grew 13% in EMEA, with actually double-digit growth in both B2B and DTC, and we further built on a strong third quarter of last year. In a market that was flat to negative, I actually do believe this is a pretty strong result as we continue to be among the best-performing brands, and we continue to take share of many other players. I have to admit this quarter was a more challenging one for our region, and Oliver alluded to that already. Not, and I have to underline this because we are facing a structural demand issue. In fact, we continue to see very strong demand for our product. The challenge this time was that we were simply unable to capture the full relevant demand due to limited production capacity. In other words, we simply didn't have the product at hand to capture the full relevant demand. Allow me to give you some context on the numbers further in regards to trading. Third quarter, we saw strong sell-through results at our wholesale partners of + 20% versus last year. Reorders, which is a direct demand signal, increased significantly along the quarter versus last year. As Oliver said, our same-store sales in retail went up significantly double-digit, another great demand signal. Our price increases with the spring-summer 2025 collection were fully absorbed by the market, and we maintained our full price realization of over 90%. As in Americas, the summer started a bit later than in our core markets than we expected, so April and May were a bit softer. What we saw in June was a full reversal of that trend, and we could see record sales across all channels and partners. What we've seen so far for Q4, that was also part of your question, is that it's going to be a stronger quarter in EMEA and should return to mid-high teens growth. In regards to the consumer, yes, they have been impacted by a lot of uncertainty in the European zone, but I can definitely confirm that there's no deviation for us from a brand health perspective. I can definitely confirm BIRKENSTOCK continues to be one of the chosen brands. Very helpful, Nico. Thank you very much. Ivica and Megan, with regards to the 4Q gross margin, I know there was a lot of noise last year relative on a year-over-year basis. I think GMs were down like 600 basis points. Should we assume if 4Q gross margins are up like 200 basis points? Last call during the Q&A, I think there was commentary that gross margins should be up for next fiscal year. Is that still the case, the way to think about it despite FX and incremental tariffs? Thank you very much. Hi, Laurent. Gross margin was up this quarter by 100 basis points, and there's basically two main drivers behind that. The first and most important is pricing net over inflation, which contributed 120 basis points. The second point is that we continuously see a better absorption with regards to our newest manufacturing facility in Pasewalk, which contributed 80 basis points this quarter. If you compare it to Q2 this year, this is a trend that we are continuing to see and which are the biggest drivers behind gross margin expansion. On the flip side, the drag of FX was 60 basis points, but overall, we continue for this year to come closer to our 60% gross margin target. Thank you very much, and best of luck. Thank you. The next question will be from Randy Konik from Jefferies. Randy, your line is live. Yeah, thanks a lot, Nico. Good morning, everybody. Just on the B2B versus B2C, just so we have a thought process for, you know, into next fiscal year, would you want us to kind of think about, you know, B2B leading from a growth rate perspective over D2C or any kind of thought process change to that, just so we know? You talked about, you know, some good significant improvement in penetration in closed-toe. Obviously, the Boston, etc. Can you give us some perspective? Just round that out a little bit more beyond the Boston, other kind of wins you're getting in closed-toe would be super helpful. Thanks, guys. Thanks, Randy. It's a good time. Again, coming back to your question with regards to B2B and what is driving that and how could you think about it in the terms of next year. We haven't given guidance yet for 2026, naturally. However, what we see is a constant drive toward in-person shopping. This is basically why and where we are serving the demand, where the actual customer wants to be served. This is certainly driving our thought process. This is the reason why we are also seeing that increase in B2B and the demand of our retail partners. With regards to your second question on closed toe, we see an expanded closed-toe share in Q3 by 400 basis points. Looking at the product categories, we see that the non-Boston silhouette is growing at the same rate as the Boston. Across the board and also with the newness that we have introduced, we feel very comfortable on the growth rates we are seeing in the closed-toe silhouette. Thank you. Thank you. The next question will be from Jay Sole from UBS. Jay, your line is live. Great. Thank you so much. Oliver, I want to ask about the durability of the ASP gains that you've seen. With FX and tariffs and price increases because of tariffs, there's a lot of noise around ASP, but it's been a good trend for a long time. How much further into the future can you see good ASP gains for BIRKENSTOCK and why? Thank you very much. It's Ivica again. If you disaggregate growth for this quarter, we see high- single-digit volume growth and mid-single-digit ASP growth. If you look at ASP, this is not only like-for-like price. However, like-for-like price has contributed to that growth. It is also product mix. We see an increased share of closed-toe, as mentioned, 400 basis points in Q3. We also see a continued trend and demand of customers to high-quality executions, so the preference to leather. This is also reflected in the ASP growth. Got it. Okay, thank you so much. Thank you. The next question will be from Adrien Duverger from Goldman Sachs. Adrien, your line is live. Good afternoon. Thank you very much for taking my questions. Could you please comment on the factory expansion plans and how they are progressing versus your expectations? How would you expect the additional supply to evolve over the next three years, particularly given the context you've given today, where supply seems to be the main constraint in the business? Thank you very much. Hi, it's Ivica again on factory expansion and especially Pasewalk. We have said that we are expecting full absorption by end of Q3 2026. We are well on plan, maybe even ahead of that plan when it comes to full capacity utilization. This works according to what we have initially set. Coming back to capacity overall and looking at our longer-term growth algorithm, we said we will be growing by mid- to- high teens. That means naturally doubling the business every five years. We are making sure that our capacity in terms of production, manufacturing, but also beyond that, just considering the logistics network, is able to keep up with the growth. This means additional investments, especially in core CapEx, but also final assembly. This is what we are currently looking at to keep up with the demand that we are seeing generally in the market. This is also perfectly in line with what we've always said: investing in our business in terms of capital allocation remains our top priority. We are well on track to invest around EUR 80 million for CapEx over the course of this year. This is something that you can expect into the future, including additional investments in building up our capacity. Okay, thank you very much on this. If I can just maybe follow up on the wholesale channel, could you please comment on the confidence across the wholesale partners and how you would compare this to like six months ago, for example? Thank you. Hey, this is David. I think we've spoke for a few calls about general shopping being slower, but intentional purchasing for the chosen brands, for the few most successful brands being even stronger. The wholesale partners are certainly the ones that are driving that, and they're mirroring consumer behavior. There's certainly the appetite for more of our product, not just in quantity, but in breadth of styles. We always maintain a high level of relative scarcity. The more we do that, the more we put into the market, and the more the demand is from our wholesale partners. It continues to escalate around the world quarter after quarter. Thank you very much. Thank you. The next question will be from Sam Poser from Williams Trading. Sam, your line is live. Good morning. Thank you for taking my questions. I've got, I guess, two and a half, so I'll ask them. You mentioned the, can you give us a breakout of what the, in the U.S., of what the store comps of the comp stores were versus, you know, as compared to the total? I guess probably about six or seven of your stores are comp. Now that's number one. Number two, can you give us specifically, I know you said it, but can you give us specifically what the reported revenue you're looking at for the full year is based on today, based on the, you know, what that reflects on an FX neutral basis? Three, the tariffs on your product, you were at 11%, it went to 15%. There's only that 4% variance. It's not a stack number. That's correct. Actually, it came down from 21% or so to 15% since you last guided, if I understand it correctly. Hello? Hey, Sam. It's David here. Our comps in our own retail stores were up high teens. Very successful quarter for us. What's happened in our retail stores, even more than in the wholesale partners, is higher transaction value per transaction, higher ASP. The velocity has been very significant. All of the new products that we've introduced, because obviously we've had some winners out in the wholesale world, we're just able to showcase so many more of the breadth of product. We're seeing a spread be much more significant. Very successful quarter in our own retail stores, mirroring exactly what happened at wholesale. Sam, on your question with regards to FX, it's Ivica speaking again. The FX headwind that we've been seeing in the third quarter was significant. It was a 5% depreciation in the U.S. dollar on average in the quarter. The average USD/EUR exchange rate was 1.13 compared to 1.08 in the third quarter. This resulted in a drag of 330 basis points. If you look ahead into Q4, we expect a revenue drag of around 400 basis points compared to where the U.S. dollar is currently trading at, which is 1.17 compared to the previous year. If you look at the entire fiscal 2025, you will certainly remember that in the first and second quarter, we had some currency tailwinds. This turned in the third and is now turning into the fourth quarter into headwinds. Overall, we expect a drag of around 150 - 200 basis points for the full fiscal year. Covering your question on tariffs, the blended rate was 11%, but this is indeed a blended rate. Pre-liberation date, as you certainly are aware, there are some products which had a lower rate than that and some that had a higher rate than that. For those that have been tariffed at a lower rate, the rate will go up to 15%. For those products and materials that had already a historically higher rate, say 25%, this higher rate will remain in place. As such, we expect to be slightly higher than 15%, but depending on the overall product mix. A few months ago, your blended rate with the additional tariffs were stacked. It would have stacked on top of that blended 11%, an additional 10%. Now it's just 15%, which would help you, which is less than what you thought it was going to be three months ago. Is that fair? Yes, it's fair to say that. Compared to the additional 10% reciprocal tariff, which would have led to 21% blended, with the 15% or blended 15%, we would be slightly better. This is true. Thank you very much. Thank you. The next question will be from Ed Aubin from Morgan Stanley. Ed, your line is live. Yeah, hi, good afternoon, good morning, guys. Ivica, first one is a clarification. I couldn't really hear what you said on the DTC in Q4. Did you imply that DTC would re-accelerate from the +12% you printed in Q3 to a mid-teen rate or not, just to make sure I understood it correctly? Number one. The second one is also a clarification. Am I right to assume that most of the goods that you're selling in fiscal 2025 in the U.S. had already been shipped prior to kind of liberation day, and therefore you have very limited, if no, tariff impact, and that it will come in 2026? If you could clarify that, that would be helpful. Thank you. On the first part of the question with regards to D2C, we expect indeed an acceleration in D2C in the fourth quarter of this fiscal year. However, as mentioned before, B2B will outpace D2C in both Q4 and the full fiscal 2025. However, D2C will accelerate in Q4. With regards to tariffs and inventory, generally and more broadly speaking, we have had a very good inventory position, but it's not limited to the U.S. only. Looking at our inventory, it's very productive. It's pre-allocated to customer orders, and certainly a very good inventory position does help to mitigate adverse effects. Just to follow up on my question, that would imply that you had little impact in fiscal 2025, right? Is that fair to say? That's true. The inventory position certainly helped in that regard. Okay, thank you so much. Thank you. The next question will be from Janine Stichter from BTIG. Janine, your line is live. Hi, thanks for taking my question. I was hoping you could expand a bit on the B2B business. You talk about 90% of the growth coming from existing doors. How do you feel about where the ceiling is for growth or growth in shelf space from those existing doors? Maybe you talk a little bit more about what you're seeing from the 10% new doors that you're opening, whether it's sporting goods, the outdoor channel, run specialty. Curious what you're seeing in those newer channels. Thank you. Yeah, we've said, this is David. We've said that 90% of our growth, 90+, comes from existing doors, which means it's more penetration in styles and SKUs and also some depth of inventory. We're very deliberate in expanding doors and especially expanding any new points of distribution. They might be in the professional space. They might be in more run recovery space or outdoor. It is very deliberate. Significantly, the growth is coming from some additional door counts and some key partners, but it's really coming from breadth of styles, additional inventory, and the fact that we're just performing at a level that's significantly above the peer group. I mean, you're looking at a flat business where we're up. Certainly we're taking share, but we're doing it very deliberately. As Nico said, when he talked about retail in EMEA, we never ever compromise the relative scarcity. Okay, thanks so much. Thank you. The next question will be from Mark Altschwager from Baird. Mark, your line is live. Great, good morning. Thank you for taking my questions. I guess just first thinking about the DTC business where perhaps you have some more granular customer data. Curious what you're seeing in terms of sort of new customer growth versus spend per customer or frequency per customer. Obviously, closed-toe penetration growth continues to be a theme here. Just wondering to what extent that's sandals buyers that are also buying closed-toe styles versus the closed-toe bringing a new customer into the brand, which is maybe how those trends may be evolving. Thanks. One quick guidance follow-up as well. Hey, this is Nico. I'm going to give you some context on the DTC trading and also acquisition of new customers, but also how pleased we are with the success of expansionary categories and new categories. What we typically see, and we've been sharing that over the course of the last quarters, is that in our DTC, we have a higher share and a higher growth of so-called expansionary categories. New categories that we expose to our consumers in DTC, be it through our online shop or in our physical retail, are faster adopted by consumers than our B2B partners. In our B2B partners, we also have the power to celebrate the full line in our DTC, whereas B2B partners typically are more safer placing the buy. We use the great success in our DTC business to bring it over to B2B and share with our B2B partners what are the styles, what are the categories that are spearheading in our DTC business. What we also see is whenever we open a retail store, a new store, consumers are coming in and trending towards a higher price product. Our new stores are delivering a higher ASP, more premium product, and also more units per transaction. While our same stores, as David mentioned, are growing double- digit in their sales. That gives us very much confidence on expanding in DTC through our retail expansion plan that is targeted to address the physical shopping trend, while we also spearhead growth in underpenetrated areas for digital. Specifically in regions like APAC, but also Middle East, our digital business is quite young, but expanding really fast. That gives us great confidence that we are with quality expanding our business on the DTC front, while we keep scarcity and the quality in our B2B business. Excellent. Thank you for that caller. On the margin guidance, you're reiterating the full year, but that does imply a fairly wide range of outcomes for the fiscal fourth quarter, including EBITDA margin being down year over year. Just wondering if you could comment on that. Is there a scenario where you see EBITDA margin could be down, or what are the factors that you see driving the low end versus the high end of that guidance range? Thank you. Hey, Mark it's Ivica speaking. Certainly the key point driving that is the volatility that we have seen in currency. It's extremely hard to predict. If you see where things have developed over the course of the year, we feel very comfortable with that guidance, although we can't naturally predict where the U.S. dollar versus the euro will trade. As such, we are very comfortable again on that guidance. There is this part of the equation which is unknown. Thank you. Thank you. The next question will be from Paul Lejuez from Citi. Paul, your line is live. Hey, thanks guys. You gave some color on the DTC business within EMEA. I think slower start and then it accelerated. Can you give some color about what you saw in the other regions within the DTC business throughout the quarter, whether or not you saw an acceleration or deceleration? Also, I'm sorry if I missed this, but can you talk about what your sell-throughs look like within B2B and how that compares to what you're seeing DTC in each region? Thanks. Hey, this is Nico. We've shared sell-throughs at our B2B partners are significantly up, all the way up to 25% in Americas and 20% in EMEA. That gives us a pretty immediate demand signal, as also reorders have been substantially increasing. I think we could, in the two big regions, I'm sitting next to David here, we could see that the summer started a bit softer. April, May came in in our DTC business a bit softer than expected. That was a market-wide, I'd say, phenomenon. As I shared, June was a complete reversal of that trend. It was really record sales at the same level, I would say, in our DTC business in stores. Same stores went up significantly. New stores from day one performed really well, while our B2B partners also pushed sell-through at record rates. We are quite happy to see this in the current market environment where the market is mostly flat to negative. We continue, as I said, to be the brand of choice for our consumers that are making choices, tougher choices, and that are impacted by a lot of uncertainty currently. Our brand heat is definitely unbroken. Were those comments related to EMEA, or did you see that acceleration in all markets in June? That is all markets. That's not just EMEA. Got it. Thank you. Good luck. Thank you. The next question will be from Peter McGoldrick from Stifel. Peter, your line is live. Hi, thanks for taking my question. I'm curious on the closed-toe penetration up 400 bps in the June quarter, which is the seasonally smaller quarter for these products. Could you help us think about the closed-toe rate of growth in the September quarter and how this builds as we look into fiscal 2026? Thank you. Yes, this is Nico again. Closed-toe continued to outpace open-toe, while open-toe shows very robust growth. We are also very pleased to see that non-Boston styles grow at the same pace as Boston. It's not just a one-horse race. You might have seen we are completely sold out on Naples Wrapped. We saw an organic TikTok celebration that made Naples Wrapped this style among youth audiences. We are currently replenishing and coming back early September with Naples Wrapped. I'd also like to mention that Tokio and Lutry are really performing well. It's, again, not just a Boston race. It's really a very diversified business and consumers are enjoying that business. Where that share of business can grow, we shared, I believe, something around 30%. It can grow stronger. We are not at the ceiling yet with closed-toe. Typically, in the autumn season, closed-toe is growing faster than open-toe even further. I'd also like to mention that open-toe is showing very robust growth. It's not at the expense of open-toe. Thank you. The next question will be from Luca Solca from Bernstein. Luca, your line is live. Yes, thank you for taking my question. Maybe a different question, trying to ferret out what you've been doing and what you're planning to do in order to maintain or increase brand momentum and how you are planning to support brand equity in terms of marketing initiatives, collaborations, communication, social media, events, activations, anything that you've planned on the marketing side would be very useful. Thank you very much. Hey Luca, this is Oliver. Thank you for your question. As you know, we are a purpose-driven brand. We constantly introduce the functionality and the purpose of the brand to new audiences. That's what we especially see in our in-person shopping. We just talked about the B2B, D2C thing. It is very strong and the demand for this kind of info treatment is very, very strong in the APAC region. It's also strong in the upcoming markets in EMEA and it's constantly strong in the U.S. and in Latin America as well. We as a brand, we communicate about our functionality, which is not, or maybe it's even the core of any marketing activity, but just not, you know, printing the pictures and make them very big and spend a hell of money for it. It is the core foundation groundwork, what we're doing every day to convince people to try the footbed and come back and buy the second, the third, and the 10th pair. Nothing really special, but very broad-based because as you can see and as you can imagine, if you have such a huge collection and you're globally relevant and you have this growth in every channel, in every product category, in every city and in every territory you're in, it is a very, very big, big animal. What we're doing is something that's really important for the people, we think. Don't forget 1774, our vehicle from Paris, where we are, you know, together with other artists and creatives create a luxury-driven line to promote the silhouettes and the different executions to very hard-to-find new audiences. That's just like, you know, probably the most obvious marketing activity you may count from your perspective as a marketing activity. The brutal truth is we're on this groundwork every single day, all of us. Meeting people, talking about the footbed, try it, and that's the mission. Give everybody access to the footbed. Understood. Thank you very much. You're welcome. Thank you. This does conclude today's Q&A session, and it also concludes today's conference. You may now disconnect your lines. Thank you for your participation.