Thank you and good afternoon. Before we begin, I would like to remind participants that certain statements made on today's call and in the Q&A session may constitute forward-looking statements within the meaning of the federal securities laws.

Forward-looking statements are not guarantees, and actual results may differ materially from those expressed or implied in the forward-looking statements. Important factors that could cause actual results of operations or our financial condition to differ are discussed in our press release issued earlier today and in documents filed by us with the SEC, including the risk factors contained in our Form 10-K.

We undertake no duty to update any forward-looking statements. During this call, we will be discussing certain non-GAAP financial measures.

In the fourth quarter of fiscal 2025, we changed our measure of profitability from segment operating income to segment EBITDA. You can find a reconciliation of non-GAAP to GAAP financial measures, including segment EBITDA, in our press release issued earlier today, which is posted under the Investor Relations tab of our website at oxfordinc.com.

Now I'd like to introduce today's call participants. With me today are Tom Chubb, Chairman and CEO, and Scott Grassmyer, CFO and COO.

Thank you for your attention, and now I'd like to turn the call over to Tom Chubb.

Good afternoon and thank you for joining us. I'm glad to be here today to discuss our fourth quarter results, the progress we made in fiscal 2025, and our outlook for fiscal 2026.

We were pleased that fourth quarter net sales and adjusted earnings per share, helped by late January momentum at our largest brand, Tommy Bahama, landed at the midpoint of our guidance ranges, excluding charges associated with the bankruptcy of Saks Global that were not known when we last updated our outlook. While we operated against an uneven consumer backdrop during the holiday season, with pressured traffic and conversion trends across much of our portfolio, and a highly promotional marketplace, the actions we took throughout the year to strengthen our business helped deliver improving trends late in the fourth quarter.

The holiday quarter unfolded broadly in line with the pressures we described last quarter, particularly in categories and assortments most affected by tariff-related sourcing decisions and a highly promotional market. Despite the challenges of higher tariff costs and a competitive environment, our efforts to strengthen the supply chain and diversify sourcing helped us protect strong gross margins and maintain healthy inventory levels.

Importantly, absent the impact of higher tariff costs, gross margin would have increased versus the prior year. As fiscal 2025 concluded, we were encouraged by the improvement we saw as we exited the holiday season and entered our important resort and early spring periods.

Comparable sales, led by mid-single-digit positive comps at Tommy Bahama, improved and turned positive for the total company in late January. In the first quarter of fiscal 2026 to date, comps at Tommy Bahama have remained mid-single-digit positive, while comps for the total company have remained modestly positive.

At Lilly Pulitzer, first quarter comps have run below our plan, which we believe is largely attributable to colder weather along the Eastern Seaboard, including Florida and the Southeast, the brand's most important markets. At Johnny Was, while comps remain negative, the business is performing in line with our expectations and improving through the quarter as our marketing and merchandising effectiveness actions begin to take hold.

Quarter to date, business in the Emerging Brands Group is quite strong, with comps well into double digits. We are especially encouraged that performance improved as we moved into resort and early spring, when our product offerings were better aligned with customer demand compared with our holiday assortments.

We view that improvement as particularly meaningful because these are seasons when our brands are especially well positioned, given their connection to warm-weather lifestyles and the occasions that matter most to our customers. While the environment remains uncertain, these trends reinforce our confidence that the actions we have taken are gaining traction.

We also made meaningful progress in fiscal 2025 to strengthen our operational foundation. Shortly after year-end, we completed construction of our new state-of-the-art distribution center in Lyons, Georgia, and began receiving initial inventory shipments.

Lyons represents the most significant infrastructure investment Oxford has made in many years, and we are proud of the teams who brought it to this point. As we indicated previously, we do not expect meaningful near-term financial benefit during the early stages of the ramp, but reaching this milestone is an important step in strengthening our long-term operating platform.

In addition to completing Lyons, we continued to invest in technology, data and analytics, and artificial intelligence, while also advancing our strategic sourcing initiatives to further diversify our sourcing profile. Early in fiscal 2025, approximately 40% of our apparel and related products were expected to be sourced from producers located in China.

Through the actions we took during the year, that figure declined to slightly less than 30% of our product purchases in fiscal 2025, and our annualized run rate entering fiscal 2026 has been reduced to approximately 15%. Together, these actions have increased our flexibility and better positioned us to navigate continued uncertainty in the marketplace.

Turning to fiscal 2026, our outlook assumes that we build on the encouraging momentum we have seen early in the first quarter, particularly at Tommy Bahama. While the tariff situation remains fluid, and we face meaningful tariff pressure in Q1 that we did not incur last year, we believe the actions we have taken to diversify sourcing and improve execution across the business will help limit the impact on earnings as we move through fiscal 2026 and allow us to leverage low-single-digit sales growth into meaningful earnings improvement.

Scott will provide more detail on the factors shaping our outlook, but our priorities are clear: sustain momentum, improve profitability, and continue strengthening our brands for the long term. Stepping back, our operational priorities remain consistent and straightforward regardless of the macro environment: serving our customer, protecting the integrity of our lifestyle brands, and generating cash so we can reinvest thoughtfully in the business, maintain a strong balance sheet, and create long-term shareholder value.

In an uncertain consumer environment, success comes from controlling what we can control and staying focused on execution. Each of our brands has specific priorities for fiscal 2026 tailored to its opportunities, but they share a common thread: a focus on what makes each brand special, the product, the storytelling, and the experiences that keep customers engaged.

At Tommy Bahama, our top priority in fiscal 2026 is to build on the momentum the brand has generated, with comps in the mid-single-digit range in the first quarter to date. We believe that momentum reflects the work the team has done to improve assortment balance, strengthen key in-stock programs, and better align product offerings with customer demand.

In fiscal 2026, we are focused on sharpening merchandising, elevating brand storytelling, improving hospitality performance, and evolving our marketing approach to build demand, deepen retention, and reach new audiences. We believe that combination positions Tommy Bahama to deliver improved profitable growth while reinforcing its position as a leading premium lifestyle brand.

At Lilly Pulitzer, we are focused on a set of strategic levers designed to unlock more sustainable profitability while positioning the brand for long-term growth. We see meaningful opportunities to sharpen our assortment strategy, improve pricing architecture and allocation effectiveness, strengthen our connection with the core customers through more personalized storytelling, and optimize Lilly's distribution and channel mix in ways that support both growth and brand awareness.

At Johnny Was, our priority remains executing the brand revitalization plan we've been building. That begins with product, as we work to bring greater cohesion to the design process, refine assortments, and create a more seamless commercial model across retail, e-commerce, and wholesale.

At the same time, we remain focused on the merchandising discipline, go-to-market consistency, and marketing effectiveness needed to improve execution and stabilize performance over time. We believe these actions, along with the leadership changes we announced in the third quarter, will strengthen the foundation of the business and better position the brand for the future and result in a meaningfully improved EBITDA for the year.

Within our Emerging Brands Group, our focus in fiscal 2026 is on accelerating brand heat, expanding distribution in a disciplined way, and continuing to leverage our shared operating platform to drive profitable growth. This group continued to provide encouraging growth and energy in fiscal 2025, and we believe there is meaningful opportunity to build on that momentum through stronger storytelling, better merchandising tools, and more effective allocation across channels.

Across our portfolio, we are taking a disciplined, phased approach to developing our data and AI capabilities, initially focused on areas where we see the clearest near-term return on investment, including marketing and e-commerce use cases, enterprise productivity tools, and selected IT applications such as developer productivity. We are starting with practical use cases while continuing to strengthen the data foundation needed to support more advanced capabilities over time.

As always, I want to express my deep appreciation for our teams across the enterprise. Their resilience, creativity, and focus on our customers are the foundation of everything we do.

With that, I'll turn the call over to Scott for more detailed commentary on our financial performance and outlook.

Thank you, Tom. As Tom mentioned, we finished the fourth quarter and full fiscal year '25 with top-line results within our guidance range and bottom-line results within our guidance range, excluding $0.19 per share of charges related to the Saks Global bankruptcy.

Consolidated net sales in fiscal 2025 decreased 3% to $1.48 billion. Sales in our full-price brick-and-mortar locations and e-commerce were down 3%, driven by a total DTC comp of negative 4%, partially offset in our retail channel by the addition of new store locations.

Outlet sales were also down 2%. Our food and beverage locations grew by 4%, driven primarily by the addition of 4 new food and beverage locations added during the year, partially offset by a slightly negative comp.

Our wholesale channel, which has continued to be pressured primarily from the decline in the specialty store market, decreased $13 million or 5%. Despite the decline of the specialty market, we have been pleased with our sell-throughs at our most important department store customers and our ability to grow or at least maintain market share.

By brand, sales declines at Tommy Bahama and Johnny Was were driven by negative comps in the high-single and low-double-digit range, respectively, while sales at Lilly Pulitzer were driven by positive comp in the low-single-digit range. Our emerging brands continue to be a bright spot, with sales growth in the low-double-digit range as the brand continues to grow and mature.

Adjusted gross margin contracted 190 basis points to 61.3%, driven primarily by higher tariffs of $30 million or 200 basis points. Absent tariffs, a higher proportion of net sales occurred during promotional and clearance events at Tommy Bahama and Lilly Pulitzer, were partially offset by lower freight costs to customers from successful contract renegotiations during the year, along with a change in sales mix with a higher proportion of DTC sales.

Across our 3 major brands, consumer responses continue to be strongest during our promotional and end-of-season clearance events and to our new and innovative fashion products, continuing a trend from the last couple of years. Adjusted SG&A expenses, which had been adjusted in the current year to remove depreciation and amortization, increased 4% to $815 million compared to $784 million in fiscal '24.

During fiscal '25, we incurred higher expenses related to the 10 net new retail stores opened in fiscal 2025, including 4 new food and beverage locations, along with the 30 net new stores added during fiscal '24. Combined, these locations accounted for almost half of the SG&A increase during the year.

We also incurred higher costs related to software and professional service fees, credit losses primarily related to the Saks bankruptcy, partially offset by lower advertising costs. This yielded adjusted EBITDA of $107 million or 7.2% EBITDA margin compared to adjusted EBITDA of $193 million or 12.7% of net sales in the prior year.

Moving beyond EBITDA, adjusted depreciation and amortization was flat compared to fiscal '24. We incurred $4 million of higher interest expense, resulting from higher average debt levels, and we had a higher adjusted effective tax rate.

With all this, we ended with $2.11 of adjusted EPS, which includes $0.19 of charges related to the Saks bankruptcy. I'll now move on to our balance sheet, beginning with inventory.

At the end of fiscal '25, inventory decreased 1% on a LIFO basis, which was impacted by a large increase in our LIFO reserve. Inventory increased 2% on a FIFO basis.

The increase was driven by $11 million of incremental tariff costs capitalized into inventory, relating to tariffs implemented during fiscal '25. Inventory was up just slightly in all brands, except for Johnny Was, primarily due to the additional tariff costs.

On tariffs, also want to address some important points. During fiscal '25, we paid approximately $40 million of tariffs imposed under IEEPA that were struck down by the Supreme Court.

While those payments could potentially translate into a receivable, the timing and collectibility remain uncertain, and no potential recovery was included in our fiscal '25 results or is included in our fiscal '26 guidance. We ended the year with outstanding long-term debt of $116 million, up from $31 million at the end of the prior year.

Our $120 million of cash flows from operations in fiscal '25 were outpaced by our capital expenditures of $108 million, primarily related to the Lyons, Georgia distribution center project and the addition of new brick-and-mortar locations, $55 million of share repurchases, and $42 million of dividends. I'll now spend some time on our outlook for 2026.

For the full year, we expect net sales to be between $1.475 billion and $1.53 billion, or approximately flat to up 4%, compared to sales of $1.478 billion in 2025. The sales plan in 2026 includes growth in the Tommy Bahama, Lilly Pulitzer, and Emerging Brands segments, partially offset by a decrease at Johnny Was.

A total comp of approximately flat to positive 3%, with some additional lift from non-comp locations opened in 2025. By distribution channel, the sales plan consists of mid-single-digit increases in brick-and-mortar and retail channels, along with a low-double-digit increase in food and beverage locations, that includes the annualization of 4 new locations from 2025.

The wholesale channel is expected to contract in the mid-single-digit range, due primarily to continued declines in the specialty store market. More broadly, our guidance balances the modestly positive first-quarter-to-date comps with the uncertainty we continue to see in the consumer environment.

This includes the potential for additional pressure from the conflict involving Iran and the possibility that higher oil prices could weigh on consumer spending, freight, and raw material costs. Moving on to gross margin, let me first lay out the tariff assumptions embedded in our outlook.

We're assuming tariff rates for the full-year fiscal '26 will remain generally consistent with the incremental tariff rates put in place during fiscal '25. These rates are consistent with the rates reflected in our inventory balances at the beginning of fiscal '26 and what we expect for future receipts during the year.

We are not incorporating any benefit from the recent Supreme Court decision or any related subsequent actions on other tariff matters. We are also not assuming any refunds of tariffs previously paid.

Using these assumptions, we expect total IEEPA-related tariff headwinds of $50 million during fiscal '26, or an incremental $20 million or 150 basis points of gross margin impact, and a dollar per share impact, on top of the $30 million of tariff headwinds we absorbed in fiscal '25. Additional tariff costs are not expected to be evenly distributed throughout the year.

As we have discussed previously, we recognized very little incremental tariff costs in the first quarter of fiscal '25 due to the timing of when tariffs were enacted and our efforts to accelerate large portions of our inventory purchases. As a result, we expect an approximate $12 million or 300 basis points headwind to gross margin in the first quarter of 2026.

Beginning in the second quarter, we expect incremental tariff impact to moderate significantly as we anniversary periods of fiscal '25 that did include more substantial tariff impacts. After Q1, we expect year-over-year tariff headwinds of approximately $2 million to $4 million or 50 to 100 basis points per quarter.

Outside of tariffs, we expect a full-year benefit from price increases, a change in sales mix with a greater proportion of direct-to-consumer sales, and a slightly lower promotional cadence to result in a modest adjusted gross margin expansion to approximately 62%. The price increases implied in our guidance range from 4% to 8% and vary by brand.

These increases reflect a more elevated assortment as well as higher pricing on new product with relatively limited like-for-like increases on existing product. Moving beyond tariffs and gross margin, we expect SG&A, which now excludes depreciation and amortization, to grow in the low-single-digit range, primarily due to increased software-related costs, the annualization of incremental SG&A from the 10 new stores added during fiscal '25 and a handful of locations including a new Tommy Bahama Marlin Bar in fiscal '26, and increased incentive compensation, primarily due to lower payouts in recent years.

Also within EBITDA, we expect royalties and other income to increase by approximately $2 million in fiscal 2026. Additionally, our fiscal '26 guidance includes the unfavorable impact of increased losses of $5 million or $0.25 per share related to the opening of our new Lyons DC.

These losses reflect the ramp-up costs of opening and operating the facility before we have achieved targeted inventory levels and the cost of operating 2 facilities while we transition out of the old facility and into the new facility. We expect significantly all the incremental cost to operate the new Lyons DC in fiscal '26 will be depreciation-related, with some offsetting reductions in cash operating cost.

We also expect an increase in non-operating items, including anticipated higher interest expense of a million dollars for the year or an approximate $0.05 EPS impact from anticipated higher average debt levels. We also expect a higher adjusted effective tax rate of approximately 28% compared to 24% in 2025, will result in approximately $2 million of additional tax expense or $0.15 per share impact.

The increase in the effective tax rate is primarily due to expected shortfalls in stock-based compensation vesting during fiscal 2026. Considering all of these items, we expect 2026 adjusted EPS to be between $2.10 and $2.70 versus an adjusted EPS of $2.11 last year that included the $0.19 of charges related to the Saks Global bankruptcy.

Before moving on to the first quarter, I want to briefly discuss the completion of the new distribution center in Lyons. As Tom mentioned, we are still in the early ramp-up phase of bringing the facility online and want to be careful about attributing specific financial benefits before it's fully operational and handling the level of volume we expect over time.

Over the long term, we believe Lyons will be an important asset for Oxford. The facility is designed to improve the efficiency and flexibility of our distribution network, supported by a more modern layout and state-of-the-art automation.

In the near term, fiscal 2026 will include the additional depreciation costs mentioned earlier as we move through the early stages of ramp-up, following the startup activity incurred in 2025. Even at this early stage, Lyons is already providing several strategic benefits to the business.

These include being able to eliminate 2 higher-cost Los Angeles-based distribution facilities acquired with Johnny Was in fiscal 2024, reducing leased space across other parts of our distribution network, increasing flexibility as we continue to evolve our sourcing network, improving our ability over time to operate the business with lower inventory levels, and enhancing service to important Southeast and East Coast markets for Tommy Bahama, which have historically been serviced from our Auburn, Washington facility on the West Coast. Moving on to the first quarter of fiscal '26, we expect sales of $385 million to $395 million compared to sales of $393 million in the first quarter of 2025.

The sales plan in the first quarter includes a flat to modestly positive comp in the low-single-digit range. By channel, we expect low to mid-single-digit increases in our retail and e-comm direct-to-consumer channels, and mid to high-teen growth in our food and beverage channel, to be partially offset by a low-double-digit decrease in our wholesale channel.

We also expect the $12 million of higher cost of goods sold, or approximately 300 basis points of gross margin impact, or $0.60 per share, from higher tariff costs, as I mentioned previously, along with a higher mix of promotional and clearance sales, to be partially offset by a higher mix of direct-to-consumer sales. SG&A deleveraging, largely from the anniversaring of new stores opened in '25, some additional costs related to the new Lyons, Georgia facility, and increased incentive compensation, as previously mentioned.

Higher interest expense of approximately a million dollars and a higher effective tax rate of approximately 25% compared to 24% in the first quarter of '25. We expect this to result in first quarter adjusted EPS between $1.20 and $1.30 compared to $1.82 in the first quarter of 2025.

Excluding the additional $12 million or $0.60 per share in tariffs, adjusted EPS at the low end of our range is nearly flat with a year ago. Related primarily to the completion of the new Lyons DC and significant reduction in new store openings, we expect total capital expenditures of approximately $65 million in fiscal 2026 compared to $108 million in fiscal '25.

The $65 million includes approximately $20 million of final costs to complete the new Lyons facility early in fiscal '26, which were previously planned to be incurred in late '25. The remaining capital expenditures in '26 will relate to ongoing investments in the execution of our pipeline of new stores and Marlin Bars, including 1 Marlin Bar expected to open in '26, and capital expenditures related to relocations and renovations of current brick-and-mortar locations.

Across the company, we expect to open a handful of new locations at Tommy Bahama and Lilly Pulitzer, but expect to close some stores in other brands, which should result in a relatively flat store count for the year. Wrapping up our guidance, we expect cash flow from operations of approximately $130 million to allow us to pay down a significant portion of our debt while completing the previously mentioned investments and the payment of our quarterly dividend that was increased by 1% to $0.70 per share by the board in our latest March meeting.

Thank you for your time today. We now turn the call over for questions.

Shamali?

Hi, great. Thanks, and good afternoon.

Maybe just to start on Tommy Bahama, you've been very transparent around the assortment changes that you've been working to implement there. As you've started to see that improvement, with the mid-single-digit comps so far this quarter, could you just help us further unpack what's driving that momentum?

Are you seeing any encouraging signals across traffic, basket size, or conversion that give you confidence that the trends you're seeing now could be sustainable?

Thank you, Ashley. No, we're very excited about what we're seeing in Tommy Bahama because not only are we seeing the mid-single digit, and it really goes back to the back half of January, very end of last year and then through quarter to date of this year, and it's been pretty consistent.

It's not, the, even this week, it's been a good week. Yesterday was a great day for us on a Wednesday.

We're seeing the kind of consistent results that give us a lot of confidence. Then the next thing I would say, Ashley, is that it's very much about having the right product in the right depth in the stores is really, and of course online as well, but that's really what's driving it.

A couple of the best sellers on the men's side, which is the biggest part of our business, have been the Emfielder polo, which is, our bread-and-butter polo. It's made a couple of tweaks to it.

It's a new and improved Emfielder polo, but it's the Emfielder polo. Then you're familiar with our Boracay pant franchise that, has been with us for quite a while now.

It started with a chino way back when, then we added a short, then a 5-pocket, then a new chino this past fall, which has performed very, very well for us. Then for this spring, the new Boracay short.

We had a Boracay short before, but like the pant, this is a new and improved version of it, and that's really helping drive business a lot. Then on the women's side, dresses are performing well.

Wovens, shorts, and pants, I believe, are all performing well. We're also seeing, Ashley, that what we're talking about in our marketing materials, like a mailer we did last month, that's what's selling, too, and it's good to see that connection.

We look at all these things and we get pretty excited. Then the last thing I'll tell you is that the results that we've posted so far, this time of year, Florida is the most important part of our business, but Florida is still not as strong as we want it to be, and it's really the West that's driving the results.

The great thing about that, Ashley, is that as we get into second quarter, the West becomes proportionately more important to our business, the fact that we have a lot of momentum overall, but particularly out there, I think bodes well for our ability to sustain this momentum. Then again, it's, it's all about product and having the products that the customer wants to see us see from us.

For a variety of reasons last year, a lot of them having to do with the tariffs, but other reasons as well, we just we were not on that as much as as we needed to be, and we are this year, and it's working.

Great. That's super helpful.

Then maybe just one follow-up on the gross margin. Appreciate all the color you gave us there, but I think there was a call about some of the channel mix shift, so, as that takes place and it moves more towards the DTC and food and beverage, just how should we think about the margin implications and contribution to overall profitability in '26?

Yeah. Definitely on gross margins, with DTC growing, and wholesale we talked about pulling back a little bit, it certainly helps the gross margin.

We are performing well at the wholesale doors, especially the majors, we think we can get some momentum back at wholesale. They both, definitely on the gross margin line, they help.

Then when the DTC is coming through a comp, it really falls to the bottom line, if we can get comps meaningfully positive, it really does flow through.

Great, great. I'll pass it along.

Thank you again.

Thank you, Ashley.

Hi. Good afternoon, everyone.

As you think about the Saks and the loss of Saks, and you just mentioned about wholesale distribution, other places that you would look to? Is it any of the existing, like the Dillard's, Macy's, or Nordstrom?

How do you see the wholesale channel going forward? You just mentioned Florida performance, I believe, was weaker than the West Coast.

How much weaker is it than the West Coast, and any takes there? Just lastly, as you think about the frameworks for margins and the income statement and balance sheet this year, the lower CapEx this year, what does that mean?

How do you think of the opportunity for that cash, and how do you think about margins and SG&A spend as we go through the year? Thank you.

I will start with Florida, and just to be very clear, Florida is actually getting stronger. It's improving.

It's just that the West has really been kind of on fire, I don't want to leave anybody with the impression that Florida is where it's been for a while. It is actually picking up.

We've been glad to see it. February was extremely cold in Florida.

You may have been down there or have friends or family that was down there. February was a really cold month in Florida, and that didn't help.

I think we're seeing really good signs out of Florida. The point, though, is just that the West is on fire, and that bodes well for us, especially as we get into second quarter.

As Dana, for us, you have a good first quarter and second quarter, that's the makings of a really good year there, we're excited about that. Then in terms of Saks, look, we're rooting for them.

We want them to be successful. Obviously, it's going to be a smaller footprint.

We like doing business with them. We think it's a great venue, especially for our Johnny Was brand, which has historically had a nice business with both the Saks side and the Neiman side of the business.

We're rooting for that, but I think there is some business to be had out there as they move away from certain locations and certain markets. I believe that the winners will be the people that you said, Macy's, but more specifically, I think Bloomingdale's, as well as some of the top-tier doors at Macy's.

Then Dillard's and Nordstrom, I think, are also in a position to win. I think if you look out across that perspective, we have good relationships with all of those, and we like doing business with all of them, and we'll play to win as the market evolves.

Then on the CapEx and margin questions, I'll kick that over to Scott.

Lower CapEx, obviously the Lyons DC, we still have some that carried forward from last year, but quite a bit lower, and lower in stores. We raised our dividend modestly, and then we plan to pay debt down.

We think we can take a meaningful bite out of our debt level. That's the current plans with the cash.

Then your margin question was, can you repeat that one, Dana? I'm sorry.

Sure. As you think about the margins going through this year, any puts and takes on the levers on gross or SG&A, the quarterly cadence of what you'd be looking for, what could be a headwind or a tailwind?

I'd say for the year, depending on where in the sales guidance range we come, if we can be closer to the upper end of it, we should be able to leverage SG&A a little bit, which would be nice, and having a little bit growth in our gross margin percentage also. As there won't be too wild of swings year over year on the percentage, maybe a little bit more in Q2 than Q1.

Relatively flattish on gross margin percentage by quarter, no wild swings there. Then, just with some of the price increases, I think even though we have the tariff headwinds, we think we can overcome that in our gross margin, which I think is important.

Then obviously there's a lot of upside if we did bake in the IEEPA rates, and today the rates are lower, no telling what's going to happen. If they held where they are today, there's certainly some upside, and again, we did not build in any refund for what we paid last year, there's certainly some upsides out there depending on where the tariffs go.

Thank you.

Thank you, Dana.

Hey, you got Ethan on for Janine. Thanks for taking the questions.

First, just, I think you said you're looking to pay down a meaningful amount of debt this year. Was just wondering if you have a level you're looking to end the year at, and then where does it rank in your overall capital allocation plans for the year?

We hope to take it down, absent any refunds of tariffs, $30 million to $40 million reduction is what our current plan shows.

And... On the capital allocation, nothing's really changed there, Ethan.

As we believe paying a dividend is important, and have paid one every single quarter since we went public in 1960. Our dividend CAGR over the last 10 years is actually somewhere around 10%, and we increased it by a penny a quarter, the board did earlier this week.

Dividends, part of it, debt repayment, the CapEx will come way down this year, as Scott outlined in his comments, and I think the big sort of blob of CapEx that we had over the last 2 years is largely behind us, a little bit carried over into this year. That was really just a timing thing.

What we've seen going this year and going forward is that we'll be at much more normalized levels of CapEx, and so there should be plenty of cash flow and free cash flow.

Got it. That's super helpful.

Then just one more for me. Could you just give us a little more detail on exactly what the marketing and merchandising actions at Johnny Was will look like this year, as you look to reinvigorate the brand?

The marketing is really about more elevated, better storytelling, storytelling that emphasizes what's special and unique about the brand and prevents it presents it in an elevated way, and also one that hopefully reaches a bit of a broader audience than we had in the past. We have a very dedicated fan base at Johnny Was, but we think there are more people out there that we can appeal to, and that is some of that's already showing up.

Then from a product and merchandising standpoint, it's really about making sure that we have the right silhouettes, the right fabrications, very importantly, the right price points that were offering innovation and newness, all consistent with the Johnny Was DNA. Then investing appropriate levels of inventory.

This is a big project that we've had going, and it started really last summer, and we are starting to see the results of some of it already. We we have a weekly report that we look at every week that's got of course sales and margin, a couple other KPIs.

One of the great things about it is that we look at it, this year, pretty much every week we're seeing almost all green on that report, whereas for a couple years it was largely red, and now it's almost all green. We're also seeing the benefits of some of that merchandising work that we did show up.

For example, that work indicated that dresses in the $200 to $300 price bucket were very important. We invested more inventory dollars in that for spring, and it's paying off.

It's it's really it's working well. Those are the kinds of things that we're doing.

What I'll tell you, Ethan, though, is the full impact of the work really doesn't show up until the fall product hits the floor, which is, 7/30, July 30 is, when we when we ship fall. Then you'll see, I think, a more complete extent of the the work that that we've done there.

Another thing that's I I would be remiss if I didn't mention is the inclusion of some items that I think we're calling essentials or core essentials, but these are solid pieces. There's like a a top, a pant, a skirt, maybe 1 or 2 other things, and they come in, I believe, 3 solid colors that merchandise beautifully with all our, embroidered and printed product, but they they give a woman a way to come in and, if she wants to buy a printed top, but would prefer to have a solid pant or skirt to go with that, we've got it for her.

It's a way to, let her complete the outfit in our store, which will be a plus. Then it also, from a visual merchandising standpoint, it just helps break up the all the embroidery and print that we've got in the store.

Sort of in concert with that, we're also, I would say, calming down the interiors of a store, our store, a little bit to make them a little less overwhelming and easier to shop. A lot of this is well in flight.

A lot of it will take a little bit longer to fully come to fruition, but we're super excited about it. One of the things that we love, Ethan, is that one of our very important wholesale customers, when they came in to see fall, they absolutely loved it.

They bought into it. They loved what we were doing, and they actually upped their budget for their buy for us, which is a very a very strong indicator of of what they think about the line.

I think that's an early indicator. Obviously, ultimately, the consumer is the one that votes, but, retailers that are great merchants, their their opinions tend to be pretty good indicators of of where you're headed.

Absolutely. That's really great to hear, and I appreciate all the color.

I'll pass it on.

Thanks a lot, Ethan.

Great. Good morning.

Thanks for taking my question. I guess I'm just trying to understand from the guidance that you laid out for the year, I think it implies some acceleration, at least then if you look at the ranges, I think first being Q1 versus what you're projecting for the year.

Maybe could you just help us reconcile that? Also, could you give us more details on what you're seeing on Lilly Pulitzer?

I think you alluded to a soft start of the year, maybe because of weather. How are you thinking about that business improving as the year progresses?

Thank you.

Yeah. Mauricio, on the I think you referred to comps, accelerate a little bit in the guidance.

Part of it is February was extremely cold. February was not a great comp month, and it's really where Tommy Bahama has really overcome that, as Tom mentioned, with the West Coast business.

Lilly has started a bit behind on comp and behind their initial plan on comp, but they are such East Coast-centric, and East Coast is where weather patterns, they don't have the West Coast offset. With weather normalizing, we really believe we'll have a little bit better comp because of that.

We're seeing it more in March, especially at Tommy.

Then yeah, on the Lilly thing, in February, as Scott mentioned, it was not a great comp month. Florida is an enormous part of Lilly's business all year, but especially in the spring.

We did a really interesting look back where we looked at the weather patterns in Florida over the last, I don't know, 7 or 8 years, something like that. When it's cold in February, comps are weak.

By cold, I mean when the average temperature is colder than normal on a daily basis, the comps tend to be weak. When the weather is warmer than the normal on an average daily basis, the comps are good.

This year we just didn't have it. Lilly is so dependent on Florida, especially at that time of year, and the whole East Coast.

They do a lot in the Northeast, as you know from where you live. There was just so much snow up there that I think that had an impact on us.

Of all of our brands, Lilly is the warmest of a bunch of warm-weather brands, and I think we saw it not only in the financial results, but in terms of what was selling. The dress business, which, in colder weather, dresses are going to be less popular, was the weakest category.

The strongest categories were things like pants and jackets that go better with cooler weather. We look at the product, we don't think we have any issue there.

We think the weather will turn and is turning, and we expect things to pick up. We've obviously factored what we've seen to date into our forecast.

Got it. Very helpful.

A couple follow-ups, maybe on the margins. First, on gross margin, I think you alluded to first quarter still being impacted with some promotions, I think, or some higher proportion of sales happening during promotional events.

Then for the full year, I think it's the opposite, or less promotions, trying to reconcile that. Then specifically on Johnny Was, anything that you can tell us in terms of how are you thinking about the margin outlook of this business for the year?

Or maybe I guess is it more of a top line first recovery? How should we think about that, the inflection of that business, or how much inflection we should see in '26?

Thank you.

I think Johnny Was, it's going to be a little bit more of a gross margin story, which will get better after the first quarter. We still have some goods to clear, and still had to have some, a little more promotions.

The number of promotional days are expected to come way down. Our inventory levels are in really good shape, and part of the promotional cadence is Johnny Was will get less promotional as the year goes on, and as we buy better, buy more in the right categories, and buy appropriate levels, we think the amount of promotions we'll have to do is less.

For the year, we have Johnny Was gross margins maybe moving backwards slightly in Q1, but for the year they move forward. That's kind of explains part of the promotional comments that we had.

Understood. Thanks so much.

Thank you.

Thank you, Mauricio.

Thank you. It's Tracy Kogan filling in for Paul.

I have two questions. The first, I think you guys mentioned it was traffic and conversion that were the issues in 4Q, and I'm wondering which of the metrics has really changed and improved as you're talking about the improvement quarter to date.

Then I think in your prepared remarks, you mentioned optimizing Lilly's distribution and channel mix and changing their pricing architecture, and I was just hoping you could go into a little more detail on that. Thank you.

On the pricing architecture, it's really that same thing I was talking about in Johnny Was, where we've implemented a tool that helps us to do much more detailed analytics on what price points really work well. I'm sure you're familiar with GMROI, or gross margin return on investment.

Looking at the business on a very granular basis and understanding the best places to invest our inventory dollars. The example I gave in Johnny Was was dresses in the $200 to $300 price point bucket, where historically, according to the data, we were a bit underinvested.

We were overinvested in some other places, and it's really trying to adjust those imbalances, if you will, in the line. Then when you know where you need to be, you can design into it.

It's not like you have to raise prices or cut prices to get there. You just design your future line into the price architecture that the analytics indicate will work best.

Again, on the Johnny Was example, that finding came out, I guess, back in the summer, and we were able to action it, at least to some degree, and it's working. There are a lot of others, too, but that's the idea.

It's basically, Tracy, about having better tools and processes. We've got great merchants across the company and across the country.

We've got just superb merchants, but it's about putting better processes and tools in their hands and letting them do their job better.

Thank you. Then on the quarter to date traffic, conversion?

What I would tell you is that the big star of the show has really been the average order value, which is a combination of both the average unit price and the unit per transaction, which the trendlines on those are really good. Traffic has been okay.

Conversion has still been a little bit of a challenge, but the very strong positives, I would say, is the average order value growth. That's kind of the story.

Great. Thank you very much.

Thank you.

Okay. Thank you, Shamali, and thank you for your interest, everybody.

We look forward to talking to you again in June, and hope all is well until then. Thank you.