All right, we're going to keep on moving. Thanks, everyone. So my name is Ike Boruchow, Softlines Analyst at Wells Fargo. I'm here with Carter's CFO, CEO Doug Palladini, Richard Westenberger. So thanks for being with us. A lot to talk about. I think I'll start at the highest level, Doug. You know, I think you were named CEO in March, so almost 12 months under your belt. Getting there. So, maybe just let's talk about the biggest positive surprises you've seen since you took the job. What's kind of been the most pleasant surprise to kind of once you've been to the new company and what you've learned? Yeah, the inherent value of the brands, for sure, which is one of the reasons I took the job, Ike. I know we know each other from the Vans and VF days, but I love heritage brands. I love brands that have really organic stories to tell. Now, this is a company that was started 160 years ago, the OshKosh brand 130 years ago, so there's a tremendous amount of latent equity built over all that time. And just understanding the best way to unlock it and how to do that in a way that really resonates with consumers, that's what it's all about, so that's been the highlight there. We also have a tremendous talent base in our organization. I have a great leadership team that Richard is on with me, and we have some real bench strength in leadership at Carter's as well. So it's about unlocking the talent, unlocking the equity in the brands. It's all there. It just needs to be directed. Yeah. No, that makes sense. I mean, look, it's one of the most recognizable brands out there. Your share in the category is super high. But clearly, the last couple of years have been a little volatile. Maybe just to take that question and flip it, what are the biggest challenges that you noticed when you started? And I'm sure you've already been making progress on those. But what do you think the biggest hurdles are to kind of get the company back to the successes that it's seen in years past? Yeah, we have to invest. We have to invest in the products. We have to invest in the design intent to make the fabrication of the products to make sure that we are really in step with today's young consumer, the Gen Z parents that are starting families that are so valuable in our economy. And we need them to choose our brands first. And we haven't invested appropriately to do that. And the second thing on the investment front, I would say, Ike, is that we need demand creation, not just in terms of more of it, but we need demand creation that talks to the quality and the style of our products, the equity, the power of our brands, like I talked about, unlocking that. And it's less driven by the transactional mindset that you've seen where it's all about price, price, promotion, price. So then maybe to you or Richard, just to that point on reinvestment, so how do we think about that? Is that just demand creation? Is that something within the stores? How do we think about what exactly that means? Yeah, I think that the demand creation area is a great example where we are going to spend more. Our benchmarking indicates that we well-index other well-branded companies in terms of what they invest in marketing. And so we've started to make those investments. We're starting to see some of those returns here in our fourth quarter performance. And we'll do more of that next year. We're going to test our way into it. We're going to step our way into it. We're not going to spend it all on day one. Doug and I have a great partner in our marketing organization, particularly our new CMO, very analytically based. As the cold-hearted CFO, I want to make sure that we're going to get a good return on that investment. And so we're going to step our way in. But that's a great example. There are no big looming investments that we haven't made in terms of infrastructure or technology. We've been making investments over the years. Always more to be done there. But I think the marketing investment in particular is a great example where we've under-indexed. But it's really about driving more productivity throughout the organization, particularly in the store base. So you've heard us or seen us pull back a bit in terms of new store openings. It's all about driving more productivity, more traffic to those existing retail stores. And I think that'll be a good answer for us. As you've kind of dug into that topic of reinvestment, are there things that you've been kind of more focused on or as you're digging into it, is it social engagement? Is it the stores themselves? Is it attracting new customers? How do you get the new mom? Maybe it's a little bit different, the tactics you would use versus several years ago. What are some of the initial learnings that you might be able to share? Yeah, well, I think the lessons are that our target customer gets her information in a very different way than she did in the past. I think social media, influencers, all those things have been new channels of engagement for us with consumers. That's where a lot of the decision-making and discovery takes place. We want to play in that space as well. Yeah. Well, Doug, so Richard mentioned the holiday. You guys put out some results for us on Friday. Can you elaborate a little bit? I mean, it looks like your DTC business was very strong. Your wholesale business was much stronger than planned. Maybe just anecdotally, what you saw through the holiday period, what the customer reaction was, just things that maybe helped you learn a little bit more as you're kind of going into this turnaround? Yeah, a few things that really stood out to me. First of all, the fact that we have sort of diversified our attack. Our offense is really diversified. We performed beyond our expectations in each of our channels, wholesale, international, retail. Every age category outperformed our expectations. So I love the breadth and that it's all moving forward in the right way. I think that's a great place to start. The second thing that really stood out to me is that there's been a lot of questioning of whether or not we were going to be able to maintain our momentum while we have raised prices. We have. Fourth quarter, our third consecutive quarter of comp store growth, we are able to maintain higher prices, higher AURs, less promotion without the unit degradation that has traditionally come with AUR increases in our business. So I think that bodes very well that, again, the equity is there in our brands. We just have to unlock it. Now we talk more about our products and our brands and less about the price. That is, I think, also a very powerful reason to believe from holiday. Is there anything to draw from that? I feel like in the past, your customer had been somewhat more price sensitive. And it looks like your AUR came in well above what you had planned. And also the sales were there. So anything different that you saw with your customer's response to pricing in general versus what you guys are doing underneath that? You know what, Ike, there are consumers who come in the door of the store. And the first thing they say is, "Where's the clearance rack?" That's OK. We love those people. We're not trying to trade them out for somebody else. We're trying to add a new segment. And what we are finding is the new consumers that we are attracting, they come from a higher household income. And they are much more open to newness and to higher prices. We are also mixing into better and best product buckets with them at a higher degree than our existing consumer base. So they are much more open and interested in the higher levels of make that come in some of our products. The final thing I would say is we have several places inside of our store where you will find clean ticket worlds. Little Planet, which is our eco-friendly, sustainable, just beautiful clothing, all very organic in nature. Otter Avenue, which is our new toddler-specific brand. Even Purely Soft, our sleepwear that comes within our Carter's brand, those are all fairly clean ticket in our world, and those are growing exponentially for us as well, so this new consumer returning to growth in revenue also meant returning to growth in the number of consumers in our file, our known consumer group, and they are mixing into this better and best bucket, which has been great for us. That all kind of ties back together. We need to acquire a new consumer who's not shopping only the clearance. We have to spend money to get the new consumer in. Is that kind of how this flywheel started to develop? And in all fairness, it's also consumers that we've lost. I think we have lapsed consumers that have questioned whether we were the right brands for them. And we are working hard to earn back their trust and respect as well, which I think we're being successful doing too. So it's existing consumers, it's lapsed, and then it's net new that we're focused on all three of those areas. Can you give a little bit more context around pricing, maybe at a higher level? What kind of price or AUR have you seen or did you see, I guess, in 2025? What's the expectation for 2026? I mean, you've elaborated some of these things on the last call. I'm just curious. Can you talk about that at a higher level? Sure, well, OK, the Captain Obvious statement, everything went up in price. Everybody raised prices. There's no place to hide from that. And we were the same. Our key accounts were the same. Our peers were the same. There's really two worlds that are most important to us to live in when it comes to this higher-priced environment. The first is to retain the value for which we are known. Value for us has three components. It's price, but it's also style. And most importantly, it's quality that we're known for. That's part of our equity. So maintaining that value equation is most critical to who we are. But it's also vital that we remain competitive. When we say competitive, every day we're looking at a group of similar brands and similar products and making sure that we're within a tolerance range in pricing, irrespective of channel, that we are priced within that range. As long as we stay within that range, we know we'll be good. If tariffs went away, which is, I know, one of the questions you had for us, right, what happens to pricing? What's more important is that we remain competitively priced and that we maintain that triumvirate of value that's so critical to who we are. Got it. Yeah, I mean, the tariff one seems obvious given I feel like you guys are one of the companies that's been hit hardest on margin from that. So look, I know that's out of your control. So we'll keep our fingers crossed. Let's talk about the parts of it that we do have control over because I think those are important. The pricing, again, we're all in the same boat. I really want to give a shout-out to our supply chain team because what they have done to diversify geographically our sources and be as flexible as possible to move when we had to move. You're in India one day. You're not the next. Then you may be able to go back in. China's the most expensive. Then it's maybe not. Their flexibility has been outstanding. They have saved us a tremendous amount of money. Our COGS, our FOB, those savings as an offset to the incremental tariff expense have been meaningful. So it's not just price. There's the other things that our team has done that I think helps lessen the pain that we've all had to endure. Let's talk about stores. I feel like you've, in your first 12 months, talked about something that I think investors have talked about for a few years, which is the brand just might have a fleet that needs a little bit of pruning, and I think you mentioned about 100 stores that you've identified for closure over the next couple of years. Can you kind of give us some more insight into what drove that thought? Maybe some what are the stores you're looking at that you want to close? What are the hurdles, and how do you kind of see the DTC channel evolve as this kind of takes place? Yeah, it's actually about 150 stores that we've highlighted for closure, those not so geographically focused as much as our lowest margin stores. We want these changes to be accretive to our business. There will be a revenue hit that comes from closing the stores, but we also believe we will transfer a healthy amount of that revenue to other places as these stores close, so about 30 last year, about 70 this year, about 50 next year is the cadence that we're thinking about. Again, lower margin in terms of what they deliver to us. We want our stores, we want anything that says Carter's above the door, whether that be in a virtual door or a real door, to be the best expressions of our brand, and over time, some of the locations our stores are in just aren't relevant anymore. The world that consumer shops in today is so different than it was before the pandemic. These are all 10-year leases. So it was just time to update. So closing 150 stores, yes. Critical to remember, that's only one of the levers we can pull because we're not going to cut our way to growth. We're going to grow by doing the right thing for our consumers and by making these retail stores the best expressions of our brand. We can remodel them. We can relocate them. And we can open new stores where it makes sense to be as close as possible to our consumers. That's what we're focused on. So a more informed, deeper data set of where we should open stores and why based on our consumer trends, then where do we relocate? Where do we remodel on top of that to create the sense that these are the best possible expressions of our brand? The true destination where you're going to get this level of service that you would expect from a specialty retailer. Is there any more detail you can share on those stores, meaning either the revenue or the four walls? I assume the four walls are obviously below. But are any of these stores losing money? Are the majority losing money? Do they underperform on volume? Just kind of curious if there's anything else you can share. Richard answers the tough questions. I'll defer to him. So across those 150 stores, it represents around $110 million of revenue. And I would describe them as marginally profitable, some losing a bit of money, some making money. In total, marginally profitable. And so we have a lot of experience with closing stores over the years. Historically, 15%-20% of a closed store's volume will transfer to a nearby location. So the flow through then of those saved sales, those recovered sales, is actually very, very high from a profit point of view because you're already leveraging the existing cost base that's in place. We also have a terrific e-commerce business. We think there's an opportunity that some of those customers are going to be retained from a digital point of view. So it should be accretive. That's how we're modeling it, that we'll lose the revenue. But it's going to be a good answer from a profit point of view. And how does e-com kind of play into all of this? I assume your e-com mix goes up at the end of year three of this. I mean, is that fair? And then overall, direct-to-consumer margins three years out should be inherently higher based on the revenue that you're losing versus what you are growing. Yeah, we're reasonably penetrated today with our e-commerce operations. It's about a third of our U.S. retail revenue, which is pretty well penetrated. We have a terrific e-commerce business. We are very well integrated across the U.S. DTC business today. We have all the omnichannel capabilities. I think that's the way the consumer is shopping with us today. They expect a seamless experience across all the channels in which they're engaging with us, and we see that continuing. Margin expansion in the retail business is an imperative for us. We have got to drive more productivity. The company will not be successful in growing its operating margin if we're not able to improve the profitability of retail, so it's a high priority for Doug and myself. One note I would add just in terms of consumer trend and the way consumers are using our platforms, much more research, price comparison, looking for what they want to find online, yielding the final transaction in the physical store. That's been a major trend this year, and it's been a major traffic driver for us, so it's a plus. And then wrapping that into wholesale, again, wholesale business looks pretty solid for holiday. How do we think about your distribution footprint? What's the plan? Are there any big changes coming over the next couple of years? And then maybe to that point, elaborate on what you guys said in your last call, which was your Amazon business kind of transitioning from Simple Joys to branded. Just kind of curious how that fits into that. Maybe I'll start, and then you can jump in, Richard, if that's OK. I've had the good opportunity now to meet with most of our key accounts on the wholesale business. That group has changed so fundamentally since COVID. Department stores have really moderated, obviously. You have mass grabbing a lot of that share, and then the upwelling of what's gone on in off- price has been remarkable. The T.J. Maxxe s, the Burlingtons of the world. It's been incredible to see, so we are going to continue to serve department stores. They're great lifelong partners of ours, but they're not opening doors anymore. Who is? We're going to grow with the accounts that are growing, and we are positioning ourselves continually as the number one national brand in those places. We want to be a destination. What we're hearing from the accounts is that consumer, the new parents, are gold. The lifetime value of the new mom, of a Gen Z mom, wow. They really want to attract them. What is the so what of that? The so what of that is that the footprints dedicated to our space in these retail environments are growing. So the opportunity for us is growing commensurately as the number one national brand. And where we're positioned as a premium to their private label, it's very powerful for us. So we have a very good relationship with our key accounts, our wholesale team. It's almost like the symbiotic relationship is a daily thing. It's powerful. I've seen the way that we work together. And I think as they see the value in those consumers, we are poised to grow with those accounts. The lumpiness of some of these things you have going on, just to go back to the Amazon, is lumpy the right word? Does that create some volatility? I guess can you walk us through the next 12 months of how the wholesale business should kind of come together? Sure. So wholesale in the U.S. for us is about $1 billion of our $3 billion of revenue. About half that business is what we term as our exclusive brands business. So these are brands that we've developed for the principal mass channel retailers. It's Target. It's Walmart. It's Amazon. Of those three, Amazon is the newest relationship. And it's also the smallest of the exclusive brands. We created Simple Joys for Amazon a number of years ago at a time where that was the right answer for us. Since then, I think Amazon has meaningfully changed in terms of how it manages brands. And so we were at one point kind of their private label, kind of their house brand, which meant that we participated in promotions differently. We had different visibility on the site. For a lot of different reasons, Amazon has changed that. And so we think the right path going forward is to offer more of our core flagship brands, so Carter's, OshKosh, Little Planet. We think those are going to be the growth vehicles over time. So I think you'll see Simple Joys kind of wind down over some period of time. We're going to do that thoughtfully. It's still a great brand. It still drives a tremendous amount of business for us and for Amazon. But we think the bigger opportunity over time is to grow those core brands. And I agree with Doug's characterization of the rest of wholesale. Wholesale is a terrific business for us. It's a high-margin business. It's still an enormous number of points of distribution for us. But I think the portfolio is going to evolve over time. I think you're going to continue to see the traditional department stores are going to continue to be served in a different way, and I think that's a customer set that's still important to us. But the shift that we've seen over the last number of years, the shift to the mass channel has been dramatic, and so I think the exclusive brands will continue to be the engine. But there's great opportunities in the clubs business, and to Doug's point, the off price or the promo channel represents a considerable opportunity for us. That's where she's shopping today. That's where my family is going to shop, and so we want to make sure we have a presence there. I think the last topic for both of you to bring up is I think three months ago, before you even had the upside in holiday that you had, I think you were comfortable to say you're expecting growth in sales and earnings in 2026. Anything else you can elaborate on? I mean, for a company to do that would be a good thing, especially as you battle tariffs and you're shutting stores and you're dealing with some of the things you just mentioned on wholesale. So I guess just how do we get there? What are the building blocks that you're able to share with us at this time? Yeah. No crystal ball predictions. But of course, that remains our expectation. That is what the objective is that we have set for ourselves. When I started, I said, "25, we're going to grow again." That was important to do. We did it. Now we've had three consecutive quarters of comp growth in retail to back that up as well. '26, I'm saying the objective remains the same. We have a lot of work to do to get there to make that possible. You'll remember from last Q that we really rethought what productivity meant to our company. Just a smaller company. And we had to respond to that. We had to respond to that from the number of people that worked there, from the number of styles that we manufacture. Every way, every which way, we had to think about stripping complexity out of our business so we can focus on what's really important. What is most important to us is growth that is long-term, sustainable, and profitable. Not growth driven by discounts. Not growth that's driven by one-time events that you're then unable to anniversary the next year. But growth that is long-term, sustainable, and profitable. That is how we are going to begin to return to the shareholder value that our shareholders deserve. That is first and foremost. Second most important thing to me is a brand focus. We have not spent enough time talking about each of our brands. Again, how is that so obvious? How How do you miss something so obvious? But what is existential, and most parents may have noticed, as kids get older, they love denim. Overall, our denim jacket, our jeans, those are icons. Those are cherished. Those are things that parents put away after the kids are grown. We need to lean into what that means for OshKosh and what it could be. That's very different than what Carter's should be. We just launched a toddler-specific brand in Otter Avenue. That's a very powerful opportunity for us as well. So each of our brands has to have a chance to become what it fully can be, irrespective of the other brands in our portfolio. And I don't know if we've always done that. Sometimes we've said, "Well, it worked for Carter's. Let's do it for OshKosh as well." I don't know if that's necessarily the best thing. So allowing each brand to develop its own identity, I think that's another thing that will be a major unlock for us for future growth. Yeah. Well, no denim cycle for newborns. No. Yeah, good learning. Look, we appreciate it. Congrats on the holiday.