Good afternoon. My name is Angela, and I will be your conference operator today. At this time, I would like to welcome everyone to the VF Corporation first quarter fiscal year 2025 earnings 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, press star one again. Thank you. I will now turn the call over to Allegra Perry, Vice President, Investor Relations, to open the conference call. You may begin. Good afternoon, and welcome to VF Corporation's first quarter fiscal 2025 conference call. Participants on today's call will make forward-looking statements. These statements are based on current expectations and are subject to uncertainties that could cause actual results to differ materially. These uncertainties are detailed in documents filed regularly with the SEC. Unless otherwise noted, amounts referred to on today's call will be on an adjusted constant dollar basis, which we've defined in the press release that was issued this afternoon, and which we use as lead numbers in our discussion, because we believe they more accurately represent the true operational performance and underlying results of our business. You may also hear us refer to reported amounts which are in accordance with U.S. GAAP. Reconciliations of GAAP measures to adjusted amounts can be found in the supplemental financial tables included in the press release, which identify and quantify all excluded items and provide a management's view of why this information is useful to investors. Joining me on the call will be VF's President and Chief Executive Officer, Bracken Darrell, and EVP and Chief Financial Officer, Paul Vogel. Following our prepared remarks, we'll open the call for questions. I'll now hand over to Bracken. Thank you all for joining us. I passed my one-year anniversary at VF on July seventeenth, coincidentally, the same day we announced the Supreme divestiture. It's been a full year of transformation, and I believe the pace of change won't slow going forward. This is a new norm at VF, and it's exciting. Today, I'll update you on our progress in the execution of the Reinvent transformation program and, of course, on the quarter. But before I do that, let me start with our leadership team. On the year-end, we've changed eight of 11 direct reports. Two of those were promotions. As planned, we made three of these changes since our last earnings call, including the leaders of our two biggest brands. And I'm sitting next to Paul Vogel, our new CFO, who has been with us roughly four weeks. I've always thought of a great leadership team as more of a partnership than the traditional pyramid, and Paul already feels like another great partner. I'm holding him back today to give him some breathing room before he's on this stage, but he is already adding value. But now let me hand it over to Paul just to introduce himself and say a few words. Paul? Thank you, Bracken, and good afternoon, everyone. After one month at VF, I couldn't be more excited about the opportunity in front of us and to be a part of this strong team. It is a privilege to join a company with such iconic brands, and I truly believe we can reestablish VF as one of the best-run footwear, apparel, and accessories businesses in the world. I've already begun to visit our offices around the world, with recent stops at Vans in Costa Mesa and Denver, and an upcoming trip to Europe soon, and the passion our employees have for these brands is clear. In my prior roles, I've seen the power of maximizing brand strength by creating the highest quality product and combining it with a distinct point of view. I also understand that the best way to create an environment of innovation is to operate an exceptionally well-run company, eliminating inefficiencies that slow us down while investing thoughtfully and strategically to grow the business. I'm confident we can drive materially improved profitability, leverage on costs, and improve free cash flow, and developing a roadmap for that is one of my top near-term priorities. While I've been an operator for the past eight years, I spent the beginning of my career on the investing side, and I understand what it will take to rebuild trust with the Wall Street community. Change doesn't happen overnight, but with the leadership team Bracken has assembled, I know we can systematically reach our long-term goals, execute and deliver on a consistent basis, and demonstrate proof points that build over time. I share Bracken's urgency to strengthen VF's balance sheet, reduce leverage, and build a financial model that is operationally best-in-class and sustainable over the long term. I see a tremendous opportunity to unlock significant value from all the brands within the VF portfolio. I look forward to meeting many of you over the coming weeks and months. I couldn't be more excited to be joining the company at such a crucial and exciting time. I will now turn it back over to Bracken. Thank you, Paul. In addition to Paul's recent start, I'm also excited that as of last Monday, Sun Choe is now officially the President of Vans, relieving me of that job. Caroline Brown is two months into leading The North Face. I'm excited about the progress we're seeing from our Chief Strategy and Transformation Officer and our Chief Design Officer, both of whom joined in March and are working away on things you'll see later. Nina Flood was promoted into the Timberland roles just six months ago, and Martino Scabbia Guerrini has run the newly created global commercial organization since we created it nine months ago. In other words, we have a full team now, and you can feel the energy. Now for Reinvent. While we're not yet back to growth, the steps we're taking now will get us there. Remember, this phase is about reducing costs, lowering our debt, resetting the U.S. business, and getting Vans back on track. First, there's a significant potential to improve our profitability, as we all know. During the quarter, we generated a further $50 million in cost savings, part of our $300 million target. We will have executed all actions to deliver $300 million cost savings by the end of the first half of the year, as we guided, and the impact will be fully reflected in the P&L by the end of the fiscal year. We have no intention of stopping there. As we said from the beginning, we're reinvesting some of that back into the business in the key areas of product and brand building, and those savings are further offset by rebuilding of our annual incentive program and inflation on salaries in other areas. But as I said before, we're absolutely committed to more cost reduction, as you'll soon hear more about. We continue to reduce debt and strengthen our balance sheet. We delivered another significant reduction in inventories relative to last year, even as we build ahead of our peak selling season. Inventories at the end of the quarter were down 24% versus last year, or $676 million. Additionally, net debt is down $587 million year-over-year, supporting our plan to delever. Last quarter, I told you our strategic portfolio review was complete. I also said we would provide you an update when we had some news. We announced the sale of Supreme for $1.5 billion three weeks ago. To be clear, I love the Supreme brand, and I love the Supreme team. It's back to strong, profitable growth, but the lack of synergies with the rest of our organization made this a clear choice for divestiture. This allows us to sharpen focus on the core business and also improve our leverage. Turning to the Americas, our platform is now fully operational. As expected, the Americas continues to perform well below our potential, but the decline softened from negative 23% last quarter to negative 12% in Q1. Almost as important to me near term, we continue to be able to forecast the business. We now have eight consecutive months of accurate forecasts. Moving to Vans, we said the first quarter of this year would be similar to the fourth quarter last year, excluding the impact from inventory reset actions, and we actually did a little better than that with some modest improvement, down 21% in Q1 versus 27% in Q4, reflecting an improved trend in its two biggest regions. Importantly, while the headline numbers remain weak, several indicators are showing we're headed in the right direction. EMEA is once again the region which is showing clear, early, encouraging signs, with wholesale up in the quarter for the first time in six quarters, with particularly positive momentum in key accounts. As a result of the inventory reset actions, our markets are clean, and we have space to introduce our new products, which are performing well across regions. The Knu Skool continued to gain momentum and is performing well across regions and is now the number two franchise globally. Other more recently introduced products are also gaining traction, including our advanced skate shoe, AVE 2.0, and UltraRange Neo, and we've launched several new styles in July. As part of our brand elevation strategy, we advanced our Off The Wall collections, unveiling a new collaboration with Franzisk Ugler, showing the depth and breadth of our brand's potential. And with all the excitement and buzz around events in Paris this summer, we had our own event just beforehand, during Paris Fashion Week, where we started with a Paris takeover in June, with a set of grassroots skate activations combined with events in music, art, and design. Finishing off with a disruptive moment when we took over the iconic Sacré-Cœur to showcase OTW and Vans authentic skate culture. We have over 20 sponsored athletes across skateboarding and BMX at the Paris Games. In fact, just today, we won gold and silver in today's women's skate event. We leveraged this exciting time to launch our Always Pushing campaign globally, featuring our top athletes in Paris, Tokyo, and New York. These new products and marketing efforts are resonating with consumers and contributing to further progress in Google Search trends, which continue to move in the right direction across our markets. Now let me give you a quick overview of the first quarter. Revenue was down 8%, which was a little better than expected, demonstrating slight sequential improvement versus Q4, with the trend line improving across almost all brands. Note: this is our smallest quarter of the fiscal year and largely skewed towards the Americas and wholesale. It's worth noting that growth in our DTC business was in line with last quarter, if you exclude Vans. Note, in Vans, we're closing unprofitable stores and non-strategic ones, dampening our growth even further. The North Face was down 2%, with growth in DTC of 8% globally, with positive performance across each of the three regions, displaying continued strong brand health, whereas wholesale was down on a global basis. Across both channels and regionally, the standout continues to be APAC, which grew strongly, up 35%, even as we comp the post-COVID opening quarter last year. Moving down the P&L, gross margin was down 80 basis points from the prior year, in line with the guardrails we gave you in May. To quickly remind you, this is primarily driven by the continued impact of our clearout activities from the Vans product we took back in our reset. Our operating margin was down 360 basis points, largely driven by SG&A deleverage. I'd like to note our SG&A dollars were down year-over-year, and I'd also like to say I absolutely detest delevering a P&L. So you can be assured we are not at all finished reducing SG&A, even as we invest in our own growth turn. As a result, Q1 loss per share was -$0.33, as expected. Looking ahead to Q2, let me provide some guardrails for that quarter. These are all excluding Supreme, both from this year and last year. The overall Q2 revenue trend is expected to show modest improvement versus Q1, in line with our comments in May. Don't get me wrong, we're not back to growth yet, but the decline rate should continue to moderate. To give you some additional color on our two biggest brands, at Vans, we will see modest sequential improvement as we did this quarter. For The North Face, we expect Q2 revenue to be slightly down relative to Q1. But remember, TNF had 17% growth in Q2 of last year. Turning to gross margin, we expect this to be up slightly in Q2 versus last year. Inventory quality has improved, so there's less impact from the flushing of inventory post Vans reset. On SG&A, let me spend a little time breaking this down further. First, Reinvent savings are on track. Second, we will have normalized incentive compensation as well as inflation, as we indicated before. We also have consistently said we'll reinvest 25%-30% of our gross savings. As we head into our holiday season, I decided to pull some of that forward, and it appears, it begins to appear in Q2. To be clear, this is not the end of our cost story. Expenses in Q2 are expected to be up slightly year-over-year. This, combined with further revenue declines, will lead to a higher rate of deleverage in Q2, but we will have more to say about that in October, which I'll explain in just a moment. Moving into fiscal year 2025, we're on track to deliver guidance for free cash flow, plus the proceeds from non-core physical asset sales of about $600 million. This excludes the impact of the divestiture of Supreme. We expect the Supreme divestiture to be completed at some point by the end of the calendar year. Finally, to conclude, we continue to make progress. The quarter improved sequentially relative to Q4 across almost all our brands. We're advancing on Reinvent. Cost savings are on track, and we're committed to more cost reduction. We're addressing the balance sheet leverage ratio with the first step to sale of Supreme. The new platform in the Americas is moving strongly in the right direction, and at Vans, we're seeing the progress we expected. My level of confidence has never been higher. We have an incredible leadership team and dedicated talent at VF. So together, we will make the continued progress on our path to deliver strong, sustainable growth and value creation at VF. To close, I've dropped a few hints about our longer term plans, so let me clarify. I'm excited to announce we'll be hosting a two-part investor event. Part one will be, mark your calendars, October thirtieth in New York, live, and of course, it'll also be webcast, focused on broader VF strategy and laying out the building blocks for a return to value creation. We'll build on that in part two, or the second part, toward the end of the fiscal year, which will focus on our brand and commercial strategies. With that, I'll now open the line for questions. At this time, I would like to remind everyone, in order to ask a question, press star, then the number one on your telephone keypad. For today's session, we do request to please limit your question to one question. Your first question comes from the line of Brooke Roach with Goldman Sachs. Please go ahead. Good afternoon, and thank you for taking our question. Thank you. Bracken, I was hoping you could provide additional color on your plans for the Vans brand going forward now that you have a permanent brand president in place. You talked a little bit about some early green shoots that you're seeing in the brands. Can you elaborate a little bit more on what you expect the path to look like for the brand for the next couple of quarters, both in terms of new innovation, scaling, changes in brand marketing, and maybe any types of marketing that you're pulling forward, regarding SG&A for the next couple of quarters? Thank you. Yeah, I'll save a little bit of that for a little—for the next quarter or two, and of course, by the time we get to the end of the year, when Sunny has a chance to speak to it, but I'll give you, I'll give you what you're asking, I think. I expect you'll see more of the same. We just turned on a new marketing campaign for Vans, which is tied directly to a cascade of product launches. As I mentioned in the opening, in my opening remarks, you know, the new franchises are doing well, and, you know, we've now got 2 of our new franchises, I think, are in the top 5, so UltraRange and Knu Skool. One's number 2, one's number 5. I think it just shows you how responsive we are to new products when they're right. And so you're gonna see more new products as we come through the year. We launched several new styles just this month. Of course, they're not incorporated in what we've done so far this year. On top of that, we've completely revamped our approach to marketing. We've just introduced our Always Pushing campaign, which started in Paris when we had that event that we mentioned in June. And it's now moving right down through everything we do, and you'll see more and more of that as time goes on. You know, our grassroots campaign is well underway, as is our influencer campaign. You may have seen a few celebrities caught wearing Vans just recently. If you Google it, you'll see it. So you're just gonna see more and more of that as you go through the year. This is the kind of energy we need from Vans, and I'm super excited about it. Great. Thanks so much. I'll pass it on. Thank you. Your next question comes from the line of Michael Binetti with Evercore. Please go ahead. Hey, guys. Thanks for taking our question here. Congrats on a nice quarter. Bracken, first off, thanks for the spoiler on today's women's skate medals. Appreciate that. Sorry about that. Sorry. Could you speak to the diverging trends here in North Face with the global brand direct-to-consumer up 8%, ex currency, and then sounds like U.S. wholesale was the issue. Can you maybe just help us roll forward what, you know, what's holding wholesale back right now with good, you know, real-time trends at D2C, how you expect that to trend as we get into the important season for North Face on the wholesale side? ... Yeah, you know, first of all, I apologize to anyone. It didn't cross my mind that would be a spoiler with such good news on our side. But if we did spoil it, it's still good news. Yeah, so on TNF, you know, the underlying reality is we continue to have good, solid DTC growth around the world, and China continues to just be super strong. You know, it's just exciting. Wholesale is relatively weak, mainly driven by traffic and conservatism, I think, on the retail side, both in the U.S. and to some extent in Europe, too. And you can see it on the numbers if you dig into it. I think it's probably a function of a couple things. One is the overall macro environment and also a little bit of skittishness just because of the weather last year. It was so warm during the holiday season. So we're not guiding these, you know, TNF going forward, but I feel really good about the brand. I feel good, really good about the product initiatives that are coming. And I'd say stay tuned. I think TNF's gonna be just fine. Your next question- Thank you, Michael. Comes from the line of Paul Lejuez with Citigroup. Please go ahead. Hello. Hey, Bracken. Curious, within that free cash flow guidance that you reiterated, can you talk about what might have changed within that guidance on a brand, channel, or geographic level? Anything that you are now assuming is getting better or worse versus what you were thinking previously? And where any changes in your working capital assumptions that might factor into what you're looking for on free cash flow now? Thanks. Yeah, you know, I'm happy to say there aren't many changes, you know. So I'd say overall, this is a good reflection that I think are getting a better handle on our forecasting. And it's very much the same in terms of the underlying dynamics as it was last quarter. The only real change will be, at some point, we will pull Supreme out, of course, which is, as you may or may not realize, you know, is pretty back-end loaded, so most of their cash would come into the back end of the year. But other than that, there won't be a big change. Can you quantify that? Yeah. So I can get the- You know, we released the P&L, the filing. So last year it was $520 million and about 20% OI. You know, you can kind of assume that's about what the cash looks like. It's gonna be higher than that this year, so think around 600 and 120. And you know, and I just... We're not sure when this will close yet, but whenever it closes, then the rest of the year, of course, the cash will pull out of it. We'll reset our guidance for that. But it's probably, you know, let's say across halfway through the year, it'll be more than half of the overall cash. Thank you. Good luck. Thank you. Your next question comes from the line of Jim Duffy with Stifel. Please go ahead. Hello. Thanks. Hey, Bracken. Hi, Paul, welcome. Hey. Hey, just to start, a clarification question. Sure. With the Supreme sale, are you done with the portfolio cleanup, or are there additional asset sales contemplated as potentially appropriate? You know, we don't have anything specific contemplated, but I don't think we're ever really done in terms of reviewing our portfolio. So we've certainly finished our portfolio review, at least for now. We'll probably recycle on that on a regular basis, but we will recycle it on a regular basis. There's no specific plans now. This puts us in a good position to pay off the next two tranches of debt, as we promised, and, you know, from there on, it'll be about good, strong cash generation, unless we decide to divest something else in the future. And I'd say stay tuned on that. You know, the October investor day will give you a good sense for how we expect that debts to come down. Great. Thank you. Thank you. You teased additional cost savings. Is that a philosophical point of emphasis, or are you speaking to specific cost savings you've identified and scoped? I'm curious. It is not a philosophical- Call on that in October as well. Yeah, thank you for asking that question, because nobody else did. I was gonna bring it up. It is not a philosophical point. We spent the last four months really scoping additional cost savings. We're not ready to surface with anything yet, but we will talk about that in, in October. We're actually working with an external consultant on that, and we feel really good about our program. Again, for today's session, we request to please limit your question to one question, and your next question comes from the line of Matthew Boss with J.P. Morgan. Please go ahead. Great, thanks. So, Bracken, as we think about your first year at the helm, larger picture, maybe where do you stand on the priorities that you laid out initially? Maybe first, on the management team, any key roles that you're looking to fill from here? Second, I know you cited today sequential improvement, but any visibility to a return to top-line growth as you see it today? And then maybe just last, how you feel about organic free cash flow and debt paydown priorities? Yeah. So I won't, I won't repeat, you know, the, the famous four. They're probably not famous to you, but they feel like a... I feel like I've told you so many times the, those four priorities that I think I said in the, in my first phone call. So I won't go through those, but you referenced kind of a summary of those. Yeah, from a management team, I feel great. I mean, I think we've really got an all-star team, and, it's all I could have asked for. And, everybody's on the, on the floor. Everybody's on the team now. We're about, half of them are, are new in the last month, half of them are not, and it's a, it's really a terrific team. Now, it's my job to make sure that we together work well as a team, so we're really gonna be working on that. In terms of the turn, you know, the Vans' turn and the turn in general in the business, what's, when do I forecast it happening? I'm not gonna give a number today, but I will tell you in October, we'll be ready to talk about that. So I feel very good about the progress we're making. It feels very similar to where I was when I was in my last company, and, you know, I feel like I can see it, and I feel good about it. And in terms of the debt paydown, we'll certainly talk about that in October, when you can expect that leverage to come down. Thank you. Your next question comes from the line of Laurent Vasilescu with BNP. Please go ahead. Oh, good afternoon. Thank you very much for taking my question. Hey, Laurent. Welcome to the call. Hey, Bracken. Hey, I wanted to ask about great to hear about Sun Choe's decision to leave Lululemon to join you. But can you talk about Caroline Brown's onboarding for TNF, what she brings to the table? And then maybe Bracken, I know Paul can't say much, but are you seeing any disruptions from the Red Sea or from Bangladesh, where two key revenues might flow into 3Q? Let me take the last one first. So Red Sea, I think we're pretty stable there now. As much activity and as much challenge as for the humanitarian otherwise challenge there, our workarounds are well in place, so I think we're okay there. On Bangladesh, we do have some disruption, where about 15% of our production comes out of there. You know, there could be, we do have a little bit of risk in our Q2 on that, on the you know, kind of the back end of our Q2. But, I'm not—It's not big enough that I'd make a big deal out of it, and I'm pretty convinced it'll moderate based on the events that have happened in the last 48 hours, but we'll see. Yeah, I think we'll be okay. We're also quite good at moving production where we need to be, so there certainly wouldn't be any kind of long-term impairment if anything happened worse than it is today. If it were to stay the way it is today, it's not the end of the world. On Caroline, I'm just super excited about Caroline's background. You know, she started in luxury. She spent her whole career in apparel. She really knows this business. She has a great eye for fashion and just an incredible passion for The North Face. She's a phenomenal leader. I mean, it just showed up immediately as she walked in the door. We've now got, you know, Timberland tents all over the lobby, and people are having meetings in them, or at least I am. So, she is really exciting to have here. I would point out, Laurent, that something that some of you may not have realized, you know, we are moving super fast here. And a lot of what we're doing, for example, right now, I can't tell you what's what we're doing, but we're doing a lot right now that we're not disclosing. So, for example, at this point last quarter, you didn't know about Sun, you didn't know about Caroline, you didn't know about Supreme. Now, I'm not suggesting we've got people changes or portfolio changes coming. My point is, we just got big activities that are happening all the time now, and the pace is not going to let up. Wonderful. Thank you very much. Thanks, Laurent. Your next question comes from the line of Bob Drbul with Guggenheim. Please go ahead. Hi, Bracken, and welcome, Paul. Thank you. Okay? I guess the question I'd like to focus on is maybe China a little bit, Bracken. Can you just talk more about, you know, what you're seeing, you know, by brand in China and just, you know, how you believe the outlook is there for what's happening? Sure. You know, look, at the end of the day, I think, China in general has been a great story for VF, and it is. The overall market slowed down a little bit, as we all know, but it's still just a fantastic market. I mean, Caroline and I were talking about this today, such a big opportunity for us, not just for The North Face, but for all of our major brands. You know, I think the story in China is very much a story of each brand's story around the world. So, you know, Vans did a turnaround. You know, Vans were really. If you think we're we're changing a lot in Vans or globally, you should see what we're doing in China. I mean, we're really closing a lot of stores, opening stores. It's an incredible amount of churn. Only in China speed can you do what we're doing there. And, they're not company-owned stores, they're partner stores, but boy, it's happening fast. The North Face continues to do extremely well there, as you know, and you can see it in the numbers today. By the way, we're indexing against some very strong numbers a year ago, so that number today is really, really powerful. And you know, Timberland's a work in process. I think Timberland is an interesting brand in every. It's, it's a little different in every part of the world, which is one of the challenges to Timberland. But I think there's that in that lies the opportunity. I'm excited about Timberland, but we're not focused on it for now, at least not for these discussions. Thank you. Thank you. Your next question comes from the line of Jay Sole with UBS. Please go ahead. Hi, Jay. Great. Thank you. Hey, Bracken. Wanted to just ask you about Dickies. Hasn't come up yet. If you could elaborate a little bit on what you're seeing with that brand, what's the plan there? How do you expect to get it back to healthy growth and healthy margin? Thank you. Sure. You know, Dickies is kind of the story of two actions. You know, we moved too fast to try to turn it into a pure fashion brand here in the U.S., and then we really pushed to make it a pure fashion brand outside of the U.S. It continues to do that outside of the U.S., it's doing fine. In the U.S., it's really struggled because we lost our footing in our core work business, you know, and we're really refocused completely there now. So I'd say more to come there. I think Dickies is a fantastic brand and a great business, a really good, strong, solid brand, and we'll get it back on its footing. It'll just take a little time. Terrific. Thank you so much. Thank you. Your next question comes from the line of Mitch Kummetz with Seaport Research Partners. Please go ahead. Hi, Mitch. Bracken, I was hoping you could provide maybe some more real-time color on Vans, how it's performing for back to school. You mentioned modest improvements in the second quarter. Is that really a function of challenging selling? Can you talk a little bit more about the sellout? Yeah, I think the sellout has continued to be down, you know, versus a year ago, which nobody likes, but, you know, the trend is in the right direction overall. I guess that's the main thing I'd say. It's a little too early for us to give you any kind of an expectation for back to school. You know, you just if we had this call just a few weeks later or a month later, we certainly could. But we'll see. You know, I feel good about the progress we're making on Vans. I feel great about the marketing and product initiatives. So I just say, stay tuned. You know, we said we expect six- sequential improvement, slight sequential improvement. We do, and that's the kind of progress I want to see on Vans all the way through the year. Thank you. Thank you. Your next question comes from the line of John Kernan with TD Cowen. Please go ahead. Hi, John. Hey, good afternoon, Bracken. Good afternoon, Paul. Congrats on all the positive changes you've been making. Thank you. Just to go back to Vans one more time. Sure. Obviously, Sun's gonna have a lot to say on Vans in the coming months. What do you think the biggest opportunities for Vans are from a category level? And is there anything to do in terms of right-sizing distribution, whether it be in wholesale or DTC at this point? Well, first of all, let me answer your second question first. You know, we are really right-sizing our distribution, so we're doing quite a bit on both wholesale and DTC. In wholesale, we are pulling back on the value channel in Europe and the U.S., and you know, that's happening real time. We're not talking a lot about it, so we're not going to make a big deal about it, but we are. And in the stores, you heard me talk about closing stores in the U.S. We're also, as I said, closing stores in China and a little bit of churn in Europe, too. So overall, I'd say there's a lot of activity there. What's the biggest opportunity in Vans? I mean, Vans is, Vans is just a fantastic brand, and it just lost the energy. You know, it really lost energy, and it happened. You know, you can see how it happened. You know, we got so over-rotated on a couple of styles. I know you've heard me say this before, but I feel compelled to say it again. We over-rotated on a couple of styles that will always be popular, by the way, but you could overdo them probably almost any point. And we over-rotated them at the same time that the, kind of the, the culture picked them up and ran with them. And that just really drove too far, too much of a buy now kind of mentality into the marketplace. And I think everybody who needed them got them. And there was, there's never been a, "Boy, I don't like Vans anymore," or, "I'm done with Vans," or it's, it's just, "I've got them." In fact, you still see people wearing them. So what are we doing? So we're innovating, and we're also putting in franchise management. So innovating by bringing out new styles. So you've seen, you know, you're starting to see them come, one at a time now. AVE 2.0, the Knu Skool, three new styles this quarter, and we'll have more coming. And, and then some really key collaborations to give energy. And then franchise management, where you're going to see us take the gas out of some of the older styles for a while and then reboost them when we first, at the very top of the culture chain, with key influencers and then flow them down. This is franchise management one on one, plus innovation, which I think is really the model for growing a footwear brand. On top of that, I do think there's a, this is fabulous. I mean, we're only 19% of our business is in, is in apparel, and that's a big opportunity, but, but it's not the most important near-term opportunity. And I know, Sun feels the same way I do about that. So I think there's lots of opportunity on Vans. Awesome. Thank you. Looking forward to seeing that. Thank you. Your next question comes from the line of Adrienne Yih with Barclays. Please go ahead. Hi, Adrienne. Thank you very much. Hi, Bracken. Hi, Bracken. Looking forward to meeting you, Paul. So Bracken, my first question is going to be more of a, I guess, a philosophical one. So you had talked about on the last quarterly call, I think Martino had said five consecutive months of making plan across the portfolio. I'm assuming, based on today's results, that's now at least eight months, consecutive months. Sounds like your confidence at an all-time high, and then we're going to get, you know, a two-parter on the Analyst Day, where typically we get numbers or some long-range plan numbers. Can you speak to that, that your confidence turning into guidance? And then my second question is on gross margins. Can you give us some help on the shaping of the gross margins? Inventories are so clean for the second consecutive quarter. I would imagine that you're not delivering or not having to resort to a lot of vendor concessions. So should we see the wholesale gross margin start to improve meaningfully in the back half? Thank you. Yeah. Well, I'll answer the gross margin comment first. You know, I do, we do expect gross margin to improve through the year. You know, we, we had a pretty big, promotion headwind from gross margins, you know, over the last couple of years, and it should start to come off, as you said, as we go into the back half of the year, especially. And, you know, all things, if all things hold, that, that's our expectation. So I'm, I'm optimistic. You know, to me, gross margin will always be the most important number in a P&L, and I'm an absolute... I'm looking at Paul right now across the table at me, smiling, too. We both are real zealots for this, so we're gonna really be fixated on gross margin. I can't promise you every quarter exactly what's gonna happen, but I expect it to improve over time. And consistent with that, when we talk about our guidance or lack of guidance, when we get to October, you know, we'll come up with a formula for how we're gonna do this. You know, it, I don't want to spoil the fun now. We kind of have a game plan, but we will give you more than we've given in the past, and we'll certainly give you something more on the intermediate term, something that you can look to and see where we're really trying to head to. So without saying any more, because Allegra will elbow me right in the neck, because she's that close, I'll stop there. Thank you very much. Very helpful. Thank you. Your next question comes from the line of Tom Nikic with Wedbush Securities. Please go ahead. Hey, Tom. ... I I am. Well, if that makes you take another question, then, Sure. I'll come up with, looking forward to working with you. You're a little quiet. I just have, yeah, a follow-up on... Oh, sorry. Sorry, can you hear me better now? Yeah, we can. Yep. Okay. I just, I just wanted to ask another question on Vans. You know, you, you've mentioned that the market's a lot cleaner than it was before. I'm just wondering, you know, what are the you know, conversations with wholesale partners like? Are they seeing the positivity in new products, like the Knu Skool, that you seem to be seeing in DTC as well? And just generally speaking, like, you know, what do we need to see to get you know, the wholesale partners to get on board, start to reengage with the with the Vans brand? You know, it's really. Yeah, first of all, yes, they are positive, and I think all the key partners I've talked to are really want us to be successful in Vans because they need us to be successful in Vans for them, which is what it's all about. That's what partnership is. And generally, I've heard quite positive things, and you can see it in our order books out in the future on Vans. Now, those have to be delivered, but I'd say so far, so good. Thank you very much. Appreciate it. Your next question comes from the line of Ike Boruchow with Wells Fargo. Please go ahead. Hey, Bracken, how are you? I'm great. I guess my question would be, I'm sure you're not going to go into specifics, although feel free if you'd like. But, looking at the four brands, from a rate of change perspective on where their growth rates were in the first quarter, where is your greatest confidence today across that portfolio? And maybe rank order them in terms of where that confidence kind of lies, across all four of the brands. Gosh, you know, that's like asking me to pick which child is my favorite. I'm gonna entirely dodge your question and say, you know, I think we see opportunities across all of them. The nice thing is, this quarter, the trend line is pretty consistent across them all. It's slightly sequentially improved, and that's the kind of trend line I'd like to see. I can't guarantee you'll see, but I'd like to see going forward every quarter. I think you'll see it in our biggest brands, and I hope you'll see it in all of them. But, yeah, I don't know how I would rank those, except to say I feel good about the work going on in Vans and The North Face and Timberland. I feel very, very good about it. I think Dickies, while we have a long way to go, I think there's also a lot of activity going into that. I think we'll get there. Got it. Thanks. Thank you. Your next question comes from the line of Simeon Siegel with BMO Capital Markets. Please go ahead. Hey, Simon. Hey, guys. Thanks. Hope you've had a nice summer. You also. So nice job on the gross margin beat. I'm glad to hear it. Nice job on the gross margin beat. Could you, You mentioned the 20 basis points of pressure from unfavorable mix. Could you just elaborate on that a little bit and thought on where that goes from here? Maybe any color you'd be willing to share on ASP, to, to your point about gross margin, ASP versus units for Vans and The North Face the past quarter, and then maybe the same question about inventory, just how that composition looks by brand. You know, it's probably just me, but I had trouble hearing part of that, so maybe if you could repeat it all again, that'd be helpful. Sure. So there was 20 basis points of pressure from mix shift, so I was just wondering if you could elaborate on that and where you'd expect mix to go from here. And then just by Vans and North Face, thinking about ASP and units, how they looked the past quarter, and then inventory composition. So within the down 24%, how does that look by brand? Yeah, you know, I wouldn't be able to give you all the answers to that. What I will say is, I think that from a mix standpoint, that's a relatively small mix change. I think that we expect the mix to be kind of a, probably be a tailwind for the year, but not in a big way, much like you're seeing here. So I think you'll see some mix help. But we'll see. It could go the other way. We've got a... The other issue we have is, you know, wholesale in general. Depends on our wholesale versus DTC growth, you know. So, you know, obviously, if DTC grows faster, it's a mix help. If it grows slower, it's a mix hurt. And I think it will be a good wholesale year. So I'm a little mixed on mix, you know. I think it could be a little bit up, but we'll see. On the ASP versus units, I don't think there's a big story here. You know, hopefully, we'll as we go through the year and as our promotion starts to fade, we'll have a little bit better story. Okay, great. And then any color on the inventory by brand? No, I think we're in pretty good shape across the brands. You know, I'm happy to say I feel very good about inventory across everything right now. You mean in the channel or in our own inventory? I'd say I was speaking mainly in the channel. Yeah, I was, either one. I was more looking at the 24%, just looks very clean to Adrienne's point. So just thinking about if there, is there any divergence there to keep in mind by brand? No, there's not much story there. It's all good, solid improvement across the board. I mean, every single brand we're down. That's great. All right, thanks a lot, guys. Have a great rest of your year. Thank you. Your next question comes from the line of Janine Stichter with BTIG. Please go ahead. Hello. Hi, thanks for taking my question. Hi. Hi, Janine. Two quick ones on Vans. First, on, you know, when we think back to kind of where the brand went wrong over the, over the last two years, it felt like one of the things that could have been improved upon was having more segmentation and tiering different products for different retailers. Is there any update on how you're thinking about segmentation or how you're executing against that? ... And then second one is just on lead times. I know, I know you've talked about how frustrating the long lead times are in footwear in general, and then in particular for Vans. Anything changing there, just in terms of your ability to fast track products? Thank you. I'll answer the second one first. The answer is no. You know, it's really not been an area we've really tried to focus on here in the beginning. I do think the overall lead time, you know, we certainly can put pressure on and do things a little faster, but I do think lead times in general and time to market is a big opportunity. But as I think I said in an earlier call, I'm parking that one for a little while until we get the fundamental business in place, then we'll worry about that aspect of the business model. But I do think there's upside there. On segmentation of retailers, yeah, I think the thing we've talked about is, I think the key is we just got over-distributed into value channels, and so we've pulled back in Europe, we're pulling back in the US, and I think that's gonna pay dividends. Thanks so much. Thank you. Your next question comes from the line of Dana Telsey with Telsey Advisory Group. Please go ahead. Hi, good afternoon. Hello. As you look at the DTC channel, which you had talked about was in line with the fourth quarter, excluding Vans, you mentioned closing some stores on Vans. How should we think about DTC for Vans and the other brands, how you're thinking about retail versus digital? And any expansion or just any more color on the wholesale business, how it's differing by brand, domestically and overseas? Thank you. Retail versus digital. Yeah, I think the footfall in retail continues to be weak. You know, I'd say just generally, you know, a little all over the Western world, you've had worse traffic than I think people expected, whether it's in malls or out of malls. It's not just exclusive to us. A little bit better on e-tail. On the wholesale business by brand, I'm not sure I'd get into too, I'd break that down too much. You know, I think, I guess. Yeah, I probably wouldn't go say there's too much difference across the board. I mean, there's some variations, but probably not notable enough to make a big deal out of. Thank you. Thank you. Sorry I wasn't more helpful, Dana. Your last question comes from the line of Jonathan Komp with Baird. Please go ahead. Hey, Jonathan. Yeah. Hi, thank you. Hey, Bracken, I wanna follow up one more question on Vans. Could you maybe just break down a little more the drivers of the improvement you're seeing in Europe, in the EMEA region, given that it sounds like sell-throughs are still a bit challenging at D2C? So just to get more color on what drove the sequential improvement, and do you think that's a region that could flip positive first for Vans, or are there different dynamics going on? Thank you. Yeah. I mean, I don't have too much to say about it, except that, you know, wholesale was stronger than DTC, as we said earlier, and I think that's because we really have a lot of opportunity in wholesale. Wholesale is bigger, relatively speaking, in Europe than it is in the Americas, of course. So I'm kind of optimistic in general, but I'm also optimistic about EMEA, as you said, turning first. We'll see at what point that happens, but I have been, I think I might have been at least implied in an earlier call, if you ask me what region might turn first, I'm somewhat optimistic that it'll be EMEA first, and partly because of the wholesale component. Okay, great. Thank you. Thank you so much. I guess I'll just... I think that's the last question, was it? Great. Well, thank you all. It's been a really exciting quarter for us with a lot of change. As I said, I don't expect that to let up. Can't wait to see here or both, all of you in October, and Paul will get to say more than just his name and birthday. So he's excited, too, and I'll have a few more people along with us, so I think this is gonna be a really exciting meeting and can't wait to see you all. And now we'll get back to finish the second quarter. So thanks a lot. That concludes today's session. Thank you all for joining, and now-