Thanks, operator, and thank you all for joining Aritzia's first quarter fiscal 27 earnings call. On the call today, I am joined by Jennifer Wong, our Chief Executive Officer and Todd Ingledew, our Chief Financial Officer.

As a reminder, please note that remarks on this call may include our expectations, future plans, and intentions that may constitute forward looking information. Such forward looking information is based on estimates and assumptions made by management, regarding, among other things, general economic and geopolitical conditions as well as the competitive environment.

Actual results may differ materially from the conclusions, forecasts, or projections expressed by the forward looking information. We would refer you to our most recently filed management discussion and analysis and our annual information form to include a summary of the material assumptions as well as risks and factors that could affect our future performance and our ability to deliver on the forward looking information.

Our earnings release, the related financial statement and the MD and A are available on SEDAR plus as well as the Investor Relations section of our website. I will now turn the call over to Jennifer.

Thanks, Beth, and good afternoon, everyone. Thank you for joining us today.

We began fiscal 27 on an exceptionally strong note. Delivering net revenue growth of 43% and a record Q1 adjusted EBITDA margin of 20%.

This drove a 96% increase in adjusted EPS. These results underscore the sustained momentum of our business model and the best in class execution of our team.

By consistently delivering against our 3 primary growth pillars, geographic expansion, digital growth, and increased brand awareness, we are amplifying the Aritzia brand and capturing robust client demand. We continue to successfully scale our footprint in The United States, while deepening client loyalty in Canada.

Best of all, this momentum across the board has carried into the second quarter. Looking at the drivers behind our momentum, our 43% top line growth was fueled by a robust 35% increase in comparable sales.

This performance reflects broad based strength across the entire business spanning all geographies, channels, and brands. In The United States, Q1 net revenue growth accelerated to an exceptional 55%.

This was fueled by widespread demand for our brand across new boutiques, existing boutiques, and digital. In our US retail channel, we benefited from 16 highly productive new and repositioned boutiques over the last year.

We also delivered outstanding comparable sales growth across our existing boutiques, And in digital, accelerated momentum was fueled by our new mobile app and strategic marketing investment. In Canada, we delivered net revenue growth of 25%, Our success was underpinned by exceptional momentum in digital.

Also had robust comparable sales growth across our established boutique network. In addition, our new boutique at Oak Ridge in Vancouver and our 2 repositions in the past year are delivering excellent results.

The reopening of our Oakridge boutique was a proud full circle moment for me. When Aritzia was founded by Brian James-Beaumont Hill and his family back in 1.98 thousand Oak Ridge debuted as our very first stand alone location at just 1.5 thousand square feet.

It was also in the exact shopping center I frequented growing up. And when I first met Brian.

Today, the reimagined 10 thousand square foot space showcases our modern boutique experience while honoring our rich heritage defined by our loyal people and loyal clients. To celebrate this milestone, we hosted a series of specialized events for our people, clients, media, and influencers.

Oak Ridge is a reflection of many of our boutiques, with its long tenured world class style advisors. They are 1 of the enduring strengths of our retail business.

Their passion for fashion and deep knowledge of our product are integral to our differentiated premium client service model, As we continue investing in our boutiques, we remain focused on scaling this model. it is a key element of our brand and part of our everyday luxury offering.

Turning to results in retail. We captured demand across every client touch point, reflecting the balanced omnichannel strength of our business.

In retail, we delivered an increase in net revenue of 39%, Our performance was driven by exceptional comparable boutique sales which was fueled by higher traffic. Our strategic marketing investments continue to help deepen brand affinity and drive sustained demand into our boutiques.

Our growth was also driven by our real estate expansion strategy. Which continues to yield exceptional results.

In the past 12 months, we opened a total of 19 new and repositioned boutiques, Square footage growth was in the mid teens. On average, new boutiques continue tracking to pay back in less than 1 year.

Beating our target at 12 to 18 months. We continue seeing highly attractive unit economics even as we scale into mid sized metropolitan markets.

Furthermore, we are seeing clear proof of concept with our larger boutiques. These 10 thousand plus square foot locations are matching the strong productivity levels of our smaller footprint.

Our digital channel delivered a phenomenal performance In Q1. Net revenue growth accelerated to 56%, led by strong traffic trends, This was fueled by our new mobile app and our investments in full funnel marketing.

Our balanced investments across marketing channels continue to introduce new clients to our brand, while reengaging existing ones. We are connecting with high value clients across a diversified mix of owned and paid channels, our growing brand affinity continues to translate into more efficient client acquisition and stronger retention rates.

We continue to optimize our 3 digital channels through compelling brand storytelling and world class commerce features. First, ongoing website enhancements.

Including personalized search improvements, immersive multimedia content, and site responsiveness, are driving strong conversion and sales momentum. Second, app adoption remains outstanding with sustained monthly downloads and deep client engagement.

Our product initiatives selling content, and continuous release of new features are resonating with clients. This is driving repeat purchasing behavior and higher conversion.

We are seeing clients browse and shop the app multiple times per week. Third, the improvements to our international ecommerce experience continue to pay off, with sales up nearly 170% year-over-year.

In addition, our international marketing pilot showed strong initial results. Turning to product.

Our commitment to offering high quality styles at attainable price points continues to drive outstanding results. Widespread demand across all regions reflects the growing affinity for our brand and deep loyalty of our client base.

Our broad assortment and disciplined inventory management fueled strong trends across diverse regional climates. And the healthy composition of our inventory continues to drive a lower markdown rate.

For summer, we introduced fresh silhouettes and new color from linen to satin to terry fleece and dresses, we drove client engagement throughout the season. At the same time, we saw sustained momentum in the iconic franchises for which we are well known and loved.

In marketing, our world of everyday luxury continued to successfully broaden our reach and introduce new audiences to Aritzia. This fueled another quarter of robust client acquisition.

At the same time, we remain focused on deepening our connection with existing clients and maximizing share of closet. Our bespoke boutique activations also yielded strong returns.

For the highly anticipated openings at Oak Ridge and Toronto Eaton Centre, our activations generated incredible brand heat and community engagement. This drove strong traffic and sales, fueling an outstanding opening weekend.

In May, we achieved a meaningful milestone in the expansion of our supply chain network. The go live of our new 380 thousand square foot distribution center in British Columbia.

This facility features industry leading goods to person technology, enabling reduced pick times and greater order accuracy. The team executed an exceptionally smooth ramp up over a matter of weeks maintaining our high standard of client service throughout.

The successful execution gives us great confidence as we pivot toward expanding our distribution network in The United States. To support our growing digital and retail channel.

As I noted earlier, our strong momentum has carried into the second quarter, propelled by exceptional client demand for our springsummer product. This momentum is underpinned by the enduring strength of the Aritzia brand our disciplined execution, our healthy financial foundation.

Our business has never been better positioned for growth. And we are excited to detail our next multiyear strategic and financial plan this fall.

Meanwhile, our focus remains squarely on our 3 proven growth levers, geographic expansion, digital growth, and increased brand awareness. This fiscal year, we have a strong pipeline of 12 to 13 new boutiques in premier locations and 4 to 5 reposition.

In Q2, we are on track to open 3 new US boutiques, Each 1 is in a new market for us. Birmingham, New Orleans, and St.

Louis. We are also opening 1 reposition in Canada.

In addition to generating incremental top line retail growth, we expect these new boutiques to continue fueling an omnichannel halo effect particularly in new markets. In our digital channel, we are executing on several key initiatives to support continued momentum.

These are focused on channel expansion and digital marketing optimization. Near term priorities include continuing to embed AI into how we work and support clients, releasing new mobile app features and upgrades, optimizing our omnichannel infrastructure, and continuing to enhance our international digital shopping experience.

In terms of brand awareness, our real estate expansion and strategic marketing investments represent proven multiyear levers to help scale the Aritzia brand across The United States. The affinity for our brand continues to grow, leaving us exceptionally well positioned to capitalize on our long runway for growth in The U.

S. And beyond Furthermore, we continue to strategically invest in world-class talent to help ensure our business is built with scalable, profitable growth for the long term.

In closing, I am profoundly grateful to our people whose dedication to operational excellence makes these results possible. The strength of our brand has never been more evident.

With great enthusiasm, we look forward to executing on our strategic vision for the future. With that, I will now hand it over to Todd to discuss the details of our financial performance.

Thanks, Jennifer, and good afternoon, everyone. As Jennifer shared, in the first quarter of fiscal 27, we generated a 43% increase in net revenue to $951 million Comparable sales grew 35% in the quarter.

This was driven by outstanding broad based growth across channels and geographies. In addition, we expanded our adjusted EBITDA margin by 410 basis points, all resulting in a 96% increase in adjusted net income per diluted share.

Our sustained momentum remains underpinned by 4 factors. 1, exceptional demand for our product fueled by extremely well positioned inventory.

2, our digital initiatives led by our mobile app 3, highly productive new and repositioned boutiques with square footage growth in the mid teens And 4, strategic brand and digital marketing investment which generated meaningful traffic growth and new client acquisition. In The United States, first quarter net revenue increased 55% to $638 million.

The strength of this performance was fueled by balanced growth across our new boutiques existing boutiques, and our digital business. In the past 12 months, we opened a total of 16 highly productive, new and repositioned boutiques in The United States.

This resulted in US square footage growth of approximately 25%. In addition, we generated outstanding comparable sales growth our existing locations.

On the digital front, momentum in our business accelerated meaningfully, as our performance continued to be fueled by extremely strong traffic growth. In Canada, net revenue increased 25% to $313 million.

This was primarily driven by outstanding comparable sales growth in both our digital channel and our boutiques. Strong product performance and affinity for the Aritzia brand in Canada continues to drive exceptional client demand.

Turning to our channel performance. Our digital business continues to have exceptional momentum, with net revenue increasing 56% in the first quarter to $285 million Robust traffic growth remained the primary driver of our performance.

This was fueled by the strength of our product our new mobile app, our strategic marketing investments. In retail, net revenue increased 39% to $666 million.

This reflects double digit comparable sales growth across both our U. S.

And Canadian boutiques, as well as the strong contribution from our new and repositioned locations. As we continue to broaden our footprint in The United States, we see ongoing strength in our new boutiques.

As well as consistently strong comp performance in our existing locations. In the first quarter, we delivered gross profit of $478 million.

An increase of 53% Gross profit margin expanded 310 basis points to 50.3% despite a 190 basis points of pressure related to tariffs and the suspension of the de minimis exemption. Our gross profit expansion was driven by IMU improvements, leverage on store occupancy, and other fixed costs, as well as lower markdowns.

SG and A expenses for the quarter were $305 million. Leveraging a 150 basis points as a percentage of net revenue to 32%.

The improvement was primarily driven by expense leverage, and savings from our smart spending initiative. Adjusted EBITDA was a $192 million.

An increase of 81% compared to the first quarter last year. Adjusted EBITDA as a percentage of net revenue expanded 410 basis points to 20.1% compared to 16% in the first quarter last year.

We have now delivered sustained margin expansion for 9 consecutive quarters. This underscores our commitment to optimizing profitability while continuing to invest in our future growth.

Turning to the balance sheet. Our inventory balance was $548 million at the end of the first quarter.

Up 34% from last year. We remain pleased with the quantity and composition of our inventory, which continues to be well positioned to drive sales.

Our liquidity position at the end of the first quarter is strong with $472 million in cash, no debt, and zero drawn on our $300 million revolving credit facility. During the first quarter, we repurchased approximately 565 thousand shares returning $66 million to shareholders.

We plan to continue to opportunistically repurchase shares throughout fiscal 27. Turning to our outlook.

The strong momentum in our business has continued into the second quarter of fiscal 20 Our spring summer product is resonating extremely well, and we continue to fuel robust demand with disciplined inventory management. Given quarter to date trends, we expect net revenue in the second quarter to be in the range of $1.1 billion to $1.13 billion This represents an increase of 35 to 39% compared to the second quarter of fiscal 26.

This is driven by comparable sales growth in the high 20s and the strong contribution from our boutique openings. We expect gross profit margin in the second quarter to increase approximately 250 to 300 basis points.

Driven by ongoing IMU improvements and occupancy cost leverage. We forecast SG and A to leverage 25 to 75 basis points as a percentage of net revenue compared to the second quarter last year.

Expense leverage and savings from our smart spending initiative are partially offset by strategic investments in infrastructure to support our growth. Due to the strength of our first quarter, and the continued strong momentum of our business, we are raising our net revenue forecast for the full fiscal year to 4.55 to $4.75 billion.

This represents growth of 23% to 28% from fiscal 26. Our guidance for the year is underpinned by high teens to low twenties comparable sales growth and the strong contribution from 12 to 13 new boutique openings and 4 to 5 reposition.

We expect gross profit margin to increase by 175 to 225 basis points compared to last year. As a reminder, our outlook includes global tariffs in The United States at 10%, and the ongoing suspension of the de minimis exemption for the remainder of the year.

Our outlook does not yet include benefit of any tariff refunds. We expect SG and A as a percentage of net revenue to be flat to down 50 basis points, compared to fiscal 26.

Our outlook for adjusted EBITDA as a percentage in net revenue is now approximately 19.5%. Primarily driven by improvements in gross profit margin.

In closing, the ongoing strength of our performance further reinforces our confidence in our strategic growth levers. We continue to see a significant runway for profitable growth in The United States.

Our strategic initiatives, including new and repositioned boutique expansions, digital growth, and targeted marketing investments continue to drive momentum and support our multiyear growth trajectory. These opportunities our proven track record of successful execution, and our strong financial foundation, all position us well to sustain our trajectory of profitable, disciplined growth.

Thank you. With that, operator, please now open up the line for questions.

Thanks very much. Good afternoon, Jennifer and Todd.

Guess well done on the strong Q1 guide, the brand strength. To the team's credit, you have had such success recently driving top line and notably same store sales growth including your Q2 outlook.

But this has been against 2-year stacks in the twenties the past year. How do you plan for and approach inventory for fall and winter as you comp these numbers?

It looks like high single digit, low double digits in the back half of the year. Is it simply planned conservatively and airfreight?

I ask because it seems aggressive to think that this elevated rate can go on perpetually.

Hi, Brian. Thanks for your question.

No question that we are lapping extremely robust growth, particularly in Q3 and Q4. But I want to zoom out a little bit on your question there, and we are experiencing fantastic momentum in our business, which we did say has continued into Q2 and, quite frankly, has accelerated slightly into Q2.

And I have nothing but confidence. I have never been more confident in the business as I am right now.

We are very well set up with all of the elements to continue to drive the strength. So we are starting with product.

It all starts-- it always starts with product. We have an amazing range of product.

The assortment is fantastically balanced between client favorites and newness. We absolutely have the right product in the right place at the right time.

We will be opening another 12 to 13 boutiques this year, plus we are benefiting from the mid teens square footage growth of the past year. We have got a slew of digital initiatives on the go.

We continue our strategic investments in marketing. And as it relates to product, we have over the last 24 months, honed our planning and allocation and inventory management aspect of our product strategy.

And the team has done a phenomenal job in optimizing our inventory. Part of our business model and integral part of our business model is our ability to flex our inventory in season to meet demand.

And so that would be a fundamental part of our ability to perform and continue with the strength and meet the business as we continue with 2027.

Thank you. Good luck.

Thank you.

Hey, good afternoon. Congrats on your amazing results.

I was wondering if you could talk a little bit about the fall winter collection that is probably going to roll up in into your, stores in the coming weeks. If you can talk about it from a style perspective, but also from a numbers perspective, a percentage of newness, you know, average price point versus last year.

Any tidbits on a numbers basis would be helpful as well.

Our products strategy, Martin, has not changed. Clearly, our strategy is working.

We will be launching fall later this month, and excited to see the fall launch perform. We will be entering the season as we do every season with a balanced assortment between newness and client favorites.

When you walk into the store once we are fully launched, when you walk into the store, what you will see is roughly 50-50 between the 2. And as far as price points, as far as styles, as far as our franchises, we will continue with our existing products strategy.

And continue to have a range of products that appears to be resonating with the client very, very well.

I think you were asking specifically about Canada. Yeah.

And what we are seeing is the comps continue to be meaningfully positive in both countries, in both Canada and The U. S.

Obviously, our growth is driven by The US. But we are super pleased with the trends that we are seeing in Canada.

Our performance continues to be strong. It has been trending strong.

The last several quarters. We are not seeing anything in our data that indicates a trend otherwise right now.

And so for us, things continue to be strong, and we see that going forward.

Thank you.

Thanks. Good afternoon, and congratulations on the really strong results.

Jennifer, you touched on in your prepared remarks that you had undertaken a marketing pilot for the international business, which showed strong results. I am curious to know if you can share anything maybe a little bit more detail on what exactly that pilot showed you and whether or not the international customer or potentially the go to market strategy there differs at all compared to how it is that you are expanding in North America?

Thanks.

Yeah. It was a very small pilot that we started in May, and I wanna emphasize a very, very small pilot.

We launched with typical performance marketing in digital, paid search, paid social, We did some affiliate campaigns. We kept the 2 localized regions, 2 countries.

And what we saw was a tremendous response a tremendous response both in terms of traffic and conversion. So all of our hypotheses appear to be playing out, and we will continue with the with the pilot.

it is still very early days, but it is a good test. it is a good test for us to see how our product and our brand is perceived around the world.

Thank you very much.

Thanks, and good afternoon. And let me add my congratulations on the quarter.

You mentioned that your the stores are paying back or you keep saying rather that the stores are paying back, in less than a year. Can you talk about how they are maturing and whether, you know, some of these new stores are delivering significantly better than expected performance as they go through, let's say, year 2, year 3?

And then sort of the related questions, particularly in new markets that you are entering, can you talk about sort of the extended halo effect there in both channels?

Yeah. I will take that, Irene.

I hope you are doing well. So, you know, historically, when we look at a comp waterfall, our Canadian stores always open closer to maturity.

With The US stores having a multiyear ramp. But what we are seeing now and really over the last couple of years is that The US stores are opening much closer to maturity.

And we are seeing especially with the, FY 2026 cohort of stores, that those they are opening in a very strong position from a productivity perspective. And then those stores are falling into the comp that we are seeing across the business, which obviously is extremely strong.

So there is still growth in those new stores once they are open, but they are they are falling more in line with how we are comping across the business. And from a halo perspective, you know, we continue to see approximately a 70% lift in the first year in new markets in our ecommerce business.

So that is compared to the growth across the rest of, say, The United States in the case of The US. So we are seeing a 70% lift there.

So it is it would continues to be very meaningful contributor to our overall growth. And we are really pleased with the performance of the new stores.

Thank you.

Really, the strength is driven by a confluence of factors. it is never any 1 thing.

it is it is everything working so well together. And gaining the momentum together.

Of course, as I have said, in the past and even on this call, it starts with product. Product is central and at the heart of what we do.

And we have absolutely gotten the product right. We have the product that are client is loving.

And new clients are loving. And so we have had an exceptional response to our spring summer product.

This is, of course, supported by extremely well positioned inventory. We continue to see strong momentum in e commerce.

that is led by the mobile app. The retail square footage growth, of course, contributes And we have, you know, we have increased strategic investments in marketing to help keep awareness up and to help keep us top of mind with clients and attract new clients as well as I said, keep us top of mind with existing clients.

So all of that working together they are all synergistic together, and not 1 of those things on their own would be it cannot be any 1 of those things. it is all of it working together.

That makes sense, and have a great summer. Thank you.

Thank you.

Thank you. Good afternoon in Vancouver.

And I will also add my congrats on a on a great quarter. I just wanted to ask a question.

You have talked a lot about kinda new client acquisition. Obviously, the investments in digital and further expansion in The US as well as international is driving I was just wondering if you could give any color on any differences or nuances in shopping behaviors between new and existing clients in terms of things like traffic or basket size or frequency of repeat shopping?

We short answer is we see consistency across both cohorts. We are loving the fact that our client base is growing, that we are acquiring new customers, but we are also seeing returning clients continue to love our product and love our everyday luxury experience.

So know, really, you know, the productivity that we are seeing is consistent across both cohorts. We are not seeing any market differences in any of those metrics.

And again, really pleased and really encouraged, and really happy to see that we have a broad appeal across such a broad base.

that is great. Thank you, Jennifer.

Thank you.

Great. Thanks taking my question and congratulations on the very strong results.

Maybe just to follow-up on Canada, pretty strong growth. Any sense of how you are thinking about the back half growth, you know, just a sense of that?

And then just on that on that point, maybe could you elaborate a little bit more on the profile of the new Canadian customer that you are acquiring? Is it like, maybe in terms of, like, age or anything like that?

That would be very helpful to start with.

Yes. In terms in terms of how seeing the back half of the year, we are seeing we are seeing our trends continue.

We are not seeing any there is nothing in our data to indicate that anything's going to change 1 way or the other. So we are anticipating that the trends will continue in Canada as we have been seeing them.

And certainly, you know, we have a very broad appeal across 3 generations effectively. And we are as know, as the younger cohort grows into our target, We are acquiring new customers.

But certainly, with our broad product assortment and with the expansion of the different occasions that we developed product for, we are able to accommodate and meet the needs of a client as they go throughout all the different phases of their life, which I think is so amazing. So I think that between those 2 things, we are picking up new customers, and that is also what is driving the loyal customer who continues to shop with us throughout many, many, many years.

Got it. And thank you so much for that.

And a couple of follow ups just for Todd. I think you mentioned for the full year, the implied comp is high teens to low 20s.

Could you talk about just to confirm kind of like how are you thinking about the back half implied comp And then just 1 also quick follow-up. I see that like, in the in the tables on the release, there is a mention you know, you guys there is a mention of investment in a joint venture.

Could you elaborate what that is about? Thank you.

Yeah. Thanks, Mauricio.

So, yes, as you said, the comps embedded in the FY 2027 numbers are the in the high teens to low twenties. Driven by the continuation of the momentum in the business.

And for the second quarter, we are forecasting comp growth in the high twenties. And then for the back half of the year, we are forecasting comp growth in the double digits.

As we lap 2 years of exceptional growth. And keep in mind that at the top of the range, our 2 year stack comp is consistent for the first 3 quarters and our 3-year stack in the fourth quarter actually accelerates.

So, you know, we are we are extremely pleased with how the business is performing. And that is reflected in the revenue guidance for FY 2027, which is now 4.55 to $4.75 billion 23 to 28% total growth.

On top of 35% total growth last year. From a the joint venture perspective, that is an acquisition of the piece of property effectively for a future store location.

Corey. I was muted.

Is there a way to quantify the and if you did, apologies. I am kinda just a little bit late.

The benefit of the app from a sales standpoint And then did you say in the prepared remarks that the productivity of the larger format stores is approaching smaller format. And if that is true or even if it is not, are you kind of thinking about expanding sort of overall square footage across the fleet Thanks.

Yeah. Thanks, Dylan.

From an app perspective, it is contributing incremental sales in the high single digits. For the digital business, and that was what occurred in Q1 and what is included in our guide.

We are I mean, we are extremely pleased with the app. We have 2 million downloads thus far, and which is in far exceeding our initial expectations.

And we are seeing approximately 30% of our digital business now transacted through the app. So it is you know, a great tool for us to drive, you know, conversations with our clients and increase our personalization.

From did you wanna take the other 1?

Oh, I was going to. You go ahead.

There we go. Oh, on the on the because I think it was in my prepared remarks that I talked about the larger the larger boot sizes, and we are seeing tremendous success with the larger footprint.

Specifically, the sales per square foot are in line with our highly productive smaller boutiques. And if I understand your question, we have we have, in fact, gone lot with a-- gone larger with our boutique sizes.

If you recall 10 years ago, we talked about an average boutique size of 6 thousand square feet. A few years later, we discussed average stores boutiques or average boutique sizes being 8 thousand square feet and now we are at 10 thousand plus.

Obviously, we have had some flagship stores that are considerably larger than that. And so our unit economics now are based on 10 thousand square feet.

These stores contribute more in terms of the dollar, obviously, because they are bigger. They are contributing more and are on the on a dollar basis.

And that is because their sales per square foot are in line with the original smaller boutique. We are extremely pleased with how this strategy has evolved.

And, of course, we explore all scenarios on a case by case basis. And we will adjust as we see fit.

But right now, we are really, really thrilled with where we are at with these larger format stores. They are they are producing and paying back.

I appreciate it. Thanks.

And sorry to do too. Thanks.

Oh, yeah.

Hey, guys. Thanks for taking my question and adding my congrats on another great update.

I just wanted to ask if you could talk a little bit more about you know, where you prioritize incremental investment dollars as sales continue to come in stronger than expected. I know marketing is still growing with sales, but just any additional color there or initiatives on the app or anything like that?

Thanks.

Yeah. We are definitely investing in the app, but I would not categorize it as, you know, we are investing across the business.

We have whether it is our distribution center network investment, with the opening of our new DC here in Vancouver, and the future investments that will be required in The US network. We have tech and AI enablement.

Investments occurring. We you know, digital road map, which includes the app, but there is also lot of site enhancements.

Occurring. And then we also have customer initiatives as well.

So it is it is very broad based. The investments that we are making.

And, you know, we are as we have we have said, you know, balancing margin expansion with investments in our business. And, yeah, we are excited about the long list of initiatives we currently have underway.

Great. Thanks.

Hey, guys. Let me add my congrats.

Todd, 2 for you. The revenue raise to the year, no raise on the leverage you expect for the year.

So I assume there is incremental investments you want to make. Can you just elaborate on where those dollars are going?

And then sorry if I missed it, but can you quantify the tariff and the de minimis impact on gross margin in the first quarter and what is embedded for the rest of the year? Because I assume that because of how tariffs have worked out, there is going to be a benefit that flips around in the back half of the year.

So if you kind of walk us through the math, how those line items kind of play out, that might be helpful. Thank you.

Sure. So the from an SG and A perspective, we are expecting to be flat to down 50 basis points.

For the full fiscal year. So we are expecting some leverage for the year.

But as I literally was just saying, the you know, we are balancing that margin expansion with investments in our business. And the investments are literally what I was just communicating.

And the expansion of our EBITDA margin know, is coming from the gross profit expansion. And I think that is how we see it.

On a go forward basis because we do have know, a long runway ahead of us of growth, and it is going to require investments to ensure we are building the infrastructure and, you know, enabling that growth with investment. From a tariff perspective, you know, we talked about the 190 basis points.

Of pressure in the first quarter. In the second quarter, we expect minimal incremental pressure from as compared to last year.

Because the tariffs began to ramp in Q2 last year. And then in Q3 and Q4, we actually expect a modest tailwind from tariffs.

There will be a, you know, a slight benefit. And I should say or reiterate that we have tariffs currently at 10%.

So we have throughout this whole period, we have been providing our guidance based on whatever is in effect at the time. So our guide today is based off of 10% tariffs continuing.

That may change in July, at the end of July and potentially go up 20%. If that were to occur, it would be an approximately $25 million to $30 million of pressure in the back half of the year from the increased tariffs.

But, you know, remembering that we have actually not yet included any benefit in our outlook for the tariff refunds. Which depending on how we treat them, would likely offset any pressure from the incremental tariffs.

And the $1.90 for Q1, is that tariffs plus de minimis? Or is that just tariffs?

it is tariffs plus de minimis. You know, 3-quarters-plus tariffs.

Got it. Thank you.

Hey, Maybe just on gross margin guidance specifically. Todd, it is it looks like the way the guidance is structured, you are embedding, like, very muted gross margin gains in the back half of the year, but you are also referencing probably have this tariff tailwind.

So what are the items that come in and start muting the year over year gains in gross in the back half of the year that you are thinking about?

Yeah. So in the second quarter, we are forecasting 250 to 300 basis points.

Of expansion, which is continues to be driven by the IMU expansion and leverage on occupancy costs. And for the back half of the year, expecting gross margin to expand approximately a 150 basis points.

And the moderation is driven by 3 things. 1 is a reduction in leverage.

From the normalized revenue growth. 2 is the normalization of markdowns.

In the back half of the year. You know, last year, we had extremely low markdowns.

At the in the back half of the year, and so we will be lapping those this year. And then third, the addition of and depreciation cost from the new distribution center here in Vancouver.

So those are really the puts and takes. But, you know, I think it is worth reminding that for the full fiscal year, we are forecasting now a 175 to 225 basis points of gross profit margin expansion.

Okay. Thank you.

Great. Todd, I wanted to ask around gross margin.

I think this is the first time in literally, in company history where you have had a gross margin above 50% for the quarter. So I wanted to ask about how you think about perhaps what is transient versus what is more permanent within that margin structure for the first quarter.

And it is probably not reasonable to expect this for this year based on how you have guided, of course. But is it perhaps feasible to start maybe thinking about this as a level in the out years where that might be achievable and or sustainable?

Thanks so much.

Yeah. Okay.

So quite a few things there. But first off, it is a record gross profit margin.

For Q1, actually, for any quarter. And really pleased with all the work that is gone on over the last several years to achieve that.

We are I think we would categorize it in the middle innings of our gross profit expansion. So we do have a number of years ahead of us where we feel like we will be able to continue that expansion.

I think we will we will provide more specifics on that in the fall. But, yeah, I guess, at the end of the day, we are pleased with what we are seeing and, I do not I do not think that we would you know, expect strength in the back half of this year to continue.

And that is because of the pressures that I aligned. So while we are extremely pleased with where we are at and pleased with where we are going to end the year, We I mean, maybe what I would add, if this is where you are going with your question, is that the improvements are structural.

These are improvements that are not transitory for the quarter here that allowed us to achieve the record We do see these things being structural and fundamental to our model.

Our business model.

Great. Thanks so much.

And then just a quick follow-up, Jennifer. I think you had mentioned in the Q&A that Q2 accelerated Curious if you could call out or speak to perhaps what drove that, if there was anything specific from a product perspective or whether anything you are seeing would be really helpful.

Thanks so much.

Yeah. The if we exited Q1 slightly accelerating into Q2, and I, you know, I do have emphasize it was slightly accelerating.

And it is-- I have said it a couple of times already on the call that it is not any 1 thing. it is a confluence of many strengths and many factors of how we execute.

Starts with product, I sound like a broken record, but product is at the center of what we do. We have an exceptionally talented team.

We do a fantastic job who I mean, I cannot sing their praises more, whether it is the creative team, our product business team, our sourcing and manufacturing team, all of them all of them and all of the teams within the whole product division really are fundamental to our success in any quarter. And then that combined with the store opening, the marketing, our digital acceleration, and all of our focus on digital.

We are doing a lot of really great things in digital. It all comes together to produce these phenomenal results and these extraordinary results that we were able to deliver this quarter.

Congrats on the quarter. Maybe for Todd, based on your guidance, SG&A is expected to grow kind of in the teens for the second half of the year.

Wondering how much of that level of investment will continue into beyond fiscal 2027. Is it is that a bulk of that gonna be done this year?

Just trying to get a sense of, I guess, much of it is isolated to this year? How much of the investments is going to be ongoing beyond this year?

Thanks.

Yeah. I think we would expect the investments in SG And A To Continue Into Next Year and Beyond.

You Know, We Have As I Said, A Number Of Tech And AI Enablement Initiatives Underway, Our Digital Road Map, The Distribution Center Network Expansion In The US, does drive operating costs as well, those projects. So all of that will continue.

Into next year, and, you know, we expect our well, potentially, we would see some SG and A leverage Looking out over the next several years, the vast majority of any margin expansion that we were to accomplish would be coming from gross profit.

Thanks.