Overview
- Q2 was mixed, with EPS of $3.10 topping estimates as revenue slightly missed, while Americas comparable sales fell about 4% and store visits dropped 8.5% year over year, according to Placer.ai.
- Full-year outlook was lowered to $12.77–$12.97 in EPS and $10.85–$11.0 billion in revenue, with management flagging up to a 300 basis-point gross margin decline tied to roughly $240 million in gross-profit pressure from de minimis removal.
- The tariff impact is outsized because about two-thirds of orders had been fulfilled via Canada and previously entered the U.S. without duties.
- The company is rolling out modest price increases, negotiating with vendors, pursuing expense savings, and planning a product reset that lifts new styles from 23% to roughly 35% by next spring.
- Shares are trading near 52-week and five-year lows after multiple downgrades from major firms, though some analysts still cite a roughly 13–14x forward P/E and note international strength, including 17% same-store growth in China.