Top-Line Growth Exceeds Expectations
Organic net revenue grew 9% in Q1 (reported +14%), with broad-based strength across regions and channels.
Direct-to-Consumer (DTC) Momentum
Global DTC net revenues grew 10% with comparable sales up 7%, marking the company's 16th consecutive quarter of positive comps; DTC now represents about 50% of the business.
Wholesale Outperformance
Wholesale exceeded expectations, delivering 8% growth in the quarter, driven by increased buys from partners on women's and tops assortments.
Category and Product Strength
Women's grew 13% and men's grew 7%; tops were up 13% and bottoms up 7%. Notable product wins: 517s up 25%, expansion of baggy/loose fits and successful new innovations (e.g., Thermodapt).
International Strength
International net revenues grew 12% overall: Europe +10% (with Italy revenues nearly doubling since 2021) and Asia +12% (DTC in Asia up 16%); LatAm grew 14% within the Americas.
Margin and Profitability Progress
Adjusted EBIT margin was 12.5% in Q1 (would be 14.1% excluding A&P timing), showing strong flow-through (~40%); adjusted diluted EPS was $0.42, up 11% year-over-year.
Cash Flow and Shareholder Returns
Adjusted free cash flow was $152M in Q1; shareholder returns totaled $214M (up 163% YoY) and the company declared a $0.14 per share dividend (+8% YoY).
Loyalty and Digital Engagement
Loyalty membership reached 46 million (up 17% YoY) with ~2 million net adds in Q1; 70% of new U.S. e-commerce orders came from Gen Z and millennials; e-commerce grew 17%.
Raised Full-Year Guidance
Company raised FY26 guidance: reported revenue growth to 5.5%–6.5% and organic to 4.5%–5.5% (both +0.5 pt vs prior); adjusted EBIT margin now ~12%; adjusted diluted EPS raised to $1.42–$1.48.